With the rise of "non-oil economies" like the United Arab Emirates, the center of gravity of the global economy has gradually shifted from traditional oil-exporting countries to more diversified developing countries. China is the UAE's largest trading partner, mainly exporting mechanical and electrical products, textiles, metals and chemicals. At the same time, the UAE has strong demand for infrastructure and is accelerating its green transformation.
As a resource-rich country, the UAE has made significant progress in its successful transformation in recent years.
In order to accelerate the creation of a hinterland-backed financial, trade and logistics free port of the Middle East and North Africa, the UAE has fully exploited the dividends of the diversified transformation of the Gulf countries and has demonstrated strong momentum in all-round economic development.
Abu Dhabi, Etihad Towers complex. Photo GettyImages
The United Arab Emirates: the economic hub of the Middle East, at the forefront of diversified transformation
Like other Gulf countries, oil has brought enormous wealth to the United Arab Emirates: with just over a million citizens, they occupy 5.6% of global oil reserves and their per capita production ranks first in the world.
However, the nature of a country with small resources makes it highly exposed to economic fluctuations and external risks.
As such, the UAE is committed to tertiary industry development to create a regional financial, commercial and maritime hub, taking advantage of its superior geographic position guarding the Persian Gulf and located between Asia, Europe and Africa.
In recent years, the transformation of the United Arab Emirates has achieved remarkable results. The non-oil economy accounts for more than 70%, and its growth rate exceeds that of other resource-rich countries. In the first three quarters of 2023, the non-oil economy grew at a rate of 5.9%.
However, the United Arab Emirates is very dependent on international trade: in 2022, the trade dependence rate reached 187%, while the percentage of net exports to GDP remained stable at 25% throughout the year, much ahead of to other comparable countries.
After 2012, the percentage of the UAE's oil exports decreased, while the percentage of non-oil exports and re-export trade continued to increase. The services trade deficit continued to narrow thereafter, turning into a surplus after 2019.
Export trade, therefore, has become a new driver of economic growth in the UAE.
The Gulf countries have opened their doors and their service industries have spread across three continents
The United Arab Emirates took advantage of the favorable position to create a regional trade center.
On the one hand, in fact, the United Arab Emirates is located at the intersection of three continents, which facilitates the flow of people and logistics, has complete infrastructure and presents unique advantages in an unstable region.
Through the creation of numerous economic free zones, it has created a free port and safe haven for the entry and exit of international capital and is also the preferred destination for consumption of the Middle East's wealthy class, attracting many multinational companies.
The tertiary industry in the UAE has been very prosperous in recent years, with service sector value added accounting for around 55% of the total compared to 41% ten years ago.
Profitable industries include finance/real estate/tourism/entrepreneurial trading/information services.
Following the Covid-19 outbreak, the UAE's services sector not only recovered from the impact, but its growth accelerated further.
Since 2019, foreign investment has continued to flow in significantly, house prices and rents have increased, and the number of tourist arrivals has exceeded that pre-epidemic.
The UAE National Development Plan 2022 plans to double GDP over the next ten years, focusing on the development of service industries, re-export trade and high-tech industries.
Capital Market: Benefiting from economic transformation and foreign capital inflows, the UAE stock market has performed strongly in recent years
Abu Dhabi and Dubai are the two main financial markets of the United Arab Emirates. The industry structure is dominated by finance, real estate and industry.
From 2021 to 2023, ADX/DFM bucked the trend and grew 90%/63% under the global financial squeeze. The rise in ADX was mainly due to strong oil prices and government asset injections, while the rise in DFM benefited from the successful transformation: the rapid growth of post-epidemic services consumption and re-export trade.
The recovery led the DFM index to achieve annual growth of more than 30%, effectively resisting the compression of valuations.
Dubai launched the “IPO Accelerator” program and the increased supply of high-quality assets has attracted more investors to participate in the stock market.
Under the “anti-globalization” approach, Dubai has relied on stability and the political environment has become a “safe haven” for global funds, and large foreign capital inflows have supported stock market performance.
Looking ahead to 2024, the Middle East region is undergoing transformation and the recovery of the global manufacturing industry is expected to provide support to the UAE's growth.
Additionally, global liquidity is available to support the performance of emerging markets. optimistic about investment opportunities in the UAE market.
In November 2023, the Shanghai Stock Exchange and DFM signed a memorandum of understanding to follow up on China-UAE capital market cooperation.
