Chinese companies are increasingly seeking partnerships in the United Arab Emirates (UAE) as the Gulf nation acts as a “superconnector”, bridging the East and West and amid a shift in trade beyond the traditional sectors, according to a top banker.
Business has expanded to innovative industries like hydrogen, ammonia, carbon capture, electric vehicles, solar energy and consumer tech because of China’s substantial investment in research and development, which is driving advances in these areas, Mohamed Al Marzooqi, CEO of HSBC UAE, said in an exclusive interview during Abu Dhabi Finance Week last week.
“Historically, the relationship with China was very limited, but what we are seeing today is a change from that trend,” he said, adding that Chinese companies are involved in many significant infrastructure projects in the UAE.
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Abu Dhabi Global Market (ADGM), the UAE capital’s international financial centre, signed an agreement to boost cooperation with the Beijing Financial Street Service Bureau during the UAE-China Investment Summit held as part of Abu Dhabi Finance Week. The bureau is responsible for the promotion and development of the Beijing Financial Street area as a national financial management centre.
Abu Dhabi Global Market signed a memorandum of understanding with Beijing Financial Street Service Bureau during the UAE-China Investment Summit held as part of Abu Dhabi Finance Week. Photo: Handout alt=Abu Dhabi Global Market signed a memorandum of understanding with Beijing Financial Street Service Bureau during the UAE-China Investment Summit held as part of Abu Dhabi Finance Week. Photo: Handout>
In the renewable space alone, Chinese companies are involved in almost 50 per cent of the projects currently in progress in the UAE, according to Al Marzooqi. Chinese solar photovoltaic manufacturers are doubling down on the UAE and the Middle East to cater to local demand and serve as gateways to US, European and other markets.
The UAE has invested US$50 billion in renewable projects in 70 countries over the last decade, with another US$50 billion earmarked for investments at home and abroad over the coming decade. It also aims to become a top global producer of hydrogen by 2031.
“Everyone considers the UAE as an amazing bridge between East and West, a superconnector,” Al Marzooqi said, noting that the UAE is China’s second-largest trading partner in the Middle East after Saudi Arabia.
Bilateral trade between China and the UAE reached US$95 billion in 2023, according to official data. In the first half of 2024, trade volumes crossed US$50 billion. A visit by Chinese Premier Li Qiang to the UAE in September could further pave the way for investment and cooperation in energy, health, education and other fields.
“Culturally, there are lots of similarities between the two nations and it goes even beyond the UAE to the wider Middle East,” he said. “So when it comes to the business environment, the trust element is [deeply] rooted. We can see transactions being executed in a very smooth way.”
The initial agreement signed last week between ADGM and Beijing Financial Street Service Bureau aims to build on the ties established between the two sides in September 2018.
“The collaboration leverages the unique strengths of both parties,” said Lu Wuxing, director general of Beijing Financial Street Service Bureau. “We aim to enhance industry exchanges and encourage cross-border business establishment.”
Abu Dhabi, which holds 90 per cent of the UAE’s oil reserves and most of the sovereign wealth, is seeking to diversify its economy, with the ADGM at the centre of the economic transformation as a financial centre and free zone.
“In terms of foreign direct investment [FDI], it’s not just about Chinese companies attracting Abu Dhabi’s FDI into China,” HSBC’s Al Marzooqi said. “We’re seeing tangible two-way investment flows.”
This is because of the strong relationship at the government level between the two sides, he added. “We’ve seen very strong messages from both countries, and they have been consistent in those messages.”
HSBC recently arranged two visits for the Abu Dhabi Investment Office (ADIO), responsible for supporting investment in the emirate, to Shanghai and Hong Kong to strengthen business development, investment and trade flows between Abu Dhabi and Asia.
“[We are] facilitating much bigger visits, and those visits will take place next year,” Al Marzooqi said. “There will be multiple visits during the course of 2025.”
The banker said HSBC would continue to invest in the UAE, which it sees as a priority market. The lender also plans to leverage its China team in the UAE. It has 20 mandarin speaking staff, one of the largest among local and international banks.
“So in both places, we’re putting a lot of attention on our existing people strength and leveraging our network to explore opportunities for our clients,” Al Marzooqi said.
He also said that the bank would like to see more Chinese companies execute public private partnerships in the UAE and wider region.
“I think this will be extremely advantageous for Chinese businesses, as it brings financial and operational benefits given long-term financing, along with shared investment risk and innovation, and knowledge transfer.”
