Abu Dhabi strikes deal with Chinese province of Jiangsu

• Deal to attract Chinese manufacturers
• Jiangsu is world’s 12th largest economy
• Focus on solar, hydrogen and healthcare

Abu Dhabi is turning to the Chinese province of Jiangsu, the 12th largest economy in the world, as it seeks to expand its manufacturing sector.

The Abu Dhabi Department of Economic Development and Jiangsu Provincial Overseas Cooperation and Investment Company have signed an agreement that aims to attract more Chinese industrial investments.

The focus is on manufacturers that specialise in solar, hydrogen, electric vehicles, healthcare, 3D printing and petroleum equipment making.

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The agreement, signed on the sidelines of a Chinese government delegation’s visit to Abu Dhabi in October, also seeks to advance the development of industrial zones.

Jiangsu, a coastal province in eastern China, had a GDP of about 12.3 trillion yuan ($1.7 trillion) in 2022, making its economy bigger than South Korea’s or Spain’s.

Manufacturing activities make up more than 45 percent of Jiangsu’s GDP. Its trade with the UAE rose 18 percent in 2022 to reach AED22.7 billion ($6.2 billion).

“We believe this partnership will propel our efforts” to expand the sector, said Arafat Al Yafei, executive director of Abu Dhabi’s Industrial Development Bureau.

The emirate aims to double the size of its manufacturing sector by 2031. 

Abu Dhabi’s non-oil real GDP stood at AED154 billion in the second quarter of 2023, up from AED146 billion in Q1 and the highest quarterly figure since 2014. 

The Statistics Centre Abu Dhabi’s report for Q2 showed that the emirate’s economy grew by 3.5 percent year on year, slowing from 3.9 percent in the previous quarter but driven by non-oil growth of more than 12 percent. 

Analysts have revised up their growth forecasts for Abu Dhabi on the back of the figures.

“Although we had anticipated that growth would slow in Q2, it still surprised to the upside,” BMI said in a research note.

BMI’s forecast has been raised from 1 percent to 2.6 percent this year and from 3 percent to 4 percent for 2024.

Outperforming non-oil activity will keep Abu Dhabi’s 2023 growth above the 2015-19 average of 2.1 percent, BMI predicted.

“We expect that the rapid progress on diversification plans will keep the growth rate in non-oil activity in double digits in the second half of 2023,” it said.

Non-oil activity made up 53.7 percent of Abu Dhabi’s GDP in Q2.