China – UAE (United Arab Emirates) Relations Under the Microscope

Established back in 1984, it should come as any surprise to those familiar with let’s call them geopolitical realities that China – UAE relations have developed in a straightforward and positive manner, with the two pillars of this evolution being represented by the fact that:

1. The trade dimension makes sense, with China for example being the world’s number one importer of oil. Yes, the United States still represents the top CONSUMER of oil worldwide but in light of the shale and gas boom the US is experiencing (generally speaking, of course, the 2020 realities of said business are represent a topic for another article) correlated with the fact that China only manages to produce approximately 1/3 of what it needs, China ends up being the top IMPORTER of oil after drawing the line
2. Trading partners in the Persian Gulf in our case are not exactly as sensitive to negative aspects related to China. For example, UN ambassadors of the United Arab Emirates as well as the UN ambassadors of 36 other countries have defended China’s (more than controversial) treatment of the Uyghur minority (Xinjiang) through a joint UNHRC letter. Needless to say, Western nations didn’t exactly stand in line to sign the letter in question

To put it differently, it can hardly be considered surprising that China ended up establishing mutually beneficial relations with a geopolitically “non-judgmental” as well as resource-rich trading partner. As such, the status quo of 2020 seems relatively easy to explain, with:

1. A 4-digit number of Chinese companies established in the United Arab Emirates
2. A very significant Chinese UAE diaspora, with roughly 200,000 individuals of Chinese ethnicity living in the United Arab Emirates
3. The UAE being, in nominal terms, China’s number two Persian Gulf trading partner
4. In terms of Chinese product exports, however, the UAE actually represent China’s number one Persian Gulf market
5. China being more than willing to make long-term infrastructure investments in the United Arab Emirates, through projects such as (you’ve guessed it) the Belt and Road Initiative, through which the two entities came to a $3.4 billion agreement so as to facilitate the transformation of the UAE into a major hub for Chinese products via the Port of Jebel Ali. Other examples abound, for example the 2010 MOU involving railway construction
6. Bilateral trade volumes evolving in an impressive and in some cases downright parabolic manner, for example the fact that in 2007, China experienced a YOY bilateral growth rate of approximately 41%

Again, “straightforward” is the operate term and in light of the fact that we are describing a relationship where one of the parties is from the world’s oftentimes #1 region in terms of volatility, this sounds quite… well, surprising. Those who understand let’s call it Chinese Realpolitik however will be anything but surprised because, simply put, it represents a textbook example of a relationship where financial incentives abound on both sides.

Is the same principle not valid when it comes to Sino-Western relations?

From a strictly financial standpoint, yes, it is.

In a previous article, we have covered Sino-Canadian relations and explained that despite massive financial incentives on both sides, the relationship between the two nations can be considered tricky due to reasons such as the Canadian public considering that human rights issues trump trade (70% of them, to be more precise, as per recent poll data). This would represent an example involving a more recent article we have written but make no mistake, the exact same principle is valid when it comes to China’s relationship with pretty much any Western country.

To be more blunt: even Realpolitik has its limits, with Western citizens for the most part not exactly seeing China in the best light. And given the fact that the Western citizens in question end up voting for politicians who then represent their interests and do their best to act in a manner consistent with what the public wants, it should be anything but shocking that not even China’s sheer financial might is enough to make Western leaders look the other way when it comes to abusive behavior coming from Beijing.

On the opposite end of the spectrum, other regimes which don’t place all that much weight on issues such as human rights-related ones sense this void and do their best to fill it, as is the case with the United Arab Emirates.

It remains to be seen what happens next.

As far as the United Arab Emirates are concerned, it is difficult to believe that game-changing trend reversals will occur anytime soon.

When it comes to Western nations… things can get tricky. Under perfect economic circumstances, a Western country has little in the way of incentives to warm up to China. However, when the economies of Western nations are on the pressure, as tends to be the case with let’s say the European Union’s PIIGS countries (Portugal, Italy, Ireland, Greece and Spain), even seemingly unlikely turns of events become possible, for example SYRIZA taking over in Greece and warming up to Russia as well as China. Fortunately for the West, the damage has been minimal and SYRIZA’s position is anything but stellar at this point in time but still, it proves that game-changers are not impossible.

Will another PIIGS nation eventually fold?

What about other “problem child” situations in the EU, for example over in Hungary and Poland?

While some analysts believe pro-Russia or pro-China rhetoric is mostly hot air with the intention of forcing the EU’s hand when it comes to key issues, others assign a reasonable probability to outcomes involving meaningful action. It is remarkably difficult to believe that a Western nation will be embracing lenient attitudes such as those exhibited by the United Arab Emirates anytime soon but on the other hand, “meaningful even if not game-changing” action is not out of the question, which is why it is crucial to have a firm grasp on China’s relationships with a wide range of trading partners.