The Deepening Axis
The Abu Dhabi-China relationship has evolved from a straightforward buyer-seller energy dynamic into a strategic partnership spanning energy, technology, artificial intelligence, manufacturing, and financial investment. China is Abu Dhabi’s largest oil export customer. Abu Dhabi’s sovereign wealth funds are among China’s largest foreign investors. The relationship is deepening at a pace that has significant implications for Abu Dhabi’s economic strategy, its position in US-China competition, and the execution of the Economic Vision 2030.
Energy Partnerships
The energy relationship is foundational. China imports a substantial share of its crude oil from Abu Dhabi, with ADNOC’s long-term supply agreements providing both parties with volume security and pricing stability. China National Petroleum Corporation (CNPC) holds an equity stake in Abu Dhabi’s major onshore concession, securing China’s position as both a buyer and a partner in Abu Dhabi’s upstream operations.
The concession partnership model gives China direct operational involvement in Abu Dhabi’s oil production — a level of access that reflects the strategic importance Abu Dhabi places on the Chinese market. In return, CNPC brings technical expertise, particularly in enhanced oil recovery and unconventional resource development, and provides a committed long-term buyer for Abu Dhabi’s crude output.
Beyond crude oil, the energy relationship extends to natural gas, with discussions and agreements around LNG supply, gas processing technology, and cooperation in the emerging hydrogen economy. As China diversifies its energy mix to include cleaner fuels, Abu Dhabi’s combination of natural gas, hydrogen ambitions, and LNG export capability positions the emirate as a supplier across multiple energy vectors.
Technology and AI Cooperation
The technology dimension of the Abu Dhabi-China relationship has grown rapidly. Mubadala has invested in Chinese technology companies, and Chinese technology firms have established operations in Abu Dhabi, creating bilateral flows of capital, technology, and expertise.
Artificial intelligence cooperation is particularly significant. Abu Dhabi’s investment in AI — through MBZUAI, G42, and other entities — has included partnerships with Chinese AI companies and research institutions. The G42 group, an Abu Dhabi-based AI and cloud computing company, has navigated the complex terrain between US and Chinese technology ecosystems, with partnerships and investments involving entities from both countries.
The AI cooperation raises sensitive questions about the US-China technology competition. The United States has expressed concerns about technology transfer to China through Gulf intermediaries, and Abu Dhabi has had to manage these concerns while maintaining productive relationships with both Washington and Beijing. The resolution of this tension — including G42’s decision to prioritise its relationship with US technology partners — illustrates the pressure points that Abu Dhabi’s multi-vector foreign policy encounters in practice.
Belt and Road and Infrastructure
Abu Dhabi’s engagement with China’s Belt and Road Initiative encompasses port infrastructure, logistics corridors, and trade facilitation. COSCO and other Chinese logistics companies have invested in port and logistics infrastructure in the UAE, while Abu Dhabi’s position as a trading and logistics hub connects to Belt and Road corridors linking Asia, the Middle East, and Africa.
Khalifa Port and the Khalifa Industrial Zone Abu Dhabi (KIZAD) have attracted Chinese manufacturing and logistics tenants, creating a physical node in the Belt and Road network. The industrial zone model aligns Chinese manufacturing investment with Abu Dhabi’s economic diversification objectives — bringing foreign direct investment, technology transfer, and manufacturing employment.
Borouge’s Shanghai Facility
Borouge’s compounding manufacturing facility in Shanghai represents one of the most tangible commercial connections between Abu Dhabi and China. The facility processes polyolefin resins produced at Abu Dhabi’s Ruwais complex into speciality compounds for the Chinese and Asian markets, providing direct manufacturing presence in the world’s largest polymer consuming market.
The Shanghai facility demonstrates the bilateral relationship’s commercial depth. It is not merely a trade relationship — exporting raw materials to China — but an integrated manufacturing value chain in which Abu Dhabi-produced base materials are processed into finished products within China for Chinese customers. This level of integration creates economic interdependencies that reinforce the strategic partnership.
Sovereign Wealth Investment
Abu Dhabi’s sovereign wealth funds have significant exposure to Chinese markets. Mubadala has invested in Chinese technology companies, ADIA holds positions in Chinese listed equities through its global portfolio, and ADQ has explored investment opportunities in China’s healthcare, agriculture, and logistics sectors.
These investments create financial interdependencies and diplomatic channels. When Abu Dhabi’s sovereign wealth funds are significant shareholders in Chinese companies, both parties have a mutual interest in the success of those enterprises — and by extension, in the stability of the bilateral relationship that facilitates investment flows.
Navigating US-China Competition
The most consequential geopolitical challenge in the Abu Dhabi-China relationship is the pressure created by US-China strategic competition. Abu Dhabi’s security relationship with the United States — including defence cooperation, arms sales, and the implicit American security guarantee — coexists uneasily with the deepening economic and technology relationship with China.
The United States has signalled concerns about Chinese technology access through Gulf intermediaries, Chinese military-use technology deployed in the UAE, and the potential for Chinese intelligence collection through technology partnerships. Abu Dhabi has responded by making selective adjustments — restricting certain technology transfers, reorienting some AI partnerships toward US companies, and engaging in dialogue with Washington about the parameters of acceptable China engagement.
The fundamental challenge is that Abu Dhabi’s economic interests favour deep engagement with both the United States and China, while the emerging geopolitical reality increasingly demands choosing between them in specific technology and security domains. Managing this tension — maintaining productive relationships with both powers while avoiding the costs of exclusive alignment with either — is arguably the most complex foreign policy challenge Abu Dhabi faces in the current decade.
Implications for Vision 2030
The China relationship directly serves multiple Vision 2030 objectives. Chinese energy demand sustains oil revenue. Chinese investment contributes to manufacturing and technology diversification. Chinese technology partnerships support AI and digital economy development. The Borouge Shanghai facility captures value in the world’s largest consumer market.
The risk is that the China relationship becomes entangled in US-China competition in ways that force Abu Dhabi to choose between economic optimisation and security preservation. The vision’s execution depends on Abu Dhabi’s ability to maintain access to both Chinese markets and American security partnerships — a diplomatic balancing act that grows more demanding as great power competition intensifies.