India ‘to stay world’s fastest-growing economy, despite headwinds’

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The Indian economy is seeing ‘a speedy rebound’ on account of strong economic foundation, and that the country will continue to remain the fastest growing economy in the world, India’s Finance Minister Nirmala Sitharaman has said.

Speaking in the general discussion on the recent Union Budget, Sitharaman said the Budget has come at a time of “immense uncertainties and the changed global macro environment makes it challenging”.

She said: “There are issues which are of global concern which also have an impact on our own budget making. There is a continuation of global conflict in the Middle East, Russia-Ukraine war continues, stagnation in global GDP and sticky inflation in the emerging markets are all vitiating the atmosphere in entire developing economies.

“In three years prior to 2024-25, the GDP growth rate averaged about 8%. Only in two of the last 12 quarters has growth rate touched 5.4% or remains below it… on account of strong economic foundation, a speedy rebound is happening and we will take measures to keep our economy growing fastest as in the last few years,” she said.

When questioned about unemployment, Sitharaman cited data from the annual report of Periodic Labour Force Survey 2023-24 that said the Labour Force Participation Rate has increased from 49.8% in 2017-18 to 60% in 2023-24 and the unemployment rate has declined from 6% in 2017-18 to 3.2% in 2023-24.

She said private final consumption expenditure is expected to grow 7.3% in the current fiscal, driven by good rural demand. The private final consumption expenditure is estimated to be 61.8% of the nominal GDP, the highest since 2002-2003, she said.

Underlining that the Goods and Services Tax (GST) “has not been increased on even one item”, Sitharaman said that the GST Council was working to see where rate cuts were possible.

“The GST Council has gone into great detail looking item by item to see where rate reduction can happen and, equally, four rates or three rates or two rates or collapse into one rate is also being discussed,” she said.

The Finance Minister added: “At the point of GST’s introduction, on average, 15.8% tax could have been levied without additionally burdening the consumer. If that was the rate at which the GST rates were brought in, today, the rate has come down to 11.3%.”

 

New Income Tax Bill to come into force

The Union Cabinet, chaired by Prime Minister Narendra Modi, has approved the New Income Tax Bill announced in the recent Budget, which will replace the six decades old Income-tax Act, 1961.

The new bill seeks to make direct tax law simple to understand and not to impose any new tax burden. It will not have provisos and explanations or long sentences, the government said.

Finance Minister Nirmala Sitharaman had first announced a comprehensive review of the Income-tax Act, 1961 in July 2024 Budget.

India’s Central Board for Direct Taxes (CBDT) had set up an internal committee to oversee the review and make the Act concise, clear and easy to understand, which will reduce disputes, litigations, and provide greater tax certainty to taxpayers. Also, 22 specialised sub-committees have been established to review the various aspects of the Income Tax Act.

Public inputs and suggestions were invited in four categories – simplification of language, litigation reduction, compliance reduction, and redundant/obsolete provisions.

The income tax department has received 6,500 suggestions from stakeholders on review of the Income Tax Act.

After it is tabled in Parliament, the new bill will be referred to a Parliamentary standing committee on finance for further consultation.

The new law is expected to be around half the size of the current law, with 25%-30% fewer provisions.

New measures aim to boost foreign investment in China

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The Chinese government has unveiled a plan to stabilise foreign investment this year, which analysts say signals the country’s determination to achieve high-level opening-up in the face of rising global protectionism.

The plan, adopted at the State Council executive meeting chaired by Premier Li Qiang, outlined more practical and effective measures to both retain existing and attract new foreign investment because of the vital role that foreign-invested businesses play in terms of job creation, export stability and industrial upgrading.

In a statement, the government said China will fully implement its commitment to remove all market access restrictions for foreign investors in the manufacturing sector and expand the list of sectors encouraging foreign investment.

According to the plan, the country will encourage foreign enterprises to reinvest their capital within the Chinese market and participate more actively in equity investments. Meanwhile, steps will be taken toward optimizing the rules and regulations governing foreign mergers and acquisitions, as outlined in the plan.

Foreign enterprises will be treated on an equal footing with their Chinese counterparts in government procurement, according to the plan, which also put an emphasis on widening the financing options available to foreign-invested enterprises and strengthening intellectual property protection for them.

