Assessing the Limits of the UAE's China Strategy
Increasing Global Tensions Narrow the Window for Strategic Balancing
The 2010s and 2020s have been a period of shifting priorities in the Middle East, particularly among Gulf countries seeking to diversify beyond hydrocarbons into tourism, services, and high-tech industries. Cautiously enthusiastic Gulf engagement with Russia and China has supplemented traditional security alignments with the West. Throughout this realignment, the United Arab Emirates has positioned itself as China’s primary Gulf partner, leveraging its strategic location, trade dominance, and technological partnerships to deepen ties with Beijing more than any of its regional counterparts.
While China’s economic ties with Gulf states have been growing for years, its mediation of the 2023 Saudi-Iran deal signaled a shift in Beijing’s presence in the region. Whereas China had previously approached the region on primarily economic terms, the Beijing-brokered deal between these two historical adversaries signaled for the first time that the People’s Republic had accrued notable leverage in Gulf affairs, even with a regional powerhouse like Saudi Arabia. As China continues to push for diplomatic weight in the Middle East, countries that do not consider a commitment to the shared values of a Western-led international order to be an integral part of their national identity would, at least at a glance, be a convenient audience for Beijing’s diplomatic charm.
While China’s economic footprint has expanded in the Middle East, the UAE’s security framework remains deeply tied to the West, revealing a careful balancing act between opportunity and necessity. China’s growing influence presents an opportunity for the UAE, not a replacement for its deep-rooted ties with the United States. Rather than choosing between the two, Emirati leaders have pursued a strategy of diversification by leveraging economic cooperation with China while maintaining critical security and defense ties with Washington.
However, as U.S.-China tensions escalate, the Gulf’s days of playing both sides may be running out.
Beijing has steadily embedded itself in the Emirati economic, technological, and infrastructure sectors and established itself as a major partner in the UAE’s development strategies. As China has sought heightened engagement with the Middle East through its Belt and Road Initiative (BRI), the UAE has benefited from Chinese investments in ports, logistics, and industrial zones, among other areas. This enhanced cooperation seems to provide mutual benefits, particularly as Gulf states seek to expand their political and economic relations in all directions rather than simply further toward their traditional Western partners.
Through the BRI, China has positioned the UAE as a crucial logistics hub, using Emirati ports and free zones to facilitate trade flows across the Gulf, Africa, and South Asia. The two countries have also established a $10 billion joint investment fund that will support multinational projects in both countries and facilitate further investment in BRI projects worldwide. Indeed, the Gulf country’s geographic positioning roughly halfway between the two great powers of our time has proven valuable in both practical and symbolic terms.
According to the UAE Ministry of Economy, China is the UAE’s largest trading partner, with bilateral trade reaching $86.7 billion in 2023. Imports from China made up the bulk of that figure at $77.4 billion, while non-oil exports totaled just $2.9 billion, with another $6.3 billion in re-exports. Beyond its trade with China, the UAE moves goods at an enormous scale, with re-exports alone reaching $183 billion in 2023. As U.S.-China tensions have reignited under Donald Trump’s second administration, the UAE’s trade relationship with Beijing may stand to blossom as shifting, if not outright volatile, American interests in the region arise.
Beyond trade, financial cooperation has also expanded. The UAE increasingly settles transactions in the Chinese yuan (RMB), reducing its reliance on the U.S. dollar. This cooperation is expected to grow since the Emirates joined the China-stewarded BRICS organization in early 2024, signaling the country’s willingness to associate with de-dollarization efforts in the international economy.
China has sought investments in the UAE that span key sectors, including supply chain management, technology and manufacturing, chemical engineering, green energy, and telecommunications. The Emirati strategy of modernization and diversification has attracted investment from numerous Chinese companies, creating jobs, bolstering development, and reinforcing the Emirates’ status as a hub for global business.
However, the UAE’s security foundation remains anchored in the West as the country has long depended on the U.S. and its allies for military protection, advanced defense technology, and strategic partnerships. While the UAE has pursued an economic balancing act between China and the West, its military commitments tell a different story — Washington still holds decisive influence.
