UAE caught between US and China as powers vie for influence in Gulf

Via Financial Times

Shortly after opening the largest Covid-19 testing centre outside of China, the United Arab Emirates offered the US embassy hundreds of tests to screen its staff. But the gesture by the UAE — one of the US’s closest regional allies — was met with a rare snub.

“The offer was politely declined,” said a US official. The reason was the involvement of Chinese firms and technology, which raised a “red flag” and concerns about patient privacy, the official added.

The rebuff laid bare lingering tensions between Abu Dhabi and Washington over the UAE’s deepening relationship with China at a time when the Trump administration has been trading verbal blows with Beijing over the coronavirus pandemic.

As the crisis has created new battle lines between Washington and Beijing, Gulf states have been forced to strike a balance between the immediate need to deal with the outbreak and deepen ties with China, one of their largest buyers of crude, and the obligation to appease their historical ally, the US.

“The UAE is the frontline of China’s expanding influence,” said a western official. “The US previously gave the UAE a bye, but now the Americans are coming at them over this relationship — there is a sense of you are with us or against us in this cold war, throwing into sharp relief tensions that have been building for some time.”

Abu Dhabi’s Crown Prince Mohammed bin Zayed (second right) and Chinese President Xi Jinping (second left) attend a bilateral meeting at the Great Hall of the People in Beijing in July 2019 © Andy Wong/AFP/Getty

The UAE testing facility was opened in late March by a joint venture between Chinese genomics company BGI and artificial intelligence group G42, which has links to the Abu Dhabi ruling family. Based in the capital, the centre has underpinned the UAE’s Covid-19 screening drive, which has delivered more than 2m tests in a population of 9m people — one of the largest per capita testing rates in the world.

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But for the US embassy, the combination of a China-based genomics business and an Abu Dhabi entity with an opaque ownership structure provoked fears that sensitive information on its diplomats could find its way to Beijing.

“There were concerns raised about patient privacy and the way that the tests could be used,” the US official said.

BGI, which is privately owned, said it has no access to patient data, which is managed by local health authorities. G42 declined to identify its owners, while saying “strict information security and data privacy protocols are in place”.

Long before the coronavirus crisis, Washington was warning Gulf states that increasing technological collaboration with the Chinese private sector could endanger decades of security co-operation.

State-run telecommunications companies in the UAE — a transport and trade hub that links east and west — have awarded 5G cellular network contracts to Huawei, the Chinese company blacklisted by Washington.

“They risk rupturing the long-term strategic relationship they have with the US,” the US official said.

The UAE, like other Gulf states, has strengthened trade and political relations with China in recent years.

The Asian power, which imports most of its oil from the Gulf, has also stepped up non-oil trade with the region. At the turn of the millennium, annual bilateral trade with the UAE was $2bn, but it has since surpassed $50bn. Before the pandemic, the UAE was hoping to increase it to $70bn this year.

The economic and diplomatic value of the UAE’s partnership with China — underscored in 2018 with bilateral visits by their leaders — has crystallised during the coronavirus crisis.

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The UAE sent masks and gloves to China during the early stages of the epidemic, while Beijing shared medical knowledge as the virus swept through the Gulf.

China has sealed strategic partnerships with all the Arab Gulf states, except for Bahrain. In April, BGI expanded into Saudi Arabia, signing a $265m deal for six laboratories in the kingdom.

Beijing has sent shipments of medical equipment, such as masks and ventilators, to other partners across the Middle East, including Iraq, Iran, Egypt and Algeria.

Chinese genomics company BGI also runs coronavirus testing facilities elsewhere, like this one in the Chinese city of Wuhan © STR/AFP/Getty

“China’s regional partnerships are a pretty sophisticated diplomatic tool, taking them to the edge of an alliance with co-operation on security but no troops needed on the ground,” said Jonathan Fulton, an assistant professor at Zayed University in Abu Dhabi. “The utility of this relationship, in the face of the US failure to treat itself, let alone help partners, has made China more attractive across the region.”

Gulf states still rely on US military muscle for protection, with China showing little interest or inclination to take on a role as arbiter of security in the volatile Middle East.

But Beijing has started to “nibble around the edges” of areas where the US fails to meet its Gulf allies’ requests, Mr Fulton said. For example, the US has barred the supply of advanced military drones to Saudi Arabia and the UAE, both of which have bought Chinese unmanned aerial vehicles.

“The Emirates will continue to look more to DC on security issues, but at the same time the force of gravity and connectivity to Asia is getting denser and denser,” said Mr Fulton. “I don’t see how that changes.”

Alluding to the Huawei dispute, a senior Gulf official said: “The Americans need to give technological alternatives.”

“You can’t say ‘don’t buy their rice, but I don’t produce rice’,” the official added. “It is manageable now, but this issue will be more insurmountable as we move forward.”