The UAE and China have signed several agreements to strengthen their strategic partnership and bilateral trade. These agreements will not only boost the economies of both countries, but also have the potential to change the flow and structure of regional and international trade.
One of the most important agreements is the announcement that the UAE and China have signed a currency swap worth 35 billion yuan. This is part of an ongoing effort by China to make its currency one of the mediums of international trade. Given the continued political and economic mismanagement of the dollar by the US, the strengthening of alternative currencies for international trade is necessary.
By taking part in the currency swap, at a time when the yuan is increasingly being used in international trade, the UAE is stating its commitment to expanding trade and commerce with the second biggest economy in the world.
To better insulate itself from the financial turmoil in Europe and the economic problems in the US, it is necessary that the UAE build commercial and political relationships with new international powers. Despite the global financial turmoil, the Chinese economy is still expanding at an impressive rate, with 8.9 per cent growth reported for the last quarter of 2011. While there are some concerns about the Chinese economy, for now its problems are those of success.
The agreement to share and develop cost-effective green energy technologies is also particularly important, given that both countries have significant amounts of carbon emissions. Not only will this reduce their impact on the global environment, but this will make them leaders in an industry to which the international community is increasingly turning to meet its energy requirements.
By strengthening their partnership in these difficult times, the UAE and China are ensuring that they will be an integral part of the new world economic order.
