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China deepens ties with UAE with industrial investment

Deals worth billions of dollars between China and the United Arab Emirates reflect China's major status as a partner in the Middle East.
Chinese President Xi Jinping signs a book during the presence of the Prime Minister and Vice President of the United Arab Emirates and Ruler of Dubai Sheikh Mohammed bin Rashed al-Maktoum  and Abu Dhabi's Crown Prince Sheikh Mohammed bin Zayed al-Nahyan at the Presidential Palace in Abu Dhabi, United Arab Emirates July 20, 2018. WAM/Handout via REUTERS.  ATTENTION EDITORS - THIS IMAGE WAS PROVIDED BY A THIRD PARTY. - RC1FC6481370

East Hope Group, one of China’s largest companies, announced last May that it is considering a $10 billion investment in Khalifa Industrial Zone Abu Dhabi (KIZAD). This comes on the heels of several major Chinese investments in KIZAD over the last two years and underscores the deepening ties between China and the United Arab Emirates (UAE). Emirate leaders have been looking in China’s direction as they diversify their relations with global powers, while from the Chinese side, its Middle East presence is growing through its ambitious Belt and Road Initiative (BRI). The UAE increasingly looks like the load-bearing pillar of China’s Middle East policy, and the expansion of China’s role in KIZAD indicates that Abu Dhabi is considered a pivot city in the BRI.

The proposed East Hope investment would be implemented in three stages over 15 years. It would begin with an alumina facility, then a red-mud research center and recycling project would follow. The final phase would be large upstream and downstream facilities to process non-ferrous metals. Both East Hope and Emirates Global Aluminum (EGA) are among the world’s largest aluminum producers. Abu Dhabi’s sovereign wealth fund Mubadala, which jointly owns EGA, has partnered with Chinese institutions in a joint investment fund with the aim of capitalizing projects in the UAE and China that support the BRI and Abu Dhabi 2030, the emirate’s development plan. East Hope’s chief executive officer Liu Yongxin explicitly linked the project with Beijing’s BRI ambitions, stating it “will become the benchmarking project along the BRI between China and the UAE.”

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