China will further open up its services sector, with a particular focus on accelerating pilot programs in key areas such as telecommunications, healthcare and education, said Li Yongjie, deputy international trade representative of the Ministry of Commerce.

The country is committed to aligning itself with high-standard international trade and economic rules while building a network of high-level opening-up platforms such as free trade zones as it aims to enhance its overall business environment, Li said.

A total of 59,080 new foreign-invested firms were established across China in 2024, an increase of 9.9% year-on-year, according to data from the ministry.

“These proactive opening-up policies stand in stark contrast with the intensifying investment restrictions tipped by certain economies, and have created a more welcoming and accessible environment for foreign enterprises — particularly small and medium-sized ones — looking to enter the Chinese market,” said Zhou Mi, a senior researcher at the Chinese Academy of International Trade and Economic Cooperation.

While the global economy grapples with sluggish demand, the sheer size of China’s consumer base, the nation’s rising middle class and growing purchasing power have presented a crucial lifeline for foreign enterprises navigating broader economic uncertainties, Zhou added.

 

Chinese economy expected to rebound 2025

The Chinese economy is expected to rebound in 2025 despite new variables, according to Guan Tao, global chief economist at BOCI China.

He said the unprecedented popularity of domestic travel and the emergence of DeepSeek AI model have boosted confidence in the Chinese economy, as well as creating positive expectations for the future.

Guan said the country plans to further boost consumption among urban residents. Data show that the median nominal per capita disposable income of urban residents grew 4.65% on average between 2020 to 2024.

Furthermore, China needs to promote a new type of urbanization and comprehensive rural revitalization in a co-ordinated manner, promote the integrated development of urban and rural areas, and further stimulate rural consumption potential, he said.

The economist said China’s economic policy focuses have shifted to benefiting people’s livelihood and promoting consumption.

Recently, the government has pre-delivered 81 billion yuan ($11.09 billion) of funds for consumer goods trade-in in 2025 to support local governments in the continuous implementation of the policy.

Moreover, China launched an action plan to promote large-scale equipment renewal and trade-in of consumer goods in March 2024 as part of efforts to boost domestic demand and support economic growth, Guan added.

New initiative aims to support UAE’s female entrepreneurs

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A new initiative designed to help aspiring and established female entrepreneurs to connect, learn and grow has been launched in the UAE.

Launched in February, DXB Female Founders (DFF) will run monthly events dedicated to empowering women entrepreneurs in the UAE. The events will feature interactive workshops, expert-led sessions and inspiring stories designed to equip women with the essential skills and knowledge to succeed in business.

The inaugural event on 12 February highlighted ‘Founder Stories’, featuring Saba Yussouf, General Partner of Nettle Ventures. A successful entrepreneur, she sold her first company at 24 for £2 million and now leads a $60 million biotech firm.

She shared key insights on investor readiness, what investors look for and how founders can better prepare for funding.

Another speaker featured at the event also featured Marisa Peer, a best-selling author. Her talk focused on overcoming limiting beliefs, building self-confidence, and achieving entrepreneurial success.

The events series is sponsored by Google Cloud. Faranak Farahmand Pour, Director of Global Strategic Initiatives at Google Cloud, said: “Through our support of the DXB Female Founders event series, we aim to help unlock the immense potential of female talent in this region and contribute to the UAE’s ambitious goals for economic growth and technological advancement.”

Nicki Bedford, Founder & CEO of DXB Female Founders, added: “DXB Female Founders is dedicated to providing women entrepreneurs with the tools, knowledge, and network they need to succeed – while being surrounded by a supportive community of women who genuinely want to see each other succeed.

“Our monthly series offers practical workshops, mentorship opportunities, and a supportive community to help women overcome challenges, scale their businesses, and achieve their full potential.”

Bedford said that by equipping women with essential skills, fostering valuable connections, and providing access to experienced mentors through the DFF network, initiative aims to fuel the growth of the UAE’s entrepreneurial ecosystem.

The series directly aligns with the nation’s ambitions for technological leadership, economic diversification, and fostering a culture of innovation, she said.

Bedford added: “We are incredibly grateful for Google Cloud’s sponsorship and their commitment to empowering women in tech. Their support will enable us to reach more women and provide them with unparalleled access to resources and expertise.

