The United Arab Emirates (UAE) and China are negotiating, at the highest level, the integration of the UAE into the Chinese New Silk Road (NSR) initiative, also called the “One Belt, One Road” (OBOR) initiative (Sarah Townsend, “UAE and China “working to restore silk road trading route””, Arabian Business.com, 13 December 2015). This move corresponds to the convergence of the Chinese and Emirati grand strategies. This confluence is based on an already thriving relationship between China and the UAE, which represents one-fifth of the Sino-Arab trade for the Gulf countries, with China being the UAE’s second import partner after India (Muhammad Zulfikar Rakhmat, “The UAE and China’s thriving partnership”, Monthly Monitor Report, A Gulf States Analytics Report, June 2015).
Beyond these more “classical” relationships, the specificities of the Chinese NSR and of the novel grand strategy devised by the UAE create and deepen the existence of converging strategies for the two countries as we shall explore in this article.
We are going to focus on the reason why and the way the Chinese New Silk Road and the UAE grand strategy converge, as well as on the geopolitical meaning of this convergence. We shall also look at the way that confluence supports the emergence of a new kind a sustainable security for both countries.
The Sino-Emirati convergence of strategies
Since 1984, the political and commercial links between China and the UAE have not stopped growing. As Chinese banking, business and finance companies have invested in the UAE and opened offices there, Emirati companies have similarly invested in China and opened offices in Beijing, Shanghai, Hong Kong, among others (Rakhmat, ibid).
In order to deepen these ties and allow then to benefit further from the growth of the Chinese economy, the UAE and China have even signed a currency swap in 2013 for 35 billions Yuan, which allows for the use of the Chinese currency in petroleum transactions (April A. Herlevi, “China and the United Arab Emirates: Sustainable Silk Road Partnership? », The Jamestown Foundation, China Brief Volume, January 25, 2016). This is quite a change for the Persian Gulf, where the petrodollar has literally been invented (Georges Corm, Le Proche-Orient éclaté, 2012).
Meanwhile, the UAE is aware that its current model of development needs too much water and energy for being sustainable in the long run, while its oil reserves are limited and will disappear over the next forty years (“Sheikh Mohammed bin Zayed inspirational view of a post-oil UAE”, The National, February 10, 2015). In order to answer these challenges, the UAE thus designs a national grand strategy, based on the industrial and financial development of renewable energies and on nuclear and space politics, at a national and international level (Jean-Michel Valantin, “The UAE Grand strategy for the future- From Earth to Space”, The Red (Team) Analysis Society, July 4, 2016.
On the Chinese side, the New Silk Road, also known as “one belt, one road”, is a strategy aimed at insuring the constant flow of energy resources, commodities and products that are necessary to the current industrial and capitalist development of the 1,4 billion strong “Middle Kingdom” (Jean-Michel Valantin, “China and the New Silk Road – From oil wells to the moon … and beyond”, The Red (Team) Analysis Society, July 6 2015.
For example, the energy and water technology and capabilities developed by the UAE are of great interest for China, given the needs of China in these fields, which enhances the strategic convergence between the two countries, because the UAE development also benefits from the Chinese dynamics.
Since 2013, China is deploying the NSR initiative, which attracts the interest and commitment of numerous Asian, African and Middle Eastern countries.
As we detailed previously, the New Silk Road is a new expression of the Chinese philosophical and strategic thought (Valantin, “China and the New Silk Road: the Pakistani strategy”, The Red Team Analysis, May 18, 2015). It is grounded in an understanding of the spatial dimension of China, in the geographic sense, as well as in a comprehension of the different countries that are involved in the deployment of the NSR. Space is conceived as a support to spread Chinese influence and power to the “outside”, but also to allow the Middle Kingdom to “aspirate” what it needs from the “outside” to the “inside” (Quynh Delaunay, Naissance de la Chine moderne, L’Empire du Milieu dans la globalisation, 2014). This is why we qualify some spaces as being “useful” to the deployment of the OBOR, and why each “useful space” is related, and “useful”, to other “useful spaces”. A fundamental “geographic useful space” for China is the Persian Gulf and its member states. That is why the UAE is de facto of great interest for the New Silk Road Initiative.
Furthermore, as pointed out above, the UAE grand strategy is based upon the interaction between sustainability and security through the transition from oil and gas to the development of a renewable and nuclear energy industrial basis. This strategy is linked with the water scarcity issue in an arid country with a rapidly growing population and an urban infrastructure (Nick Carter, “Even as we generate more in the UAE, we must protect our water and power supplies”, The National, August 3, 2014). It also means that the UAE is becoming a main driver of the transformation of the very notion of the link between sustainability, security and geopolitics (Jean-Michel Valantin, « “The United Arab Emirates, The Rise of an industrial sustainable industrial empire?”, The Red (Team) Analysis Society, June 13 2016.
As a result, the current oil and gas resources of the UAE, its development of a powerful renewable energy industry, added to the UAE geographic location on the southern coast of the Persian Gulf turns the UAE into a strategic partner for the Chinese New Silk Road.
In effect, the Chinese strategy is aimed at creating a planetary-wide “attraction system” from the outside to China. It is necessary to channel in the mineral, energy, and food resources needed by China in order to keep developing itself, while ensuring the social cohesion of its 1.400 billion strong population (Loretta Napoleoni, Maonomics, 2011 and Dambisa Moyo, Winner take all, China’s race for resources and what it means for us, 2012). This energy Chinese need turns the oil and gas of the UAE into a powerful attractor in order to answer to their present needs and thus guarantees the access for the UAE to the Chinese market and thus supports its current development and its clean energy transition strategy.
