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Stability and global connectivity fuel Chinese investment in the UAE

Stability and global connectivity fuel Chinese investment in the UAE
8 May 2024 08:08

KHALED AL KHAWALDEH (ABU DHABI)

The UAE’s position as a global hub, its political and economic stability, and its business-friendly environment with attractive tax policies were cited by experts and investors as the main reasons for the country’s dominance in attracting Chinese investment in the region.

The topic was discussed extensively at the recent Chinese Investment Forum held at the Annual Investment Meeting (AIM) in Abu Dhabi.

According to PwC data presented at the event, the UAE was China’s largest trading partner in the region, receiving the highest level of investment inflows. Notably, 80% of Chinese investors choose the UAE as their regional headquarters.

Speaking to Aletihad on the sidelines of the event, PwC China Partner Rebecca Wong attributed this phenomenon to several factors. Most importantly, Abu Dhabi and Dubai are seen as gateways to global markets.

“Chinese investors seek a friendly business environment and efficiency, of course,” Wong said. “While the UAE’s zero tax rate was initially attractive, I believe they also value access to good international markets. Some of our clients at the event are interested in retail, but they choose the UAE because it caters not only to local customers but also to an international audience. The UAE’s status as a global trading and transportation hub makes it an attractive location to capture market share.”

The data, collected in 2022/23, was presented to a crowd of eager investors and will be included in an upcoming PwC report on China-Arab investment to be released in the coming months.

“The UAE offers a more attractive lifestyle compared to other countries in the region,” Wong added. “The open-minded and diverse culture is familiar to many Chinese people. We have clients here in Abu Dhabi who frequently travel to Saudi Arabia and Egypt for business.”

The forum, held over several hours on Monday, attracted one of the largest crowds at the AIM congress. Underscoring the importance of Chinese investment, UAE Minister of State for Foreign Trade, H.E. Dr. Thani bin Ahmed Al Zeyoudi, opened the forum and called for increased cooperation, particularly in logistics, green energy, and industry.

The trend is unsurprising to Dr. Shasha Tan, whose family has operated outside of the UAE since 1999 and recently relocated to Abu Dhabi full-time to pursue business opportunities.

“Economic growth and political stability are the most crucial factors for us,” Dr. Tan told Aletihad. “The UAE offers investor protection and strong markets.”

Dr. Tan observes a growing sophistication in investment strategies, reflecting the evolving strategic relationship between the two nations.

“Previously, investments often focused on hospitality and retail due to their simplicity,” she explained. “Now, there’s significant interest in areas like battery technology, sustainable businesses, and even digital assets.”

Wong agrees, noting the maturing relationship. UAE firms are increasingly interested in importing Chinese technology for renewable energy and healthcare, while Chinese companies seek access to capital and new markets.

“Middle Eastern investors are often actively involved,” Wong said. “They expect Chinese companies to contribute technology and talent while setting up locally and generating new business opportunities. The strong purchasing power and openness to new ideas displayed by UAE consumers make this market highly attractive to Chinese companies.”

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