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Sustainability: The New “Trade Currency” between China and the Middle East
March 2025
By Unice Liu, Associate Director. Unice works in Sandpiper’s Dubai office and has extensive experience in ESG, sustainability, and strategic communications.
As global economies evolve to prioritise sustainability, ESG considerations have transformed from a peripheral concern into a central tenet of global business. Bloomberg Intelligence estimates that global ESG assets will exceed $50 trillion by 2025, making ESG a “new trade currency” which is essential for fostering trust, attracting investments, and shaping international commerce.
This shift is especially evident in the growing partnership between China and the Middle East. As both China and the Middle East undergo significant economic realignment, ESG has emerged as a key driver of bilateral relationships between the two. For businesses eyeing opportunities in these emerging relationships, ESG adoption is not just an opportunity but a necessity.
China and the Middle East’s shift towards sustainability
Historically reliant on fossil fuels, China and the Middle East are now taking bold steps to embed sustainability into their economies. China, the world’s largest greenhouse gas emitter, has pledged to achieve carbon neutrality by 2060. This ambitious target has accelerated investments in renewable energy, green technologies, and sustainable infrastructure.
Similarly, the Middle East, led by nations in the Gulf Cooperation Council (GCC), is diversifying its oil-dependent economies. Landmark initiatives such as Saudi Arabia’s Vision 2030 and the UAE’s Net Zero by 2050 Strategy are propelling the region toward renewable energy, smart cities, and ESG-aligned investments.
These sustainability commitments are no longer isolated domestic agendas, but are shaping bilateral and multilateral trade dynamics. ESG is now a prerequisite for foreign direct investment (FDI), joint ventures, and strategic partnerships between the two regions. Chinese investors, for instance, are drawn to the Middle East’s renewable energy projects, while Middle Eastern sovereign wealth funds are actively pursuing opportunities in China’s clean energy and technology sectors.
One of the most significant China-Middle East collaborations has been in green hydrogen, a cornerstone of decarbonisation strategies. In 2023, Saudi Arabia’s NEOM Green Hydrogen Company signed agreements with Chinese firms to supply equipment and expertise for one of the world’s largest green hydrogen plants. This collaboration underscores how sustainability priorities are redefining partnerships, blending Middle Eastern ambitions with Chinese technological prowess.
Sovereign wealth funds in the Middle East, including the Abu Dhabi Investment Authority (ADIA) and Saudi Arabia’s Public Investment Fund (PIF), are also embedding ESG criteria into their global strategies. ADIA’s 2024 partnership with China’s LONGi Green Energy to develop solar projects highlights the growing role of ESG in driving cross-border investments and innovation.
ESG is also driving change in the financial sector. Green bonds and sustainability-linked loans are becoming instrumental in financing projects across both regions.
Stepping up regulatory efforts
Both regions are stepping up regulatory efforts to align with global ESG standards. The Middle East is actively adopting frameworks such as the Task Force on Climate-Related Financial Disclosures (TCFD), while China has integrated ESG considerations into its Belt and Road Initiative (BRI). In 2023, China’s Ministry of Commerce announced new guidelines requiring BRI projects to meet international ESG benchmarks, signalling a shift towards sustainable development.
Similarly, the UAE introduced mandatory ESG reporting for publicly listed companies in 2024, creating a more transparent investment environment. These regulatory advancements are laying the groundwork for deeper Middle East-China partnerships.
Opportunities for business leaders in ESG and communications
For business leaders, the Middle East-China ESG alignment offers compelling opportunities to enhance their sustainability practices and refine their communication strategies:
- Crafting ESG-centric messaging: Clear, authentic communication around ESG initiatives is critical. Businesses can align their messaging with global ESG priorities to build trust, attract investments, and strengthen their reputation among stakeholders in both regions.
- Showcasing leadership in sustainability: Businesses that effectively communicate their ESG efforts – such as renewable energy adoption, supply chain transparency, or community impact – can position themselves as leaders in sustainability, gaining a competitive edge in the trade corridor.
- Proactively engaging stakeholders: Building trust with regulators, investors, and consumers requires ongoing, transparent dialogue. Businesses should leverage platforms like industry events, digital campaigns, and thought leadership to showcase their commitment to ESG principles.
The Middle East-China focus on ESG principles is a strategic realignment that will shape global trade in the decades to come. For business leaders, understanding and integrating ESG into core strategies and corporate storytelling is no longer optional; it is essential in order to capitalise on the opportunities presented by these partnerships while contributing to a more sustainable and equitable global economy.
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