Dubai’s megaprojects spell good news for entrepreneurs in the city. With Expo 2020 expected to inject AED122.6 billion into the economy by 2031, it’s obvious that companies set up in Dubai stand to greatly benefit from this dynamic global event.
Another major international collaboration is Dubai’s partnership with China for ‘One Belt One Road’ (OBOR), an ambitious infrastructural endeavour that aims to revive its historic Silk Road trade network. The $900 billion initiative involves building roads, railways and shipping lines between China and more than 60 countries in Asia, Middle East, North Africa and Europe. It is said that the project will give China access to a massive marketplace, connecting it with countries that are home to 60% of the world's population and produce 40% of the global GDP.
While OBOR has world-spanning proportions, it holds unique significance for businesses set up in the UAE. Not only would it give Chinese companies setting up in Dubai access to nearly 100 million people in the Gulf region, the UAE's location, at crossroads on the world map, bridges countries from the East to the West. Therefore, by default, the UAE is an indispensable party to China’s OBOR plans.
Companies in the Dubai mainland are likely to generate leads from this increased interest from China. The UAE has a long history of bilateral trade with China, which is currently its second largest trading partner, in addition to being, the second largest economy in the world. It makes strategic sense for the UAE to build on its existing fruitful trade relationship with China, and exploit the huge market of available opportunities. The UAE’s involvement in OBOR, therefore was more or less inevitable.
Impact on businesses set up in the UAE
So, how is this blossoming partnership with China affecting businesses set up in the UAE nowadays?
In April 2019, the UAE government announced the development of the Traders Market, a 60 million square foot international station that will be built at a prime spot opposite the site of Expo 2020. Through this project, Dubai is reaffirming itself as a vital pitstop on China’s new Silk Road. The station, which will be completed in time for the world expo, will see an investment of up to $2.4 billion from China, that will use it to store and ship products from Jebel Ali to the world. This promises an expected surge in tenders for construction, logistics and transportation companies set up in Dubai.
The Traders Market is just one of several projects announced in partnership with China. Bilateral trade between the UAE and China is set to swell, as the government is launching new trade and investment deals worth $3.4 billion under the One Belt One Road initiative.
Another major upcoming project is the “Vegetable Basket”. Supported by the China-Arab Investment Fund, this initiative will import, process, pack and export agricultural, marine and animal products through the OBOR’s channels. Food-product businesses set up in Dubai can exploit the potential of this $1 billion project.
More opportunities are also expected for energy, transportation and agriculture companies set up in Dubai, as numerous agreements and memoranda of understanding between Emirati and Chinese private businesses in the energy, transportation and agriculture sectors took place in July last year, during the Abu Dhabi Crown Prince, His Highness Sheikh Mohammed bin Zayed Al Nahyan’s visit to China. These agreements added to a previous roster of deals that were signed in 2018 during a visit to the UAE by President Xi Jinping.
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