“The DXB Female Founders series is more than just an event; it’s a strategic incubator for ideas, collaboration and leadership development, designed specifically for the UAE’s burgeoning entrepreneurial community.”

 

UAE launches cybersecurity strategy

The UAE’s National Cybersecurity Strategy was officially unveiled at the World Government Summit (WGS) 2025 in Dubai earlier in February.

Launching the initiative, Mohamed Al Kuwaiti, Head of the Cyber Security Council (CSC), said the strategy was part of the UAE’s efforts to keep pace with major and rapid transformations across various sectors, particularly in advanced technology, further cementing the country’s position in artificial intelligence and the digital economy.

Al Kuwaiti said that the recently approved five-year National Cybersecurity Strategy, endorsed by the UAE Cabinet, is built around five key pillars.

These pillars are designed to enable the safe and rapid adoption of innovations while ensuring a secure, resilient, and robust digital environment.

He further highlighted that the strategy includes specific goals and initiatives aimed at strengthening and growing the national economy, in addition to protecting critical infrastructure.

He noted that global losses from cyberattacks, cyber warfare, and cyberterrorism were estimated at around $10tn in 2024, underscoring the UAE’s early recognition of the need to enhance its cybersecurity framework in line with global best practices.

To this end, the UAE has invested over $2bn in cybersecurity and digital transformation.

Al Kuwaiti also revealed that the Cybersecurity Council is currently finalising several policies, including a cryptography policy, which will be implemented in the first quarter of 2025.

Additionally, the council is working on new cybersecurity standards to enhance institutional compliance and security measures.

Almost 90% of Malaysian firms experience cyber crime

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Protecting their IT networks was the key concern for Malaysian businesses in 2024 when it came to cybercrime, according to the latest Kaspersky IT Security Economics report.

Some 88% of businesses experienced attempts to infiltrate their network, while over 60% of companies reported incidents where bad actors executed malicious code within their network or attempted to communicate with compromised systems and take control.

Large enterprises experienced the highest rate of network security incidents, despite having the most comprehensive protection measures in place. Small and medium-sized companies also faced challenges with network security, with a significant percentage of incidents attributed to the deliberate or inadvertent actions of their own employees.

The Kaspersky IT Security Economics report said that network security threats aim to exploit system vulnerabilities by penetrating company networks and stealing or inflicting damage to sensitive data, applications and workloads.

The report said: “When a cybercriminal detects a weak spot in the system, they use it to gain unauthorized access and install malware, spyware, or other harmful software. These weak spots are also a gateway for social engineering attacks, where individuals become an easier target.

“As more and more data is created, stored and transmitted electronically, the potential for cyber attacks to compromise sensitive information is also increasing. One of the key factors contributing to the ongoing prevalence of network security issues is the growing complexity of cyber threats. “Cybercriminals are constantly developing new tactics and techniques to bypass traditional security measures, making it challenging for businesses to stay ahead of the curve. From phishing scams and ransomware attacks to DDoS attacks and APTs, there are numerous ways in which cyber criminals can exploit vulnerabilities in a company’s network.”

It added: “Furthermore, the rise of remote work and BYOD (bring your own device) policies has created additional challenges for network security. With employees accessing company data from various locations and devices, the potential for security breaches is heightened. This, combined with the lack of proper security protocols and employee training, creates a vulnerable environment for cyber attacks to occur.”

The Kaspersky IT Security Economics report also said that human error is another key factor contributing to security incidents. It said 42% of companies reported incidents where their own employees consciously or unconsciously helped adversaries by their action or inaction, with the majority of these occurrences in medium and small businesses.

It commented: “Mistakes or negligence by employees, whether due to a lack of security awareness or insufficient training, are leading causes of cyber breaches and data leaks in organisations.

“Phishing attacks, where employees unwittingly click on malicious links or provide sensitive information to scammers, are a common threat. Insider threats, where employees intentionally or unintentionally leak confidential data, can also pose a significant risk to a company’s security.

“The consequences of employee negligence in cyber security can be severe as data breaches often result in financial loss, damage to a company’s reputation, and legal repercussions. In extreme cases, companies may face fines and legal action for failing to adequately protect sensitive information.”

