China and the United Arab Emirates agreed on Monday to set up a major investment co-operation fund, reportedly worth US$10 billion (S$14 billion), to benefit third parties and the two countries themselves.
After a meeting in Beijing, President Xi Jinping and the Crown Prince of Abu Dhabi Sheikh Mohammed bin Zayed Al Nahyan witnessed the signing of a memorandum of understanding on establishing the fund.
Launching the fund will "play an important role in deepening bilateral, pragmatic co-operation", Xi said.
Deng Li, director of the Foreign Ministry's Department of West Asian and North African Affairs, said the fund amounts to US$10 billion and will be invested in China, the UAE and third-party markets.
"It is a new type of measure with a vision of the future. ... The programme generally eyes energy, infrastructure and high-end sectors," Deng said.
Deng said the two countries have also agreed to boost visa services and to recognise each other's driving licenses.
During the talks, Xi also said China was ready to hold discussions with the UAE on exploring third-party co-operation in Africa.
Xue Qingguo, a professor of Arab studies at Beijing Foreign Studies University, said that although the UAE is a small country, "China will learn a lot about investing and exploring foreign markets through cooperating with the UAE, and from its financial expertise".
Such teamwork with the UAE is "significant ... to boost China's relationship with the whole Arab community", Xue said.
It will also benefit China's ties with economies along the route of the Silk Road Economic Belt and the 21st Century Maritime Silk Road, as the UAE stands at a "pivotal point" for both strategies, Xue added.
Also on Monday, China's central bank extended a currency swap agreement with the UAE central bank. The agreement is worth 35 billion yuan (S$7.6 billion) and will last for three years.