Across the Silk Road

Chinese Relations

Throughout the 21st century, China's ties with the UAE, and Dubai in particular, have strengthened in various fields. Since Beijing and the UAE established a diplomatic partnership in 1984, both have become major economic partners, and the bilateral relationship is well poised to flourish in the future.

THE STRONG bond between China and Dubai is evident from the fact that China continues to be Dubai’s biggest non-oil trade partner. It is a feat that the world’s second-largest economy has achieved since 2014. According to the UAE state news agency WAM, China’s trade with Dubai in 2017 reached AED176 billion, accounting for a whopping 13.6% of Dubai’s total non-oil foreign trade. China is followed by India with a bilateral trade value of AED99 billion, and the US with AED85 billion.

China-Dubai relations have soared over the past few years because of easing regulations and friendly policies. The latest such policy was China exempting ordinary passport holders from obtaining pre-entry visas, with the possibility of staying for up to 30 days on a single visit, starting from January 16, 2018. According to Li Lingbing, Chinese Consul-General in Dubai, nearly 1 million Chinese tourists visited Dubai in 2017. With less restrictive visa policies, this number is only set to rise.
Similar policies have facilitated the ease of conducting business; more than 3,000 Chinese enterprises are members of Dubai Chamber of Commerce and Industry. Due to the promising potential on offer, multiple Chinese banks have established their presence in Dubai over the last decade. Commercial Bank of China, China’s largest lender, established an office in the Dubai International Financing Center (DIFC) in 2008. Since then, an increasing number of Chinese companies have started to use DIFC as a bridge to access markets across the wider region. Moreover, China’s largest petroleum firm Petro China has set foothold in Dubai.
Frequency of flights between two points is another tool to measure bilateral relations. Currently, there are more than 20 direct flights between Dubai and China on any given day. While Chinese nationals constitute just around 4% of passengers at Dubai International Airport, they account for more than 12% of sales at Dubai Duty Free outlets. In order to boost those numbers further, retailers are hiring Mandarin-speaking employees. In addition, a growing number of stores and hotels are employing Cantonese and Mandarin-speaking staff; some businesses are even accepting Chinese renminbi as a form of payment.
In terms of infrastructure, Beijing’s firms have won more than USD4.8 billion worth of long-term construction projects between 2011 and 2013. On the other hand, Dubai’s DP World has invested in numerous Chinese ports and facilities, especially in Hong Kong, Yantai, and Tianjin.
Dubai’s automobile sector, which has historically been dominated by European, American, and Japanese brands, is also witnessing an influx of Chinese companies, for example, Foton, Cherry, and GAC Motors. Chinese manufacturers are eyeing Dubai’s growing demand for affordable cars. Based on estimates, Chinese car sales are set to increase each year with market share predicted to reach double-digits by 2020.
Among sectors that hold key in China-Dubai relations, culture and education rank high because they help in breaking down linguistic and cultural barriers, leading to even deeper relations. The first Chinese international school opened in Dubai in 2017. Another such example is Dubai’s Dragon Mart Mall, the world’s largest Chinese trading hub outside China. Around 120,000 people visit the mall’s 5,000 shops, of which more than 1,700 are managed by Chinese retailers. In 2018, Dubai was home to one of the largest Chinese New Year parades; 30 parading groups composed of 1,000 of Dubai’s 270,000 Chinese expats showcased traditional Chinese costumes, art, acrobatics, and others.
On May 8, 2018, China confirmed its participation in Dubai Expo 2020 and offered over USD100 million in projected investment. The move signals further growth in China-Dubai ties in the years leading up to Expo 2020 as Dubai strengthens its position as a global hub for trade, investment, and travel.