Trade deals, advanced technology and security will be at the top of the agenda as President Sheikh Mohamed visits South Korea and China this week.
The visit comes at a time when the UAE, the Arab world’s second-largest economy, strengthens economic relations with other nations to enhance technological progress, make strategic investments and diversify away from an oil-based economy.
Sheikh Mohamed is starting a two-day state visit to South Korea on Tuesday, followed by a state visit to China on Thursday.
“I think the primary purpose of Sheikh Mohamed's visit to South Korea and China is to enhance its access to their advanced technologies,” Shigeto Kondo, a senior researcher at the Jime Centre in Japan's Institute of Energy Economics, told The National.
“Various industries are developing in these two East Asian countries, including energy-related ones, and I believe, he is seeking technology transfers to his country.”
China
The UAE is China's largest trading partner in the Arab world, with trade and investment spanning many sectors, including crude oil, petrochemicals and artificial intelligence.
Chinese investments in the UAE increased by more than 16 per cent annually last year to $1.3 billion, Zhang Yiming, China’s ambassador to the UAE, said at an Abu Dhabi event last week.
The UAE boosted its investments in China by 120 per cent last year, accounting for “90 per cent of Arab countries' investments in China”, Mr Zhang said.
China is also strengthening its relations with the world as it faces increased pressure from the US concerning investment and the export of goods to the world's largest economy.
Earlier this month, US President Joe Biden unveiled steep tariffs on Chinese imports, including on electric vehicle batteries, to protect its industries.
Mr Kondo said the UAE may pursue a free-trade agreement with China as recent reports indicate that the negotiations for a China-GCC FTA have stalled.
The delay is due to concerns that an influx of Chinese goods could hinder Saudi Arabia's industrial growth, he said.
Last month, Abu Dhabi and Kyiv finalised the terms for a comprehensive economic partnership agreement (Cepa), which is hoped to grow the economy of Ukraine amid economic disruption from its two-year war with Russia.
The deal was the UAE's 15th Cepa which has been introduced, formally signed or successfully negotiated with nations spanning Africa, Asia, Europe and South America.
Eleven such agreements have been signed so far, with India, Turkey, Israel, Indonesia, Cambodia, Georgia, Mauritius, Kenya, the Republic of Congo, Colombia and Costa Rica.
“The UAE has continuously been showing its willingness to negotiate bilateral FTAs with other countries rather than within the framework of the Saudi-led GCC,” Mr Kondo said.
The value of non-oil trade between the UAE and China exceeded Dh264.2 billion ($72 billion) in 2022, growing by 18 per cent from Dh223.8 billion in 2021, according to official data.
“Energy remains at the heart of the UAE’s burgeoning relation with China, though in recent years it has extended beyond,” Nasser Saidi, Lebanon’s former economy minister, told The National.
The UAE could benefit from linking its financial markets to Shanghai and Hong Kong, greatly helping financial flows, Mr Saidi said.
Potential linkages could also include the adoption of yuan for trade and the extension of China's Cross-Border Interbank Payment System, which is considered an alternative to the SWIFT payment system, he added.
South Korea
The UAE is currently holding talks to conclude new deals with Serbia, Vietnam, the Philippines, New Zealand and Ecuador, while negotiations with South Korea are complete.
The trade deal with South Korea aims to reinforce east-to-west supply chains, enable two-way foreign direct investment flows and improve joint research and knowledge exchange across sectors such as energy, advanced manufacturing, technology, food security and health care, Wam reported last year.
The contract for the $20 billion Barakah nuclear plant was awarded by the Emirates Nuclear Energy Corporation (Enec) to a consortium led by the Korea Electric Power Corporation (KEPCO) in 2009. This plant, which started operating in April 2021, was built to meet the UAE's domestic electricity requirements.
Mr Kondo said there was a “strong possibility” of South Korean companies being awarded the contract for a second nuclear plant in the UAE.
The UAE plans to invite bids for four new reactors this year, Reuters reported last month, citing sources.
Enec told The National that it was exploring opportunities within the UAE and internationally to take advantage of the expected growth in nuclear energy projects worldwide.
“We look forward to working with the strongest players in the market, including our Korean colleagues, to drive the next phase in local and international nuclear energy development,” said Mohamed Al Hammadi, Enec's managing director and chief executive.
“This state visit is an opportunity to celebrate our collaborative success with our South Korean partners in this growing global sector.”
The Emirates is South Korea's second-largest Arab trade partner and its 14th biggest globally, accounting for 20 per cent of the East Asian country's trade with Arab countries, according to Wam
South Korea's investments in the UAE rose to $2.2 billion while the UAE's investments in Korea stood at $578 million by the end of 2022.
