UAE and China enjoy robust relations and bullish prospects

On the eve of the official visit of His Highness Sheikh Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces to China, WAM, the Emirates News Agency, has issued a report on the state of UAE-China trade and bilateral relations. The following is the report in full: The ties of friendship between the UAE and China are deep-rooted. The two countries have been maintaining trade relations since the 7th century, but the relations took their modern shape on 3rd of December 1971, a day after the UAE was officially created, when the late Sheikh Zayed bin Sultan Al Nahyan sent a cable to the then Chinese Premier, Zhou Enlai, informing him about that great step. Enlai replied with a cable of greetings that represented China's recognition of the nascent state.

Since then, relations between the UAE and China have evolved significantly, especially after official diplomatic ties began in November 1984. Under the wise leadership of President His Highness Sheikh Khalifa bin Zayed Al Nahyan, Vice President and Prime Minister and Ruler of Dubai, His Highness Sheikh Mohammed bin Rashid Al Maktoum, His Highness Sheikh Mohamed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces and Their Highnesses the Supreme Council Members and Rulers of the Emirates, relations between the UAE and China have witnessed further growth over the past few years with series of visits by leaders and officials of the two countries.

In December 1989, President Yang Shangkun made the first ever visit to the UAE by a Chinese head of state, while the late Sheikh Zayed bin Sultan Al Nahyan reciprocated by visiting China in 1990.

In January 2007, President Hu Jintao made a stop-over in Dubai and was received by Vice President and Prime Minister and Ruler of Dubai, His Highness Sheikh Mohammed bin Rashid Al Maktoum, and in January 2012, Wen Jiabao, Premier of the State Council of the People's Republic of China, made a state visit to the UAE and took part in the World Future Energy Summit. The visit also saw the signing of a strategic partnership agreement between the UAE and China.

In 2008, Sheikh Mohammed bin Rashid Al Maktoum led a high ranking UAE delegation on a visit to China, where he held talks with its officials and met with economic and business leaders in Beijing and Shanghai.

In 2009 and 2012, Sheikh Mohamed bin Zayed Al Nahyan made two visits to China under invitations by the then Chinese Vice President, Xi Jinping.

Last year, Chinese Foreign Minister, Wang Yi, paid an important visit to the UAE that re-defined the progressive relations between the two countries. He met with Sheikh Mohammed bin Rashid Al Maktoum and Foreign Minister, H.H. Sheikh Abdullah bin Zayed Al Nahyan.

Relations between the two countries are poised to grow further, thanks to their huge potentials and influential roles in regional and international arenas. The UAE is an emerging economy with a unique and strategic location. The country has grown tremendously during the past 44 years to gain the world's respect as role model for progress.

China, on the other hand, is the world's second largest economy and is tipped to go that one step higher in the coming years due to its high growth rates.

Combining such potentials will have a positive impact on the two countries' political and economic relations.

China opened its embassy in Abu Dhabi in 1985 and its General Consulate in Dubai in 1988, while the UAE embassy in Beijing was opened in March 1987 and its two consulates, in Hong Kong and Shanghai in April 2000 and July 2009 respectively. The country is preparing to open a third consulate in Guangzhou after agreeing the final details, and a Consul-General has already been appointed.

The UAE and China are linked by 36 agreements for cooperation, with plans to expand their strategic partnership through creation of a joint sovereign fund, which will be announced soon.

Cooperation between the two countries is overseen by a joint committee, tasked with expanding cooperation in financial, banking, industrial, agricultural, investment training and information fields. The UAE recently joined the Asian Infrastructure Investment Bank as a founding member. The Bank's regional headquarters is based in Abu Dhabi.

Other prominent domains of cooperation include space, oil storage in China, as well as agreements on oil and gas, nuclear energy, railways, infrastructure, currency exchange, aerospace technology and advanced technology.

The prospects for relations are extremely positive, with China's Gross Domestic Product (GDP) forecast to grow by 7.8 in the next decade, enabling it to be the world's largest economy.

China's GDP saw a marked growth of 6.9% between January and September 2015 to US$7.6 trillion.

Trade exchange between the UAE and China surged by 220% during the past five years from a meagre US$63 million in 1985 to $54.8 billion in 2015.

This huge jump is attributed to many factors, including the growth in the aviation sector, with the UAE's national carriers increasing their flights to China's key destinations like Beijing, Shanghai and Hong Kong, leading to an increase in the numbers of Chinese tourists visiting the UAE.