Supply and demand for technological production are in line with global trade, and the share of Chinese exports to the UAE has increased
China is the UAE's largest trading partner, mainly exporting mechanical and electrical products, textiles, metals and chemicals. At the same time, the UAE has strong demand for infrastructure and is accelerating its green transformation.
The demand for related products is very consistent with China's industrial advantages.
In recent years, the categories in which the share of Chinese exports to the UAE have increased significantly include automobiles, electrical equipment and communications equipment.
The directions of cooperation between Chinese domestic listed companies and the UAE in technology manufacturing mainly include: equipment manufacturing, energy transformation, digital computerization and high-value materials.
China's Xpeng signs partnership with UAE's Ali&Sons, eyes Italian market
According to NAC reports, China's Xpeng said last February that it has entered into a strategic partnership with UAE-based Ali&Sons and added Italy to its plans for Europe as the electric vehicle manufacturer accelerates its overseas expansion.
The announcement adds to Xpeng's partnerships with local dealers for the Egypt, Azerbaijan, Jordan and Lebanon markets.
Multiple Xpeng models will go on sale in the five Middle East and North African countries starting in the second quarter of this year, the company said in a statement on its WeChat account.
Xpeng will begin offering the G6 and G9 SUV models in the UAE from the third quarter, while deliveries of the P7 sedan and G9 SUV will start in Jordan and Lebanon from the second quarter and in Egypt from the third quarter.
The firm also expanded its European market plans to include Italy. It had previously said it was planning to expand into Germany, Britain and France at the IAA Mobility motor show in Munich last September.
Other than a bigger global footprint, Xpeng also eyed more hiring and artificial intelligence R&D investments, as it seeks to survive what it describes as a "bloody sea" of competition in the world's largest auto market.
About XPENG
XPENG is a global smart electric vehicle company founded in 2014 in Guangzhou, China, developing clean, intuitive, and creative mobility solutions. With industry-leading R&D facilities, XPENG is bringing vehicles with superior safety, electric efficiency, and on-road performance to markets across the globe. The company is constantly working to advance its core technology offering, including autonomous driving capabilities, SEPA 2.0, and captivating in-car infotainment systems. XPENG has headquarters in Guangzhou and Amsterdam, with additional offices in Beijing, Shanghai, and Silicon Valley.
The official note
"February 22, 2024. XPENG Motors (“XPENG” or the “Company,” NYSE: XPEV and HKEX: 9868), a leading Chinese smart electric vehicle (“Smart EV”) company, today announces its latest long-term strategic partnership with UAE dealership group Ali&Sons.
As part of XPENG's international expansion plans, a growing list of new partners from XPENG's strategic markets have joined XPENG in bringing the brand's latest smart EVs to local consumers, including:
Egypt, RAYA
Azerbaijan, SR Group
Jordan, T Gargour and Fils
Lebanon, Gargour Asia SAL
XPENG global market dealer strategy focuses on establishing partnerships with local dealers to create a first-class distribution, sales, and service network in various regions. The partnerships will enable XPENG to bring its latest Smart EVs to local consumers with branded showrooms, after-sales support, and comprehensive guidance through each stage of the buying process.
XPENG will offer the G6 SUV and G9 SUV models in UAE from Q3 2024. Developed for global markets, both the G6 and the G9 are underpinned by XPENG's evolutionary Smart Electric Platform Architecture (SEPA) 2.0 platform, which sets the foundation for future production models while reducing development and manufacturing costs.
XPENG started P7 sedan and G9 SUV deliveries in Israel and Azerbaijan in late 2023. This year, XPENG will start delivering these vehicles in Jordan and Lebanon from Q2, and in Egypt from Q3. The P7 is XPENG's bestseller, with over 100,000 sales in two years since its global launch.
Alex Tang, GM of International Markets, XPENG, said: "The new markets we are announcing today are recognised globally as the nucleus for EV growth, which makes this the natural and forward-thinking next step in our expansion into the EMEA market. At XPENG, our ambition is to become a leading player in the smart EV sector. We are committed not only to developing products that address local customer needs but also to bringing leading technologies and high quality to global customers."
The partnerships mark several "firsts" for XPENG on its road to globalisation, with the UAE being the first market XPENG entered in the Gulf region, along with Azerbaijan as the company's first in Central Asia and Egypt as the first in Africa. Expansion into additional European markets including Germany, the UK, Italy, and France is also set in parallel for this year".
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