TMTPOST--China remains Dubai's largest trading partner, said H.E. Mohammad Ali Rashed Lootah, President and CEO of the Dubai Chamber of Industry and Commerce, at the Dubai Business Forum China in Beijing on Thursday.

In 2023, the non-oil trade between China and Dubai reached $67.8 billion, representing an impressive 83.8% increase compared to 2013. Over the past decade, the cumulative non-oil bilateral trade between China and Dubai has amounted to approximately $490 billion.

According to the Dubai Foreign Direct Investment (FDI) Monitor, between 2015 and 2023, China’s total investment in Dubai reached about $5.4 billion. Last year, Dubai welcomed 1,070 Greenfield FDI projects, with a total value of $10.7 billion.

“Dubai has developed a supportive ecosystem for tech entrepreneurs and established itself as a leader in digital innovation and the digital economy. Chinese companies can access unparalleled investment and financing channels here and benefit from numerous startup accelerators and incubators,” Lootah noted.

Looking ahead, Dubai is targeting China's strengths in artificial intelligence (AI) and the digital economy, extending an "olive branch" to Chinese enterprises. Lootah emphasized that as the world's first AI laboratory location, Dubai is accelerating its progress to become the world's most intelligent city, ensuring it leads globally in utilizing innovative technologies like AI for the benefit of the world.

With the introduction of the D33 plan, AI's expansion is set to become a new engine for economic development between China and Dubai.

Dubai, the most populous city in the United Arab Emirates (UAE), stands as the economic and financial hub of the Middle East, positioned at the crossroads of Asia, Europe, and Africa along the southern coast of the Persian Gulf. This strategic location makes Dubai a crucial transit hub connecting East and West, earning it the nickname "the Singapore of the Middle East."

As noted by Dubai entrepreneurs, Dubai, and the UAE, in general, have become the "gateway" to the global trade system, drawing a steady influx of Chinese tourists and entrepreneurs due to its significant global trade position.

H.E. Hussain bin Ibrahim Al Hammadi, UAE Ambassador to China, disclosed during his speech that by 2023, the UAE has become China's largest trade partner in the non-oil sector in the Middle East and North Africa region. Bilateral trade between China and the UAE has reached $80.6 billion, with China becoming the UAE's largest trade partner in 2023. Since 1984, the non-oil trade volume between the two countries has increased nearly 800-fold.

Lootah reported that in the first half of 2024, Dubai International Airport saw a record passenger volume of 44.9 million, with over one million travelers from China—a year-on-year increase of 80%. Additionally, interest from the Chinese business community in Dubai remains high, with approximately 5,400 Chinese companies registered as active members of the Dubai Chamber by mid-2024, including 362 new Chinese firms joining in the first quarter of this year.

According to the latest data from the Dubai Statistics Center, Dubai's real GDP surpassed 115 billion dirhams in the first quarter of 2024, marking a 3.2% increase from the same period in 2023. Various sectors showed growth, including transportation, finance, and insurance at 5.6%, trade activities at 3%, information and communication at 3.9%, accommodation and food services at 3.8%, and real estate at 3.7%. For the entire year of 2023, Dubai's GDP reached 429 billion dirhams, a 3.3% increase from 2022.

Notably, Li Chaohui, a Tencent investment management partner who has rarely spoken publicly in recent years, also attended the forum. Li remarked that while Dubai is well-known among consumers, with many visiting, the city has become one of the most popular travel destinations, with around 88 round-trip flights between China and Dubai. For businesses, Dubai's government is accelerating digital transformation, with the market embracing digital innovation, ESG, and emerging technology industries, supported by substantial capital from the UAE. This presents a significant attraction for Chinese enterprises.

Li noted that China’s digital infrastructure has already taken root, and Tencent is establishing a regional center in Dubai. Tencent has been collaborating with Dubai's commercial partners for years, especially in the TMT (Technology, Media, and Telecommunications) sector, and Dubai aims to provide opportunities for Chinese entrepreneurs.

Discussing the challenges of expanding internationally, Li acknowledged that many Chinese companies are new to the overseas market, facing similar issues such as legal systems, language barriers, and attracting high-quality local talent. He emphasized the importance of understanding the local market and building local partnerships rather than simply copying domestic strategies.

Zhang Yang, the CEO of Shengshi Investment, commented that the trend of Chinese enterprises going global is unstoppable. He highlighted that a robust legal framework, favorable living conditions, and accelerated IPO processes make Dubai a crucial option for Chinese firms. Zhang noted that Dubai, along with Hong Kong and Singapore, is accelerating its competition in the technology sector, which benefits Chinese companies seeking to expand internationally.

