Posts   |   The UAE-China-Africa Triangle and Washington: Opinion

December 18, 2015
The UAE-China-Africa Triangle and Washington: Opinion

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By Afshin Molavi

The visit of Abu Dhabi Crown Prince and Deputy Supreme Commander of the Armed Forces Sheikh Mohammed bin Zayed Al-Nahyan to China made headlines around the world, most notably owing to the announcement of a $10 billion strategic co-investment fund by the two sides. Buried in the headlines, however, was an extraordinary statement made by Chinese President Xi Jingping proclaiming that China “was ready to hold discussions with the UAE on exploring third-party cooperation in Africa,” as China Daily reported (also buried in their own story).

As readers of this site know, the UAE has emerged as a major player in the African continent, with investments in telecommunications, ports, and energy, as well as Emirates Airline links to 25 destinations across Africa in direct flights from its Dubai hub. As I noted in my report on UAE-Africa ties published by the Johns Hopkins SAIS Foreign Policy Institute, the rapidly growing Chinese trader and business community in Dubai are using the city as a platform for trade with Africa. About one-third of seats on Emirates flights to sub-Saharan African cities are filled by Chinese nationals.

Clearly, Dubai has emerged as a major Africa hub. But the fact that Chinese President Xi Jingping would specifically point to the UAE as a partner in a continent that Beijing has invested hundreds of billions of dollars, not to mention the full diplomatic weight of the state, is a clear reflection of the high estimation that Beijing holds the UAE. I cannot think of a single Middle East country that Xi Jingping would say something similar about.

The $10 billion co-investment deal was signed by Abu Dhabi investment firm Mubadala with China Development Bank Capital and China’s State Administration of Foreign Exchange. The deal adds a strategic element to what has already been a rapidly growing trade relationship. Indeed, the UAE-China trade relationship is one of the fastest growing in the world – and to my mind – one of the top three most consequential South-South relationships to watch over the next decade (the other two are India-China, and Saudi Arabia-China).

The UAE-China relationship has – as noted in these pages – developed from a traditional hydrocarbons-for-manufactured goods one to a diverse, wide-ranging relationship where Dubai has emerged as a major China hub for business in the Middle East and sub-Saharan Africa. From less than 20 Chinese businesses in 2005, there are now some 3,000 Chinese businesses in Dubai today, and more than 200,000 Chinese residents. In a sense, Dubai has become Hong Kong-West – a major trade hub for Chinese exporters.

Abu Dhabi’s relationship with China, however, has centered mostly on oil exports, and that’s why this visit is so critical. Now, Abu Dhabi and the full weight of the UAE has entered the relationship with a bang. This will mean a more active engagement on the part of Abu Dhabi Inc’s network of companies ranging from Mubadala to Masdar, and it may even mean more active engagement from the $800 billion-plus Abu Dhabi Investment Authority (ADIA). Given the importance of Mohammed bin Zayed Al-Nahyan to the UAE, this South-South relationship just got a rocket boost.

Abu Dhabi – not Dubai – crafts the UAE’s foreign and strategic policies. So, a closer relationship with China will have geopolitical ramifications across the Middle East. (But I digress: that is the subject of another post).

Policy-makers in Washington should take note. Beijing sees the UAE as a partner in Africa, not just an address or a destination to speak about Middle East issues. The reason Beijing sees this is because their foreign policy-makers are not far from commercial realities on the ground, and they see the UAE role in Africa. Ask a US policy-maker about the UAE role in Africa and you are likely to get a quizzical stare (Believe me, I’ve done it).

I’ve long felt that the UAE gets ghetto-ized by the Washington policy community by placing it solely in Middle East discussions when, in reality, it’s more of a global player with a reach and impact in sub-Saharan Africa and across South Asia. That reach just expanded substantively with the Sheikh Mohammed bin Zayed visit to China.