OPENING OLD DOORS

Dubai 2016 | MARITIME | FOCUS: MARITIME SILK ROAD

Over 2,000 years ago, Eurasian civilization began opening new trade routes between the peoples of Europe, Asia, Middle East, and Africa. Now, in the 21st century, it is time to step up the game and re-navigate the trade routes of old.

In October 2013, Chinese President Xi Jinping proposed the One Belt, One Road initiative. The plan brings together the Silk Road Economic Belt and the 21st Century Maritime Silk Road. The initiative aims to drive economic growth in the countries along the route and expand business cooperation between Asia, Europe, and those in between. The ancient maritime Silk Road was the outcome of joint political and economic efforts between the ancestors of both the West and the East, and it connected what became the UAE and China for centuries. Over the 21st century, the bilateral relationship between these two countries has experienced rapid economic growth, and now the two are uniting once again.

Trade is an essential pillar of the UAE's economy, positioning the country as a major international export and re-export hub. According to the World Trade Organization Report 2015, the UAE ranks 16th globally in commodity exports and it is the most important market for merchandise imports in the MENA region. China and the UAE are very important trade partners; total bilateral trade between the two totaled $70 billion in 2015. On top of that, the UAE is Hong Kong's biggest trade partner of export, re-export, and import markets in the Middle East. Mutual non-oil trade, including that from free zones, went up to $15.9 billion in 2015 from $5.8 billion in just four years. In the 1Q2016, Hong Kong's total exports to the UAE reached $1.804 billion, signaling YoY growth of 23.2%. A total of 50.6% of the exported items were pearls and precious and semi-precious stones, reaching $912 million, 22% were telecoms equipment and parts totaling $398 million, and jewelry accounted for 4.7% of the total at $84 million. Likewise, Hong Kong's imports from the UAE experienced 10.1% growth YoY, reaching $1.06 billion in the same period. Pearls and precious and semi-precious stones accounted for 52.7% of the total, reaching $556 million, 27.5% was jewelry at $290 million, and 6.5% of the total was telecoms equipment and parts, reaching $69 million.

The 21st Century Maritime Silk Road provides a great opportunity for the UAE and China to further strengthen their strategic partnership across sectors. It will also bring substantial benefits to countries along the route, bringing prosperity to the entire East Asian region. The initiative will result in immense opportunities for infrastructure investment as shown already by DP World's initiatives. HE Sultan Ahmed Bin Sulayem, Chairman and CEO of DP World, told TBY, “We are already helping Kazakhstan develop the Khorgos special economic zone and inland container depot as well as the Port of Aktau on the Caspian Sea. These infrastructure projects will help develop the One Belt, One Road concept, linking China to European markets through Asia."
The UAE offers extraordinary access to 2.2 billion consumers in the Middle East region, and it is also seen as the perfect base for not only Chinese businesses, but also other countries to enter the European and African markets. Use of the Maritime Silk Road could efficiently improve the allocation of resources and the free flow of trade between countries. Moreover, if all the country's development strategies could be integrated into the project, an inter-connected, inclusive community of interest with political mutual trust could be created for the benefit of all. This connectivity will not only bring new dimensions of cooperation to the maritime industry, but also into other sectors. The 21st Century Maritime Silk Road is expected to drive economic growth both along and outside the route for many years to come. It will offer unparalleled opportunities to explore new markets, whether it is China, the ASEAN countries, or any other along the road. New regions and new sectors untapped by the Silk Road will help revitalise and integrate the global economy.