Inescapable logic to Dubai-China commercial ties

Inescapable logic to Dubai-China commercial ties

Sheikh Mohammed bin Rashid Al-Maktoum and China’s President Xi Jinping at the Presidential Palace in Abu Dhabi. (Reuters)

In a world teeming with paradigm-shifting innovations, it is easy to forget the breakthroughs of the recent past that have so transformed our lives, yet have become almost invisible to us. Consider the humble shipping container, which has changed the way we produce, consume, connect and live, and has fueled the rocket force of globalization that shapes all of our lives.

In 1956, the transport entrepreneur Malcolm McLean launched the first shipping container voyage from Newark, New Jersey, to Houston, Texas. At the time, few could have foreseen the revolution this technology would bring: The explosion in world trade and the rise and fall of industries, cities and firms as a result. Globalization as we know it today would not have been possible without the shipping container. Today, roughly 70 percent of the world’s trade of nearly $20 trillion travels by container ship. 

In that same year, in 1956, the emirate of Dubai commissioned a British engineering firm to dredge the Creek to allow for greater trade throughput. Dubai’s then-ruler, Sheikh Rashid bin Saeed Al-Maktoum, saw an opportunity for his emirate that few others did: It could become a regional trade hub through investing in infrastructure. The Creek dredging was the first step in a transformative program of massive infrastructure building in Dubai that has made the city what it is today — a global trade, tourism and transport hub, with the busiest international airport in the world, one of the busiest container shipping ports in the world, and one of the most-visited cities in the world.

When McLean launched the shipping container or when Sheikh Rashid dredged the Creek, neither likely knew what was coming. But they both understood the importance of being on the cutting edge of change, lest the change that comes, well, cuts you. After all, who could have foreseen the rise of the Asian tigers of Singapore, South Korea, Taiwan and Hong Kong in the 1960s, 70s and 80s? Or the rise of China, surely one of the most consequential, rapid and transformative geoeconomic stories of our era? Who could have foreseen the rise of cyber connectivity and the smartphone in virtually every pocket — a device that has the same computing capacity that the US space agency NASA had to send a man to the moon in the late 1960s?

As these countries rose and as the internet flattened our world, it became clear that we would need new trade hubs. Singapore and Hong Kong stepped up in the late 20th century and, thanks to its rise over the past decade, Dubai now stands in the same league as those two giant Asian hubs. 

When Sheikh Rashid decided to build the Jebel Ali Port in the late 1970s, many of his own close advisers scoffed at the idea.

Afshin Molavi

This brief history helps explain the headline-grabbing $3.4 billion deal signed between Chinese government entities and DP World, the Dubai-based global ports operator, to set up two massive trading centers in the Jebel Ali Free Zone. The first will include 5.5 million square meters of logistics space to store Chinese goods for export to the world. The second project, known as the “Vegetable Basket,” will create a food manufacturing and processing plant to import, process, package and export a range of agricultural and animal products.

UAE Vice-President and Prime Minister and Ruler of Dubai, Sheikh Mohammed bin Rashid Al-Maktoum, declared that “the deal will position Dubai well in China’s planned Belt and Road as Dubai will be a major supply link to the initiative.” This is indeed true, but it was Dubai’s original positioning dating back to Sheikh Rashid’s dredging of the Creek in 1956, as well as the current ruler’s own massive investments in the infrastructure of connectivity, that made Dubai a natural Belt and Road Initiative hub.

When Sheikh Rashid decided to build the Jebel Ali Port in the late 1970s, many of his own close advisers scoffed at the idea. After all, Dubai had just launched a new port, Mina Rashid. So why build a new one? It turned out to be a smart move, and today the Jebel Ali container port is the ninth-largest in the world and the free zone is host to more than 6,500 companies.

But it is not only Dubai and ports. China has been actively investing in the UAE for more than a decade, and will likely continue for another decade. There is an inescapable logic to their commercial ties, and the China-UAE economic corridor is likely to become one of the most robust links on the emerging “new Silk Road.”

  • Afshin Molavi is a senior fellow at the Foreign Policy Institute of the Johns Hopkins University School of Advanced International Studies and is the editor and founder of the New Silk Road Monitor. Twitter: @afshinmolavi
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