The Silk Road: Shaping the Global Industrial Future
History has shown that profound investment opportunities often arise in regions with enduring trade ties. In today’s ever-changing world, we are experiencing a pivotal period where nations along the ancient Silk Road trade route are crucial in shaping the new industrial future. Experts predict a staggering $100 trillion investment boom in power, industrial, and real estate projects between now and 2050 as part of the global transition to Net Zero. Approximately half of this capital is expected to be deployed in the Middle East and Asia, making these regions the focal point of the most significant shift in the global economy since the Industrial Revolution.
As the world’s largest trade bank, we have witnessed a clear signal from investors, entrepreneurs, and institutions, who are preparing for the forthcoming changes. Opportunities abound across the economic spectrum, particularly in the economies of the Gulf Cooperation Council (GCC), which serve as prime examples of ambitious, investment-led economic diversification programs.
The GCC, with its accelerated GDP growth in recent years, is set to become a pivotal player in the global economy. For instance, the United Arab Emirates (UAE) and China bilateral business corridor presents immense potential. The UAE has transformed into a vibrant hub for international trade, logistics, aviation, and investment, while China has established itself as the world’s second-largest economy and a leader in trade, logistics, and renewable energy technology. In 2022, non-oil trade between the UAE and China reached $72 billion, demonstrating the significant opportunities for bilateral investments.
Looking specifically at the UAE, its ambitious growth plans amplify its potential as an investment destination. The UAE government’s “We the UAE 2031” plan aims to double the size of the economy by 2031, generating over $200 billion in non-oil exports and surpassing $1 trillion in total trade value. The Dubai government’s D33 program focuses on enhancing foreign trade with Asia, aligning with its Dubai Economic Corridors 2033 initiative. Additionally, through the “Make it in the Emirates” program under the UAE’s “Operation 300bn” industrial strategy, clean energy and industrial innovation are prioritized to drive sustainable economic growth.
The UAE’s commitment to renewable energy is evident, with approximately $50 billion invested abroad to create an installed capacity of around 11GW. The country pledges to invest a similar amount at home and abroad in the upcoming decade. By combining forces with China, a leader in solar manufacturing capacity, the potential for growth in renewable energy is exponentially greater. This exemplifies the profound shift in opportunities when regions with strong historic trade ties come together to leverage their shared experiences of economic innovation and development.
For those who recognize the significance of economic shifts and wish to shape the future industrial landscape, now is the prime time to invest. The Silk Road, with its ancient legacy and enduring trade ties, holds the key to unlocking transformative investment opportunities. Regions like the Middle East and Asia, with 2,000 years of trade, investment, and business connections, will be at the forefront of shaping the new global economy.
By Stephen Moss, HSBC CEO – Middle East, North Africa and Turkey.