Abu Dhabi Courts Chinese Investors in Bid to Rival Dubai’s Economic Rise

Abu Dhabi is making significant strides to enhance its position as a key business hub in the Middle East, particularly with a focus on strengthening ties with China. This initiative comes as the city seeks to compete with Dubai, which has historically been the region’s primary center for trade and business. Abu Dhabi is now rolling out an ambitious campaign to attract Chinese investment and companies, with recent events such as a major signing ceremony between China Southern Glass Group Co. Ltd. and the Khalifa Economic Free Zone (KEZAD), marking the construction of a heat-resistant glass production line to serve the Middle East’s construction boom[para. 1][para. 2].

The effort aligns with a remarkable increase in Chinese engagement: in 2024, the number of Chinese members in the Abu Dhabi Chamber of Commerce grew by 70%, reflecting a surge in interest from Chinese companies on the mainland[para. 3]. Abu Dhabi’s diversification away from oil is guided by its 2022 industrial strategy, which set aside 10 billion dirhams (about $2.7 billion) over ten years. The strategy’s targets include doubling manufacturing output by 2031 to 172 billion dirhams, creating 13,600 jobs, and boosting non-oil exports by 143% to $178.8 billion, with China considered a central partner in this vision[para. 4].

Chinese electric vehicles (EVs) are gaining visibility in Abu Dhabi, with an increasing number owned by local government officials and households, indicating a changing landscape in consumer and official preferences[para. 5]. The city is prioritizing the development of three main industrial clusters: smart mobility and autonomous vehicles, agri-food and water security, and life sciences and healthcare, with further expansions planned[para. 6].

Abu Dhabi’s commitment to strategic sectors is demonstrated by its sovereign investor CYVN Holdings’ investment of $1.1 billion in 2023 and a further $2.2 billion in Chinese EV maker Nio Inc., making it the largest shareholder. In exchange, Nio signed a licensing deal allowing CYVN’s brand, Forseven, to use its EV technology and software[para. 7].

Compared to Dubai’s early and necessary diversification, Abu Dhabi’s vast oil reserves (holding 96% of the UAE’s total and ranking sixth globally) have fueled its powerful sovereign funds, earning it the moniker “capital of capital.” While Dubai favors spectacle, Abu Dhabi focuses on global brand recognition, exemplified by attractions on Yas Island like Ferrari World and a planned Disney theme park, plus the city’s cultural investments on Saadiyat Island, including the Louvre Abu Dhabi and forthcoming Guggenheim Museum[para. 8][para. 9][para. 10].

The city is also rapidly expanding its airport, with passenger volumes expected to reach 32.3 million in 2025—double that of 2022. Etihad Airways is boosting transit tourism with free stopovers and deepening cooperation with Chinese airlines. In July 2024, the airport’s free zone inked a deal with JD.com to co-develop a logistics facility—JD’s first self-built project in the region[para. 11][para. 12].

The KEZAD free zone now houses 2,000 manufacturers and 1,000 trading firms, with nearly 40 Chinese companies based in China’s first Belt and Road industrial park there. Abu Dhabi offers competitive advantages: industrial electricity costs are about half those in China, there’s 100% foreign ownership, relaxed national hiring quotas, and subsidies for local staff[para. 13][para. 14][para. 15]. Emiratization quotas are far lower than in Saudi Arabia, easing operational burdens on foreign investors[para. 16][para. 17].

Other incentives include 10-year golden visas, tax exemptions, and a regulatory environment that attracted 6,700 millionaires to the UAE in 2024, the highest number globally[para. 18]. Still, bureaucracy remains a challenge, and while the UAE is more efficient than regional peers, many find Dubai outpaces Abu Dhabi in administrative speed[para. 19].

Abu Dhabi officials encourage personal visits for Chinese entrepreneurs, emphasizing the value of firsthand experience before making investment decisions[para. 20].