Chinese companies are increasingly seeking partnerships in the United Arab Emirates (UAE) as the Gulf state acts as a “super-connector”, bridging the East and West, and amid a shift in trade beyond the traditional, according to a top banker. sectors.
Operations have expanded into innovative industries such as hydrogen, ammonia, carbon capture, electric vehicles, solar energy and consumer technology due to significant Chinese investment in research and development, which is driving progress in these areas, says Mohamed Al Marzooqi, CEO of HSBC UAE. in an exclusive interview during Abu Dhabi Finance Week last week.
“Historically, the relationship with China has been very limited, but what we are seeing today is a change from that trend,” he said, adding that Chinese companies are involved in many key infrastructure projects in the UAE.
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Abu Dhabi Global Market (ADGM), the international financial center of the UAE capital, has signed an agreement to strengthen cooperation with the Beijing Financial Street Service Bureau during the UAE-China Investment Summit held as part of the Abu Dhabi Dhabi Finance Week. The agency is responsible for the promotion and development of the Beijing Financial Street area as a national financial management center.
Abu Dhabi Global Market signed a Memorandum of Understanding with the Beijing Financial Street Service Bureau during the UAE-China Investment Summit, held as part of Abu Dhabi Finance Week. Photo: Handout alt=Abu Dhabi Global Market signed a memorandum of understanding with the Beijing Financial Street Service Bureau during the UAE-China Investment Summit, held as part of Abu Dhabi Finance Week. Photo: Handout>
In the field of renewable energy alone, Chinese companies are involved in almost 50 percent of the projects currently underway in the UAE, according to Al Marzooqi. Chinese solar photovoltaic manufacturers are doubling down on operations in the UAE and the Middle East to meet local demand and serve as a gateway to U.S., European and other markets.
The UAE has invested $50 billion in sustainable projects in 70 countries over the past decade, with a further $50 billion earmarked for investments at home and abroad over the next decade. It also wants to be one of the largest producers of hydrogen in the world by 2031.
“Everyone considers the UAE as an amazing bridge between East and West, a super-connector,” Al Marzooqi said, noting that the UAE is China’s largest trading partner in the Middle East after Saudi Arabia.
Bilateral trade between China and the UAE reached $95 billion in 2023, according to official data. In the first half of 2024, trading volumes exceeded $50 billion. A visit by Chinese Premier Li Qiang to the UAE in September could further pave the way for investment and cooperation in energy, healthcare, education and other areas.
“Culturally, there are many similarities between the two nations and these extend even beyond the UAE and even to the wider Middle East,” he said. “So when it comes to the business environment, the element of trust is [deeply] rooted. We see transactions being executed in a very smooth manner.”
The initial agreement signed last week between ADGM and the Beijing Financial Street Service Bureau aims to build on ties established between the two parties in September 2018.
“The cooperation takes advantage of the unique strengths of both parties,” said Lu Wuxing, director general of the Beijing Financial Street Service Bureau. “We aim to improve exchanges within the sector and encourage the establishment of cross-border businesses.”
Abu Dhabi, which holds 90 percent of the UAE’s oil reserves and most of its sovereign wealth, is seeking to diversify its economy, with the ADGM as a financial center and free zone at the center of economic transformation.
‘In terms of foreign direct investment [FDI]It is not just about Chinese companies attracting foreign direct investment from Abu Dhabi to China,” said Al Marzooqi of HSBC. “We see tangible investment flows in two directions.”
This is due to the strong government-level relationship between the two parties, he added. “We have seen very strong messages from both countries, and they have been consistent in those messages.”
HSBC recently organized two visits for the Abu Dhabi Investment Office (ADIO), responsible for supporting investments in the emirate, to Shanghai and Hong Kong to strengthen business development, investment and trade flows between Abu Dhabi and Asia.
“[We are] facilitating much larger visits, and those visits will take place next year,” Al Marzooqi said. “Several visits will take place over the course of 2025.”
The banker said HSBC would continue to invest in the UAE, which it considers a priority market. The lender also plans to deploy its Chinese team in the UAE. It has 20 Mandarin-speaking employees, one of the largest among local and international banks.
“So in both places we pay close attention to the strength of our existing people and leverage our network to explore opportunities for our clients,” Al Marzooqi said.
He also said the bank would like to see more Chinese companies implement public-private partnerships in the UAE and the wider region.
“I think this will be extremely beneficial for Chinese companies as it brings financial and operational benefits given the long-term financing, together with shared investment risk and innovation, and knowledge transfer.”
