China and the United Arab Emirates: Sustainable Silk Road Partnership?

China and the United Arab Emirates: Sustainable Silk Road Partnership?

Among Gulf Cooperation Council (GCC) countries, the United Arab Emirates (UAE) is emerging as an important player through its relationship with China. Despite Saudi Arabia and Egypt’s perceived dominance in the Middle East, the UAE’s increasing prominence as a regional trade and investment hub, along with its energy diversification strategy could prove more fruitful in the long-run for China’s foreign policy goals. The UAE is already playing a role in Chinese efforts to internationalize the renminbi, and green energy may provide a more balanced and sustainable partnership than Silk Road partners looking primarily for loans and infrastructure development. The December visit of a UAE delegation to China highlighted three prominent themes: currency cooperation, joint investment, and solar-based green energy. China and the UAE may be opposites in geographic and population size, but there are numerous avenues for cooperation between the growing Persian Gulf power and Asian economic giant. Future progress on the agreements reached in Beijing will provide a sign of whether China and the UAE are committed to energy diversification, joint investment, and currency cooperation. Given Beijing’s One Belt, One Road and Maritime Silk Road strategy, the UAE has the potential to be a key partner for China’s foreign economic policy. Despite its small size, the wealth, stability, and centrality of the UAE make it a strategic hub for Chinese engagement in the region.http://www.jamestown.org/single/?tx_ttnews[tt_news]=45019&no_cache=1#.VrgkuymGhRk