The geopolitical meaning of the Emirati-New Silk Road convergence
From the Chinese “One Belt, One Road”’s point of view, the UAE is a major geopolitical asset, because of its location and its harbour capabilities. Indeed, the “One Belt, One Road” aims also at creating a network of national and regional spaces that are tied to the different maritime and land Chinese entry points (Jean-Michel Valantin, “Militarizing the Chinese New Silk Road Part (Part1)”, The Red (Team) Analysis Society, March 13, 2017). However, the interest is not one-sided, on the contrary. The two countries become tied together both by their common interest in supporting the development of China and by the relationships they can develop with each other (Deng Yaqing, “A shared path”, The Beijing Review, July 10, 2014).
This convergence of the UAE and the NSR is not a simple new political layer in the UAE-China relationships. In fact, it reorientates it in a significant way, because it turns the UAE into a new part of this Chinese international economic life support system. This means that this new “UAE segment” is going to interact not only with China, but also with other parts, i.e. with other “useful spaces” of this system (Jean-Michel Valantin, “Militarizing the Maritime New Silk Road (2)- in the Arabian Sea”, The Red (Team) Analysis Society, April 3, 2017).
Being located in the Persian Gulf, being an important oil and gas producer and exporter, and having important harbouring installations, the UAE becomes de facto a useful space of the maritime New Silk Road that links with the Pakistani harbour of Gwadar, bought by China on the Arabian Sea, (Valantin, “China and the New Silk Road: the Pakistani strategy”, The Red Team Analysis, May 18, 2015), as well as with the port of Djibouti where Chinese companies and military are building a naval base (Shannon Tiezzi, “China’s “Maritime Silk Road”: don’t forget Africa”, The Diplomat, January 29, 2015).
For the UAE, being a member of the NSR also means benefitting from the Chinese diplomatic capabilities when it comes to its relations with its powerful Iranian and Saudi close neighbours. In effect, it must be noted that Iran is integrated into the NSR, and is developing trade, energy and military relationships with China as well as with Pakistan. For China the very philosophy of the NSR is to help these countries to maintain constructive relationships for their mutual benefit, so that they are lastingly able to support China’s development (Jean-Michel Valantin, “Iran, China and the New Silk Road”, The Red (Team) Analysis, January 4, 2016 and (“Iran, China seal New Silk Road deal”, Press TV, 31 October, 2016).
Thus, a new geopolitics emerges, based on the China’s need as the foundation for an international partnerships between the UAE’s national interest and China’s national interest, which is currently defined by the immense needs driving Chinese growth. This partnership is highly political, because both governments are interlocking their future and their legitimacy through this strategic partnership.
Sustainability and security
Also of strategic importance, being a member of the NSR supports the UAE strategy of economic diversification and of development of a renewable energy industry, influential on an international scale. Economic diversification is of the utmost importance for the UAE, in order to prepare the country for its coming peak oil, while maintaining a thriving economy. The UAE political authorities being deeply aware of the coming end of their oil reserves during the coming decades, the cooperation with China supports both their current oil and gas industry, while supporting the preparation for their energetic transition, as well as their economic diversification (Dania Saadi, “Economic diversification and Expo 2020 to shield Dubai from oil price rout », The National, June 26, 2016).
The UAE works at becoming a clean energy giant, hosting for example the International Renewable energy Agency (IRENA), while China is unleashing an investment capability worth 360 billion dollars for clean energy projects in China and around the world (Fortune editors and Reuters, “Here’s How Much Money China Is Throwing at Renewable Energy“, Fortune, January 5, 2017. In other words, China and the UAE are both working together at redefining geopolitics in terms of energy transition, as a new pillar of national security.
Reciprocally, the Chinese energy demand is such that China has become the world leader on the renewable energy market (Marlow Hood, “China takes global lead in clean energy: report“, Phys.org, January 7, 2017).
The Chinese and Emirati common interest thus converges and creates a strategic relationship through actions aiming at securing the future development of both countries, as, for example, the creation in 2016 of the Joint Strategic Investment Fund. This fund is aimed at supporting the co-development of oil and gas exploration and exploitation. It will also support the construction of transport infrastructures along the New Silk Road and the development of clean energy (“Belt and Road initiative boosts green energy along New Silk Road », Xinhua, 2017-01-18).
This dynamic is especially supported and exemplified by Dubai, which plans to produce 25% of its energy output from renewable in 2025 and 75% in 2050. That is why, for example, the Dubai electricity and water agency (DEWA) develops close ties with leading Chinese companies in this field (“DEWA visits China to boost energy projects in the UAE and Dubai”, Government of Dubai, 1 May 2016).
The energy-water nexus issue and its technological challenges is especially important for a country that is a regional power and needs to guarantee its post-oil future in a region dominated by oil and, more and more, by the attraction created by the Chinese “power of need”. It is also important for China that seeks ways to guarantee its new phase of economic and social development in a world where cheap oil resources are finite. Thus, the integration of the UAE to the Chinese New Silk Road is nothing but the convergence of two development grand strategies in a world of limited resources (Dennis and Donnella Meadows, The Limits to growth – the 30 years update, 2004, Michael Klare, Rising powers, shrinking planet, 2008, and The Race for What’s left, the global scramble for the World’s last resources, 2012).
However, by integrating the New Silk Road, the UAE is also becoming involved into the adverse reactions the Chinese system of attraction is, too, starting to trigger.
We shall look at these reactions and their effects not only on China, but on the network of the New Silk Road in coming articles.
About the author: Jean-Michel Valantin (PhD Paris) leads the Environment and Geopolitics Department of The Red (Team) Analysis Society. He is specialised in strategic studies and defence sociology with a focus on environmental geostrategy.
Featured image: Abu Dhabi 2013 by Валерий Дед [CC BY 3.0 (http://creativecommons.org/licenses/by/3.0)], via Wikimedia Commons.