Shengshi Investment, established in Beijing in 2010, has invested in or held stakes in over 7,000 projects, covering key industries like information technology, healthcare, advanced manufacturing, new energy, and new materials. Zhang expressed confidence that Dubai welcomes the most promising and well-planned Chinese companies for international expansion.

Justin Jiang, the vice president of J&T Express Middle East, disclosed that since entering the Dubai market, J&T’s business volume has grown by 25% annually. Additionally, J&T became the second-largest logistics provider in Saudi Arabia by order volume in February 2024, with a market growth rate of 50%.

Zhang emphasized that Chinese capital can aid international expansion in two ways: helping Chinese companies go abroad by addressing investment, overseas market entry, and order acquisition challenges, and assisting in attracting business partners and leveraging Dubai as a gateway to global opportunities. This can enhance company revenue and deepen trade relations between the two countries.

However, Wang Jian, a professor at the School of International Trade and Economics at the University of International Business and Economics, cautioned that the cultural environment, customs, and political factors in the Middle East are crucial considerations for Chinese companies planning to expand overseas.

With the entrepreneurial fervor sparked by OpenAI's ChatGPT, global attention on the next generation of generative AI has reached new heights, prompting governments to accelerate their AI strategic initiatives.

UAE Vice President, Prime Minister, and Ruler of Dubai, Sheikh Mohammed, views AI as “the next major revolution” with the goal of becoming one of the countries with the most advanced AI technology.

As the world’s first nation to establish an AI department, the UAE jointly purchased NVIDIA's high-performance H100 AI chips in 2023 to build its home-developed supercomputer "Shaheen-3" and the large-scale open-source language model "Falcon." The total cost, based on H100’s market price, was $240 million.

The arid, desert-dominated Middle East faces challenges in agriculture and water resources, impacting industrial and agricultural development. Many countries in the region are relatively underdeveloped, and some rely heavily on oil and gas. Thus, driving sustained and diversified economic development has been a key focus for Middle Eastern nations.

Advanced technologies like AI have the potential to significantly aid industrialization and accelerate green modernization. The Turkish National AI Strategy (2021-2025) emphasizes that “AI is not an optional subject; it will be a key carrier of our development goals.”

However, Middle Eastern countries face challenges in AI development due to the late start in technology advancements. Therefore, governments are actively formulating local AI development agendas, fostering digital technology advantages, and reducing external dependency to mitigate shocks and uncertainties.

UAE Minister of Artificial Intelligence Omar Sultan Al Olama said, “The Middle East should lead the AI revolution, not wait to become followers.”

In a paper on AI development in the Middle East, Associate Professor She Gangzheng and Ph.D. student Fang Yuxin from Tsinghua University's School of Social Sciences highlight that Middle Eastern countries are enhancing government guidance to achieve AI technology autonomy and catch up. They aim to transition from being mere consumers of digital technology to innovators and exporters, playing a key role in global AI agendas.

China's AI large model industry is accelerating, becoming a critical second pole in global generative AI technology and a key target for Middle Eastern capital.

In early June, Tsinghua-affiliated AI company Zhipu AI secured $400 million in funding from Prosperity7, a venture fund of Saudi Aramco, marking its third financing round of the year. Zhipu AI had previously completed eight funding rounds with investors including Qiming Venture Partners, Junlian Capital, Meituan, TAL Education Group, Xiaomi, Sequoia Capital, Tencent, Alibaba, Hillhouse Capital, and Shunwei Capital. Zhipu AI's valuation has reached $3 billion.

Moreover, in the latest funding round for Elon Musk's xAI, Dubai-based investment firm Vy Capital and Saudi Kingdom Holding participated. UAE International Holding Company also engaged in discussions regarding Sam Altman’s $70 billion chip business plan.

Additionally, as the only Chinese AI company with autonomous driving operations established in the UAE, Shanghai-based Xijing Technology President Zhang Rong noted that while AI technology companies and innovative Chinese firms face both opportunities and challenges abroad, Dubai’s support for related industries in finance and tourism is notable. Xijing Technology has launched an all-weather autonomous electric heavy-duty truck, Q-Truck, at Dubai’s Jebel Ali Port.

According to a 2018 PwC report on AI development in the Middle East, it is projected that by 2030, AI will contribute $320 billion to the GDP of the GCC region. The UAE anticipates its GDP will benefit by an estimated $2.6 billion.

As Middle Eastern countries rapidly advance in AI technology, it remains to be seen how this will further integrate into global markets and the opportunities this creates for international companies.