SMBs are often more vulnerable to data breaches caused by their own employees than large corporations which have more resources to invest in robust cyber security measures and employee training. Small and medium-sized companies may lack the necessary infrastructure and awareness to adequately protect their sensitive information, making them an easy target for cyber criminals looking to exploit weak links in the security chain.

The report concluded that to mitigate the risk of cyber attacks caused by human error, companies must take steps to raise awareness among employees about cyber threats and invest in comprehensive cyber security training programmes.

It said: “Regular security audits and monitoring can help identify vulnerabilities and address them before they are exploited by cyber criminals. While specialized solutions such as those provided as part of the Kaspersky Next product line can protect a company’s assets with real-time protection, threat visibility, investigation and response capabilities of EDR and XDR for organisations of any size and industry.

“Ultimately, a combination of technological solutions and proactive employee education is essential in safeguarding a company’s data and reputation in the digital landscape.”

Budget 2025 tax cuts ‘will boost demand and consumption’

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The Union Budget 2026 will boost growth over the next few years by increasing domestic demand through tax cuts for households, according to leading credit rating agencies.

India’s Finance Minister, Nirmala Sitharaman, presented the Union Budget for 2025-26 on February 1 in Parliament.

The Budget introduced significant reforms, including the removal of income tax liability for individuals earning up to R 1.2 million annually (£11,000), excluding special income. Additionally, the budget outlines reforms aimed at supporting start-ups and MSMEs, alongside a focus on key sectors for manufacturing growth.

S&P Global Ratings said it expects India will hit its deficit targets despite revenue loss from lifting the threshold for minimum taxable income and slower economic growth.

And, in its report on the Budget, Moody’s Ratings said the foregone revenue due to tax cuts would slow the pace of the country’s fiscal consolidation, even as total spending declines as a share of gross domestic product (GDP). It noted that tax measures will bolster middle-class spending power and consumption.

Meanwhile, Fitch Ratings said the Budget would be broadly neutral for growth and continued to project real GDP expansion of 6.4% in FY25 and 6.5% in FY26. Tax cuts, Fitch Ratings said, may provide a modest consumption boost.

S&P said the slower growth in capital investments for FY26 does not suggest a deterioration in the quality of government spending. “India’s Union Budget remains in line with our expectation of gradual fiscal consolidation… We believe bottlenecks in executing infrastructure projects will ease as supply chain pressures lessen and general elections are over,” S&P said in a press statement.

The agency said the Budget allocation for capital expenditure is 3.1% of GDP, unchanged from last financial year, an increase of 10% year-on-year in absolute terms.

S&P has projected that, combined with central government deficits that may trend down to 4.2% of GDP by FY28, the general government fiscal deficit could gradually decrease to 6.8% of GDP from 7.8% in FY25.

Highlighting that the Budget promotes private and state investments in infrastructure and energy transition, Moody’s Ratings said the boost to spending due to rising disposable income would benefit makers of two-wheelers, passenger vehicles and white goods, and ride-hailing service providers.

“The latest Budget signals a slowing pace of fiscal consolidation, as the government seeks to provide firmer support for economic growth amid a dampened macroeconomic backdrop compared with recent years. Still, we expect the government is within reach of its near-term deficit target of 4.5% by FY26,” Moody’s Ratings said.

Focus on smaller businesses

When presenting the Budget, Finance Minister Sitharaman said MSMEs contribute nearly 45% to India’s exports, making them a vital component of economic growth.

She also unveiled a new scheme targeting 500,000 first-time entrepreneurs from Scheduled Castes, Scheduled Tribes, and women that will provide term loans of up to R 20 million over the next five years. Additionally, the National Manufacturing Mission will drive the ‘Make in India’ initiative by integrating small, medium, and large industries into the global value chain, with a special focus on making India a global hub for toy manufacturing. The mission also has a mandate to focus on clean tech manufacturing for climate-friendly development and facilitating a future-ready workforce for in-demand jobs.

Investment was also a central theme in the Budget, categorized into three key areas—people, economy, and innovation. Regarding investment in people, the finance minister announced:

  • Broadband connectivity for all government secondary schools and primary health centres in rural areas.
  • Five National Centres of Excellence for Skilling with global expertise to equip young people careers in ther manufacturing and technology sectors.
  • The setting up of a R 5 billion Centre of Excellence in Artificial Intelligence for educational purposes.
  • A structured initiative to provide gig workers with identity cards and healthcare coverage.

