Published 15 August 2017
OBOR forms an integral part of China's aspirational ascendancy in becoming an architect of the global financial and legal architecture. The core component of OBOR is massive Chinese outbound investment in infrastructure implicating the critical transport and energy sectors of participating nations thus triggering issues of state sovereignty and national security. Nations within OBOR's domain will increasingly focus on national security review of Chinese FDI. While reviewing FDI generally involves a careful cost-benefit evaluation and a rational balancing of interests, additional dimensions of complexity arise in terms of outbound Chinese investment into the GCC which impacts on this traditional balancing of interests: (1) the incipient U.S.-China rivalry is underway which may force both the U.S. and China to utilize auxiliary power in a global game for hegemonic leadership and (2) China's unique one-party political system which plays a prominent role in the governance of private companies. Most OBOR investment will be through Chinese State Owned Enterprises - thus raising the potential of non-financially motivated FDI (as it does with other nations' state-owned companies). In sum, China's outbound FDI into OBOR projects into the GCC will be more complicated given both the special relationship between the GCC and the U.S. as well as the unique nature of China's political system. This paper addresses the national security review challenges of China's OBOR investment in the GCC with particular reference to UAE, namely, balancing the potential immense economic advantages - which positively align with the UAE Vision 2021 - and potential national security concerns. The question of national security review of Chinese FDI will become increasingly important not just for the UAE but also for the GCC and dozens of other nations which fall within OBOR's realm.
This paper will be part of the TDM Special Issue on "One Belt One Road (OBOR)". More information here https://www.transnational-dispute-management.com/news.asp?key=1652