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Sustainable development offers the instruments and opportunities for nontraditional stakeholders to augment China-Arab nations cooperation

By WANG RUI and DENG MINNE | China Daily Global | Updated: 2024-06-19 07:53
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The launch of the China-Arab States Cooperation Forum 20 years ago has strengthened the ties between the two sides with dozens of formal mechanisms established for political, economic and cultural exchanges. Sustainable development, despite the nuanced interpretation and approaches of various countries, has been manifested through enormous bilateral or multilateral programs for renewable energy, green development, digitalization, artificial intelligence, and so on.

The practices of leading players, existing mechanisms and instruments, as well as the aspirations of the next generation, make sustainable development a good entry point to initiate dialogues and cooperation to complement the existing mechanisms. This can further South-South cooperation and accelerate the sustainable transformation across regions.

Both China and Arab nations, especially the Gulf Cooperation Council countries, are undergoing an economic transformation toward a more sustainable future, underscoring the exchange of industries such as renewable energy, new energy vehicles and digitalization. Chinese businesses, particularly State-owned enterprises, are mobilizing existing technical assets to build sustainable value chains in Arab nations, while Arab investors are embedding social and environmental impact management into their global investing to facilitate change.

During past decades, industries such as clean energy, healthcare and artificial intelligence have already been established in China, based on which, Chinese businesses are capable of integrating both the "soft" side such as talents cultivation and technology sharing, and the "hard "side such as infrastructure construction in Arab nations. For example, China Railway 18th Bureau Group Saudi Company has initiated a processing workshop project at King Fahd University of Petroleum and Minerals in Saudi Arabia that involves building a site and providing training for local college students to learn and practice advanced processing techniques. Additionally, encouraging local employees to obtain internationally recognized certificates and conducting capacity building for local suppliers is becoming prevalent among Chinese companies in Arab nations. Therefore, a localized value-chain approach reinforces the business sustainability of China as well as enhances the capability of Arab nations' sustainable transformation.

Arab investors, dominated by sovereign wealth funds such as the Abu Dhabi Investment Authority, Kuwait Investment Authority and Saudi Arabia's Public Investment Fund, are active in China and Asian markets with their investments. By embedding long-term impact goals into investment strategies, Arab investors pursue not only financial returns but also environmental and social impact from their global presence. Meanwhile, Arab countries are seeking to align with international standards. For example, the United Arab Emirates has mandated companies to publish corporate social responsibility or sustainability reports adhering to the Global Reporting Initiative standards since 2021, further mainstreaming sustainability at the local level.

While the value-chain-based approach of Chinese companies and sustainable investing by sovereign funds of Arab states have made big steps to strengthen the partnership between China and Arab nations, the full potential of cooperation to promote sustainable transformation is yet to be unleashed.

First, sustainable development encompasses comprehensive thematic areas beyond any single industry. For example, humanitarian aid requires the coordination of multiple industries under policy endorsement. China State Construction Engineering Corporation has built a vaccine factory in the UAE which contributes a production capacity of 200 million doses. After the outbreak of the COVID-19 pandemic, another Chinese company BGI established nucleic acid testing laboratories in Saudi Arabia and conducted over 18 million tests. These two together effectively assisted the local emergency response to the pandemic. Timely responses to other emergencies also require prior planning, material goods and technical preparation. Synergies across industries such as manufacturing, transportation and warehousing create responsible business opportunities, and a joint China-Arab nations force for humanitarian aid that covers three continents, and which can offer an intraregional solution that adds global preparedness to the humanitarian crisis.

Second, sustainable development opens the window for more flexible and diverse engagement modalities, together with the participation of nontraditional stakeholders. So far business actors, particularly state-owned enterprises, sovereign funds and governments have played a leading role under the current cooperation mechanisms. But some initiatives that engage nontraditional players have started to emerge. For example, Abu Dhabi hosted the Asia Venture Philanthropy Network 2024 Global Conference, a gathering which attracted various stakeholders such as family offices, foundations, private investors, and startups. It is the first time this kind of event has been held in an Arab nation, although trade fairs and industry exhibitions have been convened in the region in recent years. Other philanthropic players from China and Arab nations, such as leading foundations and high-net-worth individuals may also be engaged at different levels. Undoubtedly, sustainable development as an umbrella that breaks the boundaries between sectors, as well as that between businesses and nonprofits, offers opportunities for China and the Arab world to engage various stakeholders and deepen their collaboration.

Last, sustainable development looks into the instruments and opportunities that originate from the strengths and potentials of China and Arab nations. Current bilateral mechanisms have not fully leveraged domestic sustainability resources from both sides. China and Arab nations are pursuing international alignment on either ESG or CSR reporting, yet possible action plans for sustainability between the two are underdeveloped. Looking to the future, emerging Generation Z investors and entrepreneurs from both sides possess a sustainable ambition unprecedentedly, who take not only business-bound benefits but also people- and planet-centered agendas into account. Therefore, sustainable development can be a language to connect actors, either technology-powered Chinese players or financing-powered Arab players who are performing their sustainable duties in silo currently, and to boost social innovation to translate ambitions into reality.

Wang Rui


Deng Minne

Wang Rui is China representative of nonprofit organization GlobalGiving. Deng Minne is a consultant on ESG and CSR. The authors contributed this article to China Watch, a think tank powered by China Daily.

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