The UAE's Emirates Airlines is awaiting a decision by the government of China to lift restrictions on the number of flights by the super jumbo Airbus A380 to China. Currently, there are 133 weekly direct flights between the UAE and China, 79 of which are by Emirates Airlines, 51 by Etihad Airways and 3 by Air Arabia.

In May 2014, H.H. Sheikh Hamed bin Zayed Al Nahyan, Chief of the Abu Dhabi Crown Prince's Court and Managing Director of Abu Dhabi Investment Authority (ADIA), made a visit to China, which was followed, a month later, by a visit from Foreign Minister H.H. Sheikh Abdullah bin Zayed Al Nahyan in June to attend the 6th Sino-Arab ministerial forum.

Other visits by UAE officials included one by Dr. Sultan Al Jaber, Minister of State in May 2014, Hussain Al Hammadi, Minister of Education, and Reem Al Hashimy, Minister of State, in May 2015 and Abdullah Al Saleh, Under-Secretary of the Economy Ministry, in September 2015.

Likewise, senior Chinese officials have made numerous visits to the UAE, including the visit by Premier Wen Jiabao in 2012, as well as visits by economic, commercial, financial, security and foreign affairs officials, mayors and envoys.

According to Abdullah Al Saleh, trade between the UAE and China, its second largest trade partner, reached US$ 50 billion in 2014. The UAE is home to over 4,200 Chinese companies.

In May 2015, the Abu Dhabi Company for Onshore Petroleum Operations Ltd., ADCO, awarded an Engineering, Procurement and Construction (EPC) contract for the development of the Mender Field to China Petroleum Engineering and Construction Corporation, CPECC. Its value is US$ 334 million.

The contract was signed by Abdul Munim Saif Al Kindy, Chief Executive Officer, and Ahmed Al Hammadi, Senior Vice President (South East), for ADCO and by Hou Haojie, the President of CPECC, and Ji Chenglin, General Manager of CPECC, Abu Dhabi.

The contract covers the construction of gathering stations, pipelines and power transmission lines, as well as sewage systems.

With a production capacity of about 20,000 barrels per day, the Mender Field project is of strategic importance, since it will help boost ADCO's daily crude production from 1.6 mbpd barrels to 1.8 mbpd by 2017.

The Mender Field is part of ADCO's South-East Abu Dhabi Asset, which also includes the Asab, Sahil, Shah and Qusahwira fields.

In June, the National Drilling Company, NDC, signed contracts to own 14 new rigs, including 12 to be built in China, at a total value of about US$543 million (Dh2 billion). The contracts were signed by Abdullah Saeed Al-Suwaidi, Chief Executive Officer of the Abu Dhabi National Drilling Company and by the CEOs of the other companies. The 12 rigs will be supplied by CBTDC, the China Building Technology Development Centre, and that contract was signed by the company Vice-President.

In July 2015, Tian Jun, General Manager, Bank of China Abu Dhabi Branch, rang the market-opening bell to celebrate the listing of a two billion renminbi (CNY) (US$322 million) bond on Nasdaq Dubai.

The listing underlines the exchange's success in attracting securities from Chinese and other international issuers seeking a high-visibility listing in the Middle East. Bank of China will use the capital raised to support cross-border trade and infrastructure activities linking various regions of the globe under China's ‘One Belt, One Road' strategy.

In April, China Airlines relocated its regional base to Al Maktoum International at Dubai World Central (Dubai South). The carrier uses the UAE as an intermediate stopover on its cargo flights between Taiwan and Europe. It will operate flights from Taipei to Dubai and onwards to Amsterdam, Luxembourg and Frankfurt using its fleet of Boeing 747s.

The Central Bank of the United Arab Emirates and UnionPay International, UPI, the international business arm of the global payment network, China UnionPay, signed in March an agreement for linking with UAESWITCH, a service that connects ATMs across the country. The agreement launched the use of UnionPay cards at all ATMs connected to UAESWITCH.

In November 2015, UAE Minister of State, Dr. Sultan Al Jaber, visited China and met with high-ranking officials from the People's Republic of China in Beijing for bilateral discussions regarding opportunities to strengthen economic and trade ties between the UAE and China.

The bilateral discussions were aimed at reinforcing the growing strategic partnership established between the two countries, and at exploring further collaboration and investment opportunities across sectors of mutual interest, including energy, infrastructure and technology.

Dr. Al Jaber met with Zhang Yesui, Vice Minister of the Minister of Foreign Affairs of the People's Republic of China, as well as Ning Jizhe, Vice Chairmen of the National Development and Reform Commission (NDRC). The NDRC holds administrative and planning control over the Chinese economy, and formulates policies for economic and social development.

