Dubai to support Chinese businesses' international expansion as FDI inflows hit $5.4bn

Number of Chinese companies operating in the emirate rose 6% to 5,400 in the first half of 2024

Mohammad Lootah, president and chief executive of Dubai Chambers. Victor Besa / The National

Dubai has pledged to support the expansion of Chinese businesses by positioning itself as a springboard for international markets, as foreign direct investments between both countries continue to grow.

Cumulative FDI from China to Dubai between 2015 and 2023 hit Dh19.85 billion ($5.4 billion), Dubai Chambers said on Thursday, as part of the first Dubai Business Forum – China in Beijing.

Investments from Dubai-based UAE companies into the Chinese market, on the other hand, reached nearly Dh5.2 billion over the same period, Mohammad Lootah, president and chief executive of Dubai Chambers, told state news agency Wam.

A year-by-year breakdown for both figures were unavailable.

The number of Chinese companies registered under the Dubai Chamber of Commerce also grew to about 5,400 in the first half of the year, up nearly 6 per cent from the estimated 5,100 recorded in the first quarter, it said.

The figures were unveiled at the forum, in which, opportunities under the Dubai Economic Agenda were highlighted to about 800 Chinese business leaders and investors.

The agenda, known as D33, aims to double the size of Dubai's economy to Dh32 trillion over the next decade and establish the emirate among the top three global cities.

“We are committed to supporting the growth of Chinese companies seeking to launch in Dubai and expand into regional and global markets," Mr Lootah said at the event.

In particular, Dubai Chambers signed a preliminary agreement with the China Council for the Promotion of International Trade Beijing, which aims to foster collaboration between Dubai and China businesses and help the latter expand investments in the emirate.

The agreement will also include the organisation of trade events and the hosting of delegations between the two markets.

"Close partnerships and constructive co-operation between the public and private sectors create an exceptional investment environment for the global business community," Mr Lootah said.

Bilateral relations between the UAE and China have been increasing with new trade and investment agreements between the two, as the Arab world's second-largest economy continued to grow with diversification efforts.

The two nations established diplomatic relations in 1984 and signed the bilateral investment treaty in 1993, according to the UN Conference on Trade and Development.

In 2023, the UAE's non-oil trade with China grew 4.2 per cent annually to reach Dh296 billion, with China remaining the UAE's top non-oil trade partner, accounting for 12 per cent of the nation’s trade, according to state news agency Wam.

Non-oil trade between Dubai and China also surged during the period to $67.8 billion, up 4 per cent compared to the previous year, the latest data from Dubai Chambers shows.

Chinese investments in the UAE as a whole increased by more than 16 per cent annually in 2023 to $1.3 billion, accounting for 60 per cent of the Asian nation's total investment in Arab countries, Zhang Yiming, China’s ambassador to the UAE, said in Abu Dhabi in May.

Mr Lootah told The National earlier this month that Dubai aims to attract more Chinese investment to the emirate.

The UAE and China also signed a preliminary agreement in July to increase air connectivity between the two nations.

Initiatives such as this week's forum are expected to expand the economic relationship between the UAE and China, said George Khoury, global head of education and research at Dubai-based CFI Financial Group.

"Building connections between businesses from either country is a strong vector for future growth and co-operation. UAE businesses could thus gain a significant advantage in their commercial endeavours and could extend market share and initiate new activities in China," he told The National.

"Any deals could help cement the UAE status as a global economic powerhouse."

Dubai Chambers also highlighted at the forum opportunities in key sectors, including trade, logistics, artificial intelligence, renewable energy, health care and e-commerce.

Opportunities in e-commerce, in particular, were discussed, as the sector continues to grow with evolving consumer shopping preferences. China is home to Shein and Temu, two of the most popular and budget-friendly e-commerce sites worldwide.