On investment in the economy she announced:

  • R 1.5 trillion interest-free loans to states for capital expenditure.
  • The second Asset Monetization Plan (2025-30), to reinvest R 10 trillion into new projects.
  • An Urban Challenge Fund of R 1 trillion for urban redevelopment and water sanitation projects.

For investment in innovation it was announced that:

  • R 200 billion will allocated to private sector-driven R&D initiatives.
  • A National Geospatial Mission will support urban planning.
  • The Gyan Bharatam Mission will survey, document and conserve over 10 million manuscripts, alongside a National Digital Repository of Indian knowledge systems.

China looking to strengthen economic ties with EU

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Strengthening China-European Union economic co-operation has become crucial for worldwide economic growth, as the United States’ tariff hikes against key trading partners have cast a shadow over the global economy, senior Chinese trade experts have said.

They emphasized that amid growing global trade protectionism, the Chinese and EU’s free trade ethos provide a solid basis for deeper bilateral economic and trade collaboration.

Zhang Yansheng, a researcher at the Chinese Academy of Macroeconomic Research, said the EU economy has advantages in high-end manufacturing, green technology and services trade, while China excels in digital infrastructure and smart manufacturing, and has a vast domestic market.

By creating platforms such as industrial co-operation parks and joint innovation funds, the two sides can create concrete projects, creating a roadmap for them to build a new economic and trade partnership, Zhang said.

“With the transformation and upgrading of China’s manufacturing industry, the competition between China and the EU in economic and trade development has intensified,” Zhang said.

“However, as they both face external challenges like rising protectionism and geopolitical uncertainties, the two economies are expected to forge closer economic ties based on complementary competition, thereby achieving a win-win situation,” Zhang added.

Zhou Mi, a senior researcher at the Chinese Academy of International Trade and Economic Cooperation, said the potential for collaboration between China and the EU is enhanced by their complementary markets and shared need for resource optimization.

He said he expects more co-operation between the two sides to boost collaboration by enterprises, drive innovation and improve the allocation of market resources.

“By doing such things, China and the EU could generate significant economic and social benefits, boost employment and enhance supply chain security for both,” said Zhou, whose academy is affiliated with China’s Ministry of Commerce (MOC).

China remains the EU’s largest import source and third-largest export destination, according to European statistics. Moreover, China’s outbound direct investment inflows to the EU grew from €6.27 billion ($6.43 billion) in 2020 to €8.06 billion euros in 2023.

Zhang, from the Chinese Academy of Macroeconomic Research, said that co-operation potential between China and the EU spans three key areas: green transformation, digital development and third-party market growth.

The two economies could build a joint carbon-neutral laboratory focusing on clean technology collaboration, recognize each other’s cross-border e-commerce standards, and build dialogue mechanisms for co-operation in frontier areas like data flow and artificial intelligence ethics, he said.

According to Zhou, from the Chinese Academy of International Trade and Economic Cooperation, China and the EU should focus in the short term on reviewing and strengthening existing supply chain co-operation by reducing trade barriers and increasing investment opportunities and the mobility of personnel.

Long-term strategies should aim for more effective market integration through reduced tariffs, increased consultation mechanisms and enhanced collaboration on innovation, he added.

China sees growth in trade in services in 2024

China’s annual trade in services exceeded one trillion US dollars for the first time last year, demonstrating significant potential for further growth, according to the latest data from the Ministry of Commerce (MOC).

And the country’s services import and export value amounted to a record-high of 7.5 trillion yuan (about $1.05 trillion) in 2024, expanding 14.4% year on year, the ministry said. Exports grew 18.2% year on year and imports grew 11.8%, according to the MOC.

Driven by the global trends of digitisation, smart technology advancement and green development, China’s trade in services grew in scale and its international competitiveness was enhanced in 2024, said Li Jun, a researcher at the Chinese Academy of International Trade and Economic Cooperation under the MOC.

He added that “the comprehensive relaxation and optimization of China’s visa-free transit policy has played a role in boosting inbound tourism over the last year”.

The Chinese government released a guideline on promoting the high-quality development of trade in services through high-standard opening-up in August last year.

