Chinese Premier Li Qiang concluded a visit to Saudi Arabia and the United Arab Emirates (UAE) with the focus on deepening ties and fostering collaboration across various sectors, including the crucial realm of new energy. This diplomatic mission highlights the growing importance of China’s engagement with Gulf states as both regions look to expand their economic horizons and navigate global energy transitions.
Premier Li Qiang’s discussions with UAE President Sheikh Mohamed bin Zayed Al Nahyan was a clear sign of the importance both nations place on their evolving relationship. During the meeting, both leaders emphasized their commitment to strengthening the comprehensive strategic partnership between China and the UAE, which has witnessed rapid growth in recent years.
Emerging industries
Li Qiang underscored the need for deeper cooperation in key emerging industries such as new energy, electric vehicles (EVs), high-end manufacturing, biomedicine, and the digital economy. Alongside these, he pointed to the continued importance of collaboration in traditional sectors like oil and gas, a cornerstone of both Gulf economies.
“We must look beyond today’s industries and work together to cultivate new growth points that will define the future economy,” Li remarked, highlighting the importance of forward-thinking economic strategies.
This visit follows closely on the heels of President Sheikh Mohamed’s state visit to China just three months earlier, during which he met with President Xi Jinping. That visit set the stage for enhanced cooperation in cutting-edge technologies, positioning China and the UAE as major partners in the region’s energy transition.
One of the key developments of Li Qiang’s visit was the strengthening of cooperation between China and the UAE, despite the UAE’s long-standing ties with the United States. In recent years, the relationship between China and the UAE has flourished, particularly in sectors like trade, technology, and defense—areas where partnerships have reached unprecedented levels. These developments have occurred against a backdrop of growing scrutiny from Washington, as China’s global influence, particularly in technology, becomes a sensitive issue.
According to the Chinese foreign ministry, trade between China and the UAE hit a record high of $50 billion in the first half of 2024 alone. This robust economic relationship is a testament to the growing interdependence of both nations, especially as the UAE seeks to diversify its economy away from oil dependence and position itself as a hub for innovation and technology in the Middle East.
Li Qiang’s trip began with a visit to Saudi Arabia, where he met with Crown Prince Mohammed bin Salman in Riyadh. The meeting focused on strengthening cooperation in traditional sectors like petrochemicals and infrastructure while expanding collaboration in new fields such as information technology, green energy, and the digital economy.
New energy cooperation
The focus on new energy is seen as pivotal for both China and Saudi Arabia. As the world’s largest oil exporter, Saudi Arabia is exploring ways to diversify its economy and become a leader in renewable energy. The kingdom’s Vision 2030 initiative, which aims to reduce its dependency on oil and develop public service sectors like health, education, and tourism, aligns well with China’s ambitions to lead in green technologies and sustainable energy solutions.
Wen Shaobiao, a Middle East specialist at Shanghai International Studies University, highlighted the central role that new energy cooperation plays in China’s strategy in the Gulf region. “Collaboration on new and green energy is critical for the sustainable development and energy transition of Middle Eastern economies,” Wen explained. “China’s leadership in this area offers significant opportunities for the Gulf nations, particularly as they seek to reduce their reliance on fossil fuels.”
The UAE, for example, has already established the world’s largest single-site solar power plant, which stands as a flagship project under China’s Belt and Road Initiative (BRI). This growing footprint in the Gulf’s renewable energy sector not only reflects China’s economic strategy but also underscores its role as a global leader in green energy.
Chinese companies, such as electric vehicle manufacturers BYD and Nio, have already begun making inroads into the UAE market. The expansion of China’s electric vehicle industry into the Middle East further solidifies its presence in the region’s evolving energy landscape.
While China enjoys a trade surplus with the UAE, growing Chinese investments in the Gulf are beginning to narrow the gap. In 2023, China’s investments in the UAE increased by over 16%, reaching $1.3 billion. Meanwhile, UAE investments in China grew by 120%, reflecting the deepening economic ties between the two countries.
Li Qiang’s trip wasn’t just about bilateral agreements with Saudi Arabia and the UAE; it was also part of a broader strategy to strengthen China’s influence in the Gulf Cooperation Council (GCC) and across the Middle East. The GCC, which comprises Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE, is a crucial economic and political bloc in the region.
During his meeting with GCC Secretary-General Jasem Mohamed Albudaiwi, Li Qiang reiterated China’s interest in finalizing a long-awaited free trade agreement (FTA) between China and the GCC. This deal, which has been under negotiation for years, could open up new economic opportunities for both China and the Gulf nations.
Wen Shaobiao emphasized the importance of this agreement, noting that it aligns with both China’s Belt and Road Initiative and the Gulf states’ efforts to diversify their economies beyond oil. “The free trade agreement would be a landmark achievement and could serve as a model for future collaborations between China and other Middle Eastern countries,” Wen said.
Li Qiang’s visit also included a UAE-China business forum in Abu Dhabi, where he urged both countries to seize the moment and boost the quality of their economic cooperation. “Businesses from both nations should capitalize on the opportunities created by high-quality Belt and Road projects,” Li remarked during his speech. He emphasized the importance of aligning the development strategies of both countries to enhance their integration into global industrial and supply chains.
For China, the Gulf region represents not only a critical source of energy but also a growing market for its technology and infrastructure projects. As the UAE and Saudi Arabia continue their economic transformations, China’s role as a partner in this journey will likely expand. In conclusion, Premier Li Qiang’s visit to Saudi Arabia and the UAE marks a new chapter in China’s relations with the Gulf.
With a focus on new energy, digital economies, and infrastructure, these partnerships are poised to drive economic growth and innovation in both regions. As China continues to cement its influence in the Middle East, these collaborations will likely serve as a blueprint for future global cooperation in the energy transition era.
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