As part of these ongoing efforts, the UAE signed the Articles of Agreement (AoA) establishing the Asian Infrastructure Investment Bank, AIIB, in June, becoming a founding member of the international financial institution.

The AIIB was created to promote regional and international cooperation in infrastructure development across Asia with a focus on energy, power, transportation and telecommunications, among other focus areas. The establishment of AIIB will also play a crucial role in supporting President Xi Jinping's ambitious strategic initiative, "One Belt, One Road," a development strategy and framework that focuses on connectivity and cooperation among countries across Eurasia.

"The UAE and China share a deep-rooted relationship based on a shared vision, mutual respect, and common economic and political interests," said Dr. Al Jaber.

"We've seen this relationship develop even further this year, with the UAE becoming a founding member of the AIIB. We look forward to cultivating our relationship with China further, and capitalising on the opportunities to collaborate across sectors that are key to the sustainable development of both countries, such as energy, finance, manufacturing and technology."

During the visit, Dr. Al Jaber also met with Wang Yilin, Chairman of the China National Petroleum Corporation and Zhang Xuguang, President of the China Development Bank (CDB). CDB is primarily responsible for raising capital to fund large Chinese infrastructure projects, such as the Three Gorges Dam and Shanghai International Airport.

In August, the Meet China Forum 2015, backed by Abu Dhabi Tourism and Culture Authority (TCA Abu Dhabi), and organised by the Chinese NPI Media company in cooperation with Highway Tourism, was launched at a reception at Abu Dhabi's Emirates Palace.

The reception was attended by Huang Jiemin, Ambassador of the People's Republic of China to the UAE, and Sultan Hamad Al Mutawa Al Dhaheri, Acting Executive Director at Abu Dhabi TCA, a delegation of 70 Chinese tour operator representatives, and several senior tourism service providers in the Emirate, including hoteliers, in an effort to enhance tourism numbers from China.

In his opening statement, Al Dhaheri said, "In the first six months of this year, some 102,217 Chinese guests checked into Abu Dhabi's hotels and hotel apartments, which was a huge 72% jump on figures from January to June 2014. The Chinese guests delivered 148,842 guest nights, which was a leap of 41% year-on-year. The figures make China Abu Dhabi's third largest overseas source market."

He added, "We seek to attract more Chinese tourists to explore our emirate and encourage them to take advantage of the wide range of tourist activities that the emirate offers in hopes of providing them with a satisfactory visit, such as the Formula 1 Etihad Airways Abu Dhabi Grand Prix, which is held in November, Abu Dhabi Classics 2015, a classical music festival, and the ISAF Sailing World Cup."

In May, TCA Abu Dhabi staged a five-city roadshow to help capitalise on the rapid growth of inbound tourism from the People's Republic into the emirate. An eight-strong delegation, led by Abu Dhabi Tourism and Culture Authority and comprising hotels, travel agents, attractions and the country's national airline, Etihad Airways, visited Beijing, Shanghai, Chengdu, Guangzhou and Hong Kong.

China has now become the largest overseas market for Abu Dhabi for the first time, as the first quarter of this year saw 64,098 Chinese guest arrivals into Abu Dhabi – an increase of 99 percent over the corresponding period the previous year – and an 82 percent increase in guest nights at the emirate's hotels and hotel apartments, to 91,449.

The UAE and China's bilateral and regional coordination is seen as exemplary, in the light of the strategic cooperation agreement, signed in November 2012.

China has been advocating a peaceful solution to the UAE's three occupied islands, on the basis of the UN resolutions. It has stressed the need to settle the issue through peaceful means and on the basis of international law.

China also supports the UAE in its position and its call to the international community to rally counter-terrorism efforts and to adopt a comprehensive approach to address terrorism and its root causes. The two sides also back international efforts to minimise CO2 emissions. In 2014, China joined as a member of the Abu Dhabi-based International Renewable Energy Agency (IRENA). China also takes part in the annual sustainability week in Abu Dhabi. In 2013, China appointed an attaché for energy affairs in its embassy in Abu Dhabi.

Earlier this year, the UAE launched Cultural Week at the Beijing International Book Fair 2015 (BIBF), in which it took part as Guest of Honour.

With China being one of the leading economic powers in the world today, the Confucius Institute for Chinese language and Culture at Zayed University organised a celebration at the University's Dubai campus to mark the harvest festival in the Chinese calendar.

The UAE and China also share several identical points of view on many issues such as counter-terrorism, security and stability in the Gulf and the need for a peaceful solution to the Palestinian issue, based on the Arab peace plan's two-state solution.