Beyond its direct defense ties with Washington, which include hosting the U.S. Air Force’s 380th Air Expeditionary Wing at the Al Dhafra Air Base, the Emirates also host defense installations operated by Canada, Australia, and New Zealand at the Al Minhad Air Base. Historically, the U.S. and France have been major arms suppliers to the country with previous deals, including the UAE purchasing 80 French Rafale fighter jets as part of a $17.2-billion deal in 2021 and $2.2 billion on American high-altitude missile defense technology in 2022. While the Emirates took delivery of the first round of Rafale jets in January of 2025, defense exchanges with Washington have taken a hit in recent years, most notably when a proposed sale of F-35 jets fell apart in late 2021.
Outside of direct arms transactions, American and Emirati armed forces regularly conduct joint exercises across land (Iron Union, Native Fury), sea (Iron Defender), and air (Desert Flag) domains. In 2024, Emirati troops conducted land exercises on American soil for the first time in a move described by one U.S. Army General as highlighting the “proficiency of the UAE Land Forces and strength of our partnership.”
In regional affairs, the Emirates also remains generally aligned with the U.S., particularly regarding issues of international terrorism and regional balancing. The UAE threw its support behind the American War in Afghanistan, the only nation to contribute military troops to humanitarian missions in the war-torn country. They also contributed forces to the NATO-led military intervention in Libya.
It bears noting that the aforementioned aborted sale of F-35s, worth multiple billions, opened the door for China to pitch its newest J-35 jet as an alternative. However, progress in this area remains unclear. Nonetheless, it reflects Beijing’s continued openness to enhancing security cooperation with the Emirates. In 2018, the two countries upgraded their relationship to a comprehensive strategic partnership, expressing a shared commitment to enhancing their bilateral ties and cooperation across various domains.
In 2023 and 2024, the two countries partook in joint air force exercises in Western China’s Xinjiang region, raising concerns about Chinese access to Western military technology as Emirati forces used French Mirage 2000 jets based at China’s Hotan Airport for the occasion. Notably, these jets are also used by Taiwan’s Republic of China Air Force, making any knowledge of their workings strategically valuable to China. Previously, China sold an undisclosed number of Hongdu L-15 jets, possibly stemming from an earlier proposition that hinted at the sale of 12 L-15s with an option for 36 more at an undetermined future date.
For now, the UAE’s engagement with China remains tactical rather than transformational. The Emiratis use these engagements to hedge against over-reliance on the West by exploring potential alternative arms suppliers. For China, they provide a figurative bridge to regional and Western engagement as Beijing’s efforts to expand multilateral ties around the globe continue.
However, taken within the context of increasingly unpredictable American strategic priorities at both the domestic and international levels, the balancing strategy pursued by countries like the UAE may prove more difficult to maintain in the coming years.
Abu Dhabi has, so far, navigated the U.S.-China rivalry with pragmatism, but growing external pressures are making neutrality harder to sustain. Rising U.S. pressure to curb Chinese influence within Emirati borders is already testing the limits of the UAE’s balancing strategy. From the collapse of the F-35 fighter jet deal in 2021 over Huawei concerns to broad American warnings that cooperation with China in sensitive sectors could leave lasting bruises on bilateral ties with Gulf countries, Washington has made it clear that it increasingly views China’s presence in the region as a direct threat to its interests.
So long as Washington sees China as a national security threat, the UAE’s balancing act edges closer to becoming a liability rather than an advantage. The deeper its economic ties with Beijing grow, the greater the risk to its defense cooperation with the West.
China’s ambitions may also strain its relationship with the UAE. An expanding Chinese military footprint in the Gulf could provoke stronger U.S. pushback and force Abu Dhabi to clarify its stance. If China moves beyond economic influence toward an open security presence in the region, ambiguity will no longer be an option. Meanwhile, the UAE’s financial realignment, seen in its rising yuan (RMB) trade settlements and BRICS accession, signals a shift away from dollar dependence but also risks limiting its access to Western financial systems. In an era of growing economic and security fragmentation, the UAE’s quasi-hedging strategy may no longer be sustainable.
For now, Abu Dhabi continues to thrive in a world of great power competition, but should the U.S.-China strategic competition devolve into a zero-sum game, neutrality could vanish. In that world, the Gulf’s balancing act isn’t a strategy but a countdown.
Editorial contributions by Rachael Rhine Milliard
Editorial assistance by Audrey C Scott
The views and information contained in this article are the author’s own and do not necessarily represent those of The Asia Cable.