The document offers robust policy support for the development of China’s services trade, Li said, calling for more efforts to advance opening-up, innovation and international cooperation in the sector.

Bilateral, multilateral and regional collaboration in digital trade and trade in services should be expanded, Li said, suggesting that the role of major exhibition platforms should continue to be leveraged, and that international services trade co-operation parks should be developed.

Indian economy ‘to be a little weaker’ in 2025, IMF warns

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Growth in India’s economy is set to slow in 2025, the country’s National Statistics Office (NSO) said in a statement announcing it was lowering its projection to 6.4% from 8.2% growth it predicted in 2023-24.

The NSO’s figures are supported by the latest research from the International Monetary Fund (IMF). In the IMF report, managing director, Kristalina Georgieva said that the Indian economy is expected to be “a little weaker” this year, with an overall steady global growth rate but with a “regional divergence”.

“The US is doing quite a bit better than we expected before, the EU is somewhat stalling, and India is a little weaker,” she said at her annual media round-table at the start of January.

Georgieva added: “What we expect in 2025 is to have quite a lot of uncertainty, especially in terms of economic policies. Not surprisingly, given the size and role of the US economy, there is keen interest globally in the policy directions of the incoming administration, in particular on tariffs, taxes, deregulation and government efficiency.”

US President-elect Donald Trump announced plans to impose additional tariffs on China, Canada and Mexico even before he started his second presidency.

Georgieva said: “This uncertainty is particularly high around the path for trade policy going forward, adding to the headwinds facing the global economy, especially for countries and regions that are more integrated in global supply chains, medium-sized economies, (and) Asia as a region.” She added that the precariousness will be expressed globally through higher long-term interest rates despite declining short-term interest rates.

“As we all recognise, the higher interest rates that were necessary to fight inflation did not push the world economy into recession. They have delivered the desired results. Headline inflation is converging back to target sooner in advanced economies than in emerging markets,” she said.

AI likely to feature strongly in Budget 2025-2026

Artificial intelligence (AI) is likely to be a key focal point in Union Budget 2025-2026, Cabinet sources have told Business Today TV. The insider said the government expected to make a ‘special mention’ of India’s AI capabilities.

In March 2024, the Cabinet approved an allocation of over Rs 10,300 crore (£972,000) for the India AI Mission. This financial investment, spread over the next five years, aims to drive various components of the India AI Mission, including initiatives such as the India AI Compute Capacity, India AI Innovation Centre (IAIC), India AI Datasets Platform, India AI Application Development Initiative, India AI Future Skills, India AI Startup Financing, and Safe & Trusted AI.

The government source also indicated that there could be a specific mention of ‘AI skilling programmes’, developed collaboratively by the Ministry of Finance and the Ministry of Electronics and Information Technology (MEITY). Additionally, there is a proposal from the industry for up to 20% increase in the allocation for the India AI Mission, reflecting the growing demand for AI technology across sectors in India.

Business TV Today was also told that MEITY has proposed the creation of AI innovation hubs and dedicated clusters in major cities to foster entrepreneurship and innovation. In the longer term, the government may also prioritize the integration of AI into public governance systems, including traffic management and disaster response, while introducing a national policy framework to address ethical AI usage, data privacy and intellectual property concerns.

In the lead-up to the Budget, Prime Minister Narendra Modi also engaged with global tech leaders, including Microsoft CEO Satya Nadella, to explore opportunities and emphasize a human-centric approach to AI.

India’s growing focus on AI comes at a pivotal time when global economies are heavily investing in this transformative technology, projected to contribute £12.8 trillion to the global economy by 2030.

‘Strengthened co-operation’ set to boost China–UK trade

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The Chinese government is looking to explore new opportunities to trade with the UK, following the conclusions of the two countries’ recent trade talks in China.

The China-UK Economic and Financial Dialogue held earlier in January were designed to further strengthen collaboration with the United Kingdom and achieve higher level mutual benefits, according to official sources.

The talks took place between delegates headed up by the UK’s Chancellor of the Exchequer, Rachel Reeves, and Chinese Vice-Premier He Lifeng.

“Through continuous efforts in deepening the interconnection of financial markets between Shanghai and the UK, Shanghai is set to carry out more scientific research exchanges among universities and research institutions, as well as strengthen innovation cooperation in areas including digital economy and artificial intelligence,” Gong Zheng, mayor of Shanghai, said during his meeting with Reeves.

