ANALYSIS: Why Dubai remains perfect hub for China’s One Belt, One Road strategy
Dubai’s position as an international trade and investment hub between Asia, Europe and Africa is a perfect fit for the One Belt, One Road (OBOR) strategy of Chinese companies aiming to expand their global business across Central Asia, the Middle East and Africa.
According to Diego Gilardoni, international strategic advisor and author of “Decoding China”, Dubai has multiple strategic advantages that could potentially make it one of the linchpins of the new Silk Road, the most ambitious geo-economic and geo-strategic project in modern history.
OBOR is aimed at developing China’s western region and linking the Silk Route Economic Belt to the 21st-century Maritime Silk Route.
“Today Jebel Ali port is already among the world’s largest ports and its integration as a key point of the Maritime Route would make it even more important and provide China with unique infrastructures with global trade access,” Gilardoni told Al Arabiya English.
According to him, the city certainly has all the right cards to play to become an indispensable global trade hub. “Dubai is also one of the few places in a very volatile region known for its stability; and for China’s strategy to be successful economic and political stability is an essential ingredient,” says Gilardoni.
An upswing on the Dubai-China trade partnerships has been evident in recent years. The Dubai Multi Commodities Centre (DMCC), a free zone, recently said it is looking to China for future growth, after signing up a record amount of new companies last year.
The free zone signed more than 20 MoUs last year, focusing in particular on Chinese organizations including the Shanghai Gold Exchange, the China Silver Group and Mega Capital & Yunnan State Farms Province. An MoU was also signed in October with Shanghai Gold Exchange, the largest of its kind worldwide.
There are more and more synergies developing in other sectors too, especially energy. China National Petroleum Corporation (CNPC), the largest integrated energy company in China, signed an agreement to establish its regional headquarters in Dubai in order to serve its customers in the Middle East. CNPC is a state-owned Chinese company headquartered in Beijing and is the parent company of PetroChina.
An indispensable partner
Author Gilardoni says that the UAE’s strategy of economic diversification will make it interesting as an investing destination for Chinese companies.
“If on the short-medium term, China’s thirst for oil will make the UAE an indispensable partner, on the long term, the UAE’s stated goal on energy diversification through investments in clean energies and technologies will match with China’s own ambitious strategy of “going green”.
According to Gilardoni, the potential of strategic investments and partnership in this domain are huge, as proven already by the creation of a joint Chinese-UAE sovereign wealth fund.
“I also believe that, if Dubai manages to put together the right and sustainable development strategy, it could become not just a strategic point along the New Silk Road, but a global cosmopolitan city and a bridge between the West and the East”.
It is obvious that World Expo in 2020 is an opportunity to promote the city as a global business and tourism hub.
Moreover, Dubai is already a very appealing investment destination for Chinese companies and investors. In the words of Gilardoni, “the potential to become even more important thanks to the OBOR project, cannot be overstated”.