Chinese economic influence in the UAE growing, says JLL
China’s influence in the UAE is growing as the contractors from the Far Eastern country become increasingly active in local construction projects and the number of Chinese visitors continues to increase, according to consultants JLL.
According to JLL, the UAE plays a crucial role in China’s proposed “new Silk Roads”, including a maritime route from China through South Asia to Africa and Europe and an overland route through Central Asia to Iran, the Middle East and Europe.
“This is part of the ‘one belt, one road [initiative] with the purpose of expanding its economic influence across Central Asia, the Middle East, Africa and also Europe,” JLL senior vice president Marko Vucinic said on Wednesday.
“The main goal is to invest in infrastructure [along these routes]. Dubai is a key city in this strategy, and gateway to stable markets, especially in Africa.
“China sees the UAE as one of [its] major trading partners,” he added, noting that currently about 60 percent of Chinese exports to regional markets are channeled through the UAE.
Vucinic pointed to a number of significant Chinese investments in the UAE – such as in Abu Dhabi Industrial Park and Dubai Food Park – as signs of growing Chinese economic involvement in the country.
“One of the most visible ways that China is having an impact on the UAE is through the large presence of Chinese contractors in the country,” Vucinic added. “China is also providing construction financing, which is impacting the overall market.”
Notably, a Chinese company, the China State Construction and Engineering Corporation, is the second most significant contractor in the UAE by value ($2.94 billion) with 16 projects under execution.
Additionally, Vucinic said China has become the fourth most significant source market for visitors coming to Dubai, behind only India, Saudi Arabia and the UK.
“There was a 49 percent increase, year-on-year, in the third quarter of 2017 [in Dubai]” he said. “We’re seeing a similar trend in other emirates. In Abu Dhabi, China is among the top two source markets, and we this spreading across the Middle East as a whole.”
Andre Langston, JLL Hotels and Hospitality executive VP, said that Chinese brands are increasingly present in the UAE, and Chinese malls – such as DragonMart – are increasingly looking to expand their presence in the UAE and elsewhere in the region, a trend he believes will pick up pace in the next few years.
“The Chinese will build and finance the shopping mall, and you’ll see a lot of [Chinese] brands coming into the market,” he said. “China will have a major impact on the retail industry [in the UAE].”