Today, the Gulf countries do business with both China and the United States. Now analysts of rich countries are choosing which of these two partners to move forward with, since maintaining such a balance forever does not seem possible and relevant.
Economic diversification and digital hierarchy
Looking back to 2024, it becomes clear that for the authorities of the Gulf states in the past year, two goals were most relevant. The first was to promote their own ideas for economic diversification. The second goal concerned the digital hierarchy and was to leave their mark on the global technological map. Given the Eurasian mood and the possibilities of technological synchronization, achieving these goals implied a precarious balance — a verified partnership with both the West and China.
In this case, China has nothing to prove — the country has long held the title of the most technologically advanced in the world and sets top trends: from blockchain and Big Data to online medicine and augmented reality technologies. The technological and industrial history of the United States also speaks for itself, but with an emphasis on the formation of a global digital environment. Starting with personal computers, the revolution of social networks and e-commerce, American technological visionaries are constantly expanding the boundaries of the possible.
China and finance VS USA and high technology
The question arises as to who the Gulf countries will choose as their priority partner in 2025. The primary factor is financial, and China has already become the Gulf’s largest trading partner. Rapidly increasing its investments in the region, Beijing is fiercely strengthening commercial ties with Gulf enterprises, building infrastructure and introducing industrial technologies. We are talking about billions of petrodollars that are pouring into technology firms and energy projects. As a result, new markets are opening up and existing ones are expanding.
When it comes to strengthening technological ambitions, the choice is clearly in favor of the West. The UAE, being the most promising Gulf country in the field of technology, has already attracted Microsoft as a partner for the G42, a local leader in artificial intelligence (AI). Microsoft is also setting up a tech hub in Abu Dhabi and investing in AI infrastructure with Blackrock, the world’s largest asset manager, and MGX, a UAE technology fund. According to Microsoft President Brad Smith, the breakthrough is “a new model for geopolitical and economic cooperation” between the Middle East and the West. Meanwhile, Saudi Arabia is setting up a $40 billion AI fund with American venture capitalists, and Google is planning an AI hub in the kingdom.
Alternative options in case of conflict
The problem is that the US is hostile to technological cooperation with China. This is what led the G42 to cut ties with Chinese telecoms giant Huawei before striking a deal with Microsoft. In fact, this is the key reason why the Gulf states have to make a choice. Cooperation with the US allows them to satisfy technological aspirations that are central to their plans for economic diversification and future growth. However, the downside is that it is situational: the US still views the region as a tool in its efforts to strengthen its influence in the Global South.
In this regard, China is clearly a winner: the Gulf states have long viewed it as a reliable partner for achieving their current and future goals. China has helped the UAE become a global trade hub by creating distribution centers, huge warehouses and other necessary infrastructure. At the same time, it is prioritizing the transition to renewable energy, supplying solar panels and wind turbines. And Chinese universities have long been developing cooperation in science and technology with their colleagues in the Persian Gulf.
However, the Gulf states are actively looking at alternative options, analyzing which of the other Asian countries they can work with to achieve ambitious goals. For example, Saudi Arabia has already entered into cooperation with Indian and South Korean construction companies in a number of areas. Yes, they are inferior in speed and capacity, but in any case, they act as a backup option in case difficulties or conflicts arise in collaboration with China.
