U.A.E.'s growing relationship with China

LONDON, England (CNN) -- This week the who's who of the United Arab Emirates rubbed shoulders at a Gala dinner. Business people talked deals, swapped business cards and rubbed shoulders with government elite -- in China.

The Chinese government invited Sheikh Mohammed Bin Rashid Al Maktoum on an official visit to the country. The ruler responded by arriving with an entourage of 50 business leaders and throngs of government support -- an obvious symbol of the importance the U.A.E. has put on growing relations with China.

"China is a booming market. We're here exploring opportunities with Chinese government entities as well as Chinese private sector companies," said Sultan Al Jabar CEO of sustainable energy company, Masdar.

The U.S. and Europe arguably identified the exploding opportunities in China 15 years ago and, in fact, make up the bulk of the investment into the country. Compared with the huge amounts of dollars pouring in from these countries, Middle Eastern nations do relatively little business in China.

Trade has mostly centred on oil imports coming out of the Gulf and cheap Chinese goods coming into the region from the other direction.

Neverthess, trade between the two countries reached $19 billion last year and the U.A.E is keen to strengthen and diversify ties with the booming Chinese economy by investing in areas like finance, real estate and construction.

"China, India, the U.A.E. are considered fast growing emerging markets. So, what it is, is we have to see what are the niche markets and some growth where we can complement each other rather than compete," Sheikha Lubna Al Qasimi, the U.A.E. Minister of Foreign Trade told CNN.

Sultan Ahmed Bin Sulayem is Chairman of Dubai World, the Dubai government's powerful holding company which supervises a portfolio of businesses -- including the third largest ports operator in the world, DP World.

The company is looking at investing in China and considers real estate and finance attractive investments, according to Bin Sulayem.

"We would like to do business in a sector we are familiar with. We're big in real estate. We're big developers. We also look at the financial sector because we have a merger with a mortgage company in Dubai. We are investing in financial institutions," he said.

Bin Sulayem thinks that in today's climate it is easier to invest in the East than the West: "We are concentrating in China, concentrating in Africa, because these are places where they're hungry for capital and there is growth potential," he said, "The officials in the East are encouraging while the officials in the West are creating noises unnecessarily. So, naturally, people will look at more investment in the East," he continued.

To drive home the U.A.E.'s interest in doing business with China, Sheikh Mohammed Al Maktoum met with Chinese president Hu Jintao in Beijing.

He also oversaw the signing of a private investment deal between telecommunications firm, Etisalat announcing plans to set up a research center with a Chinese partner, Huawei Technologies.

The two companies have been working together for about five years but getting things done in China is still far from easy, according to Etisalat CEO, Ahmad Abdulkarim Julfar: "At the beginning of our relationship with Huawei, there was a communication issue. But that has been overcome. With others, we have to approach different people to get a decision made. So, in business, time is the most valuable thing and we don't have time to waste," he said.

Very few of the U.A.E. delegation have any experience working with the Chinese, which is why the government is conducting a seminar especially for Sheikh Mohammed Al Maktoum's executives on the basics of doing business in China. They hope the lessons which include talking about the country's laws and business culture will help any future business collaborations to go smoothly.

The Chinese are working to bridge the cultural gap too. "We tell Chinese companies to be careful of eating pork and drinking alcohol in the U.A.E., to learn English and Arabic and not to sell fake goods. Chinese firms are still finding their way," Qiu Yong Xiang, General Manager of state-owned investment company, China International Intellectech Corp.

China and the U.A.E. are certainly building closer ties and striving for more profitable partnerships. E-mail to a friend