China, UAE work together to build the Belt and Road

China Plus Published: 2018-07-19 21:46:31
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By Tian Wenlin

Note: The following is an edited translation of a commentary from the Chinese-language "Commentaries on International Affairs (国际锐评)."

On Thursday, China's President Xi Jinping started a state visit to the United Arab Emirates. This is his first overseas visit after he was re-elected president earlier this year. It is also the first time that China's head of state has visited the UAE in the past 30 years.

Abu Dhabi National Oil Company Headquarter lights up red to welcome the upcoming state visit of Chinese President Xi Jinping. [Photo: China Plus]

Abu Dhabi National Oil Company Headquarter lights up red to welcome the state visit of Chinese President Xi Jinping. [Photo: China Plus]

Despite its relatively small size, the UAE is strategically placed, as it is close to the Persian Gulf. It has well-developed land and sea transportation routes. Dubai has a world-famous airport and commodity distribution center. The country has proven reserves of oil and natural gas that rank it sixth and fifth respectively in terms of global reserves. Last year, the UAE's per capita GDP exceeded 40,000 U.S. dollars. And according to the country's development plan, by the time of the arrival of the 50th anniversary of the country's founding in 2021, it will be one of the world's most well-developed countries.

In 2012, the UAE became the first Gulf Arab country to establish a strategic partnership with China. The two sides have worked to strengthen cooperation in various fields, and a number of cooperation projects have come to the fore thanks to the rapid advancement of China's Belt and Road Initiative. In 2017, the UAE awarded 12 percent of the franchise rights of the Abu Dhabi onshore oil block to Chinese companies – the first time that China gained a share from upstream cooperation in the Middle East. And in March of this year, the UAE granted a 10 percent franchise for each of the two oil fields in the Abu Dhabi offshore oil block to Chinese companies. Cooperation in the oil and gas sector has become a flagship of the deepening of cooperation between China and the Middle East.

That said, collaboration between China and the Arab state has also progressed significantly in the fields of infrastructure, telecommunications, finance, and culture. After President Xi Jinping first proposed the Belt and Road Initiative in 2013, the UAE's Crown Prince Mohammed bin Zayed Al-Nahyan praised the initiative. President Xi's visit to the United Arab Emirates will inevitably bring the two countries into closer cooperation across various fields.

From a broader perspective, the UAE can be at the center of China's growing cooperation with the Middle East. The Middle East is at the midpoint of the Belt and Road Initiative, which makes it a natural and important area for cooperation. As it stands, China is the largest trading partner for nine of the Arab countries. And the Arab countries are China's largest supplier of crude oil, its seventh largest trading partner, and an important port of call for engineering contracting and overseas investment.

From 1978 to 2011, the volume of goods traded between China and the Middle East increased by an average of 19.7 percent each year, significantly exceeding the average rate of growth of China's trade with other countries over the same period.

Cooperation in the energy market has been the most important touch point for both sides. Currently, 70 percent of China's imported energy comes from six member countries of the Gulf Cooperation Council. The huge market and consumption power of the Middle East has also provided a valuable opportunity in terms of China's development: Between 2000 and 2012, China's exports of goods to the Gulf region increased by an average of 23 percent a year.

President Xi Jinping addresses the 8th ministerial meeting of the China-Arab States Cooperation Forum in Beijing on July 10, 2018. [Photo: Xinhua]

President Xi Jinping addresses the 8th ministerial meeting of the China-Arab States Cooperation Forum in Beijing on July 10, 2018. [Photo: Xinhua]

In 2014 at the sixth ministerial meeting of the China-Arab States Cooperation Forum, President Xi Jinping proposed the "1+2+3" China-Arab cooperation agreement. The new agreement had energy cooperation at its core. The "two wings" of the agreement were infrastructure construction, and the facilitation of trade and investment. And it included three high-tech breakthrough areas: nuclear energy, space satellites, and new energy. And the participants at the recent ministerial meeting of the eighth China-Arab States Cooperation Forum signed important agreements that provide a clear, systematic, and complete blueprint for the development of China-Arab relations into the future.

For countries in the Middle East, the Belt and Road Initiative is a historic development opportunity that should not be missed. In the past, the economic prosperity and national strength of the Arab and Ottoman empires were largely due to their role as an intermediary on the Silk Road, connecting the East and the West through trade. The Arab states have regarded the Belt and Road Initiative as an opportunity to drive the rejuvenation of their countries and of their region. Both China and the Arab states have repeatedly expressed their recognition that their development goals are complementary, and that there are broad opportunities to develop the initiative together.

(Tian Wenlin is an associate research fellow at the China Institutes of Contemporary International Relations.)

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