The joint efforts in achieving high-quality development are expected to benefit the well-being of people both in Shanghai and the UK, Gong added.

Reeves said Shanghai played an important role in collaboration between China and the UK, with two-thirds of British companies choosing Shanghai to establish their China headquarters.

“It is believed that both Shanghai and London would benefit from the two countries’ strengthened co-operation in the capital market connectivity, the development of British financial institutions in China, and the deepened collaboration in green finance,” said the UK Chancellor.

According to Gong, Shanghai is an important bridge of exchanges and co-operation between China and UK, two of the world’s major economies.

“We look forward to strengthening economic and trade exchanges, industrial investment, financial opening-up and technological innovation cooperation between the two sides, and warmly welcome British companies to participate in this year’s CIIE (China International Import Expo) and expand their investment in Shanghai in the fields including clean energy, advanced manufacturing, medical and health care, among others,” Gong said.

Reeves said the China-UK Economic and Financial Dialogue has achieved fruitful results. Looking forward, more cooperation will be conducted in more areas to catapult the bi-lateral collaboration to a higher level, said Reeves.

Jose Vinals, group chairman of UK-based banking group Standard Chartered, commented: “It is very important that after five years this dialogue between the UK and the Chinese government is resuming, because the world needs China, and China needs the world. I think that the UK is an excellent partner for the continuing integration of China with the rest of the world.

“At a time when we were all concerned about the potential for further fragmentation in the global trade and investment order, I think it’s very important that two countries, which think alike in terms of the relevance of open trade and open investment and financial connectivity, get together in order to foster this important cause,” said Vinals.

Vinals believes China and the UK have great similarities in this approach to open trade, investment and finance and can complement well each other.

“China is the second-largest economy in the world, is a very thriving, innovative, technologically advanced economy. And the UK, it’s a financial powerhouse, a leading international financial centre with tremendous innovation as well important technology innovated sector. I think that by joining forces and complementing each other, this is helping to achieve both countries important outcomes going forward,” he said.

According to the UK government policy paper on the UK-China Economic and Financial Dialogue, both sides believe that as permanent members of the UN Security Council, leading economies and financial powers, there is mutual benefit and strategic importance to maintain a durable, stable and respectful relationship.

SMEs’ performance improves in last quarter of 2024

China’s small and medium-sized enterprises (SMEs) saw improved business performances between October and December 2024, according to a report from the China Association of Small and Medium Enterprises published recently.

The Small and Medium Enterprises Development Index, based on a survey of 3,000 SMEs across eight major industries, stood at 89.0 in the fourth quarter of last year, 0.1 points higher than in the third quarter.

The index also contains multiple sub-indexes to gauge the performances and expectations of SMEs.

The sub-indexes for industrial production, construction and transportation all showed improvement, while the sub-index measuring SMEs’ confidence in the macroeconomy remained stable compared to the third quarter, according to the report.

China’s SMEs saw a gradual improvement in both confidence and market demand, leading to a surge in development vitality, according to the association.

It emphasised the importance of expanding demand and boosting consumption in future efforts, while also calling for creating more opportunities and room for the development of SMEs.

Start-up funding in UAE set to rocket in 2025

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This year is predicted to be a break-out year for start-up funding in the UAE, which expected to easily outstrip the estimated $2 billion raised by the sector in 2024 – which itself is estimated to have tripled from the previous year’s figure.

Experts say that on the back rising investor confidence amidst stability and growth in the sector in the region, artificial intelligence, fintech, climate tech and health tech are expected to dominate the funding landscape in the region. AI, especially generative AI, is expected to be hugely attractive to investors.

“In regions like the UAE and GCC (Gulf Cooperation Council), investor confidence is on the rise, reflecting the growing potential of Middle Eastern markets. This upward trend underscores the resilience of these markets and the continued opportunities for start-ups to expand and thrive in 2025,” said Deepak Ahuja, CEO and Co-founder of iAccel Gulf Business Incubator (iAccel GBI), which helps early-stage tech start-ups grow in the Middle East. The firm is a partner of Dubai SME.

“While 2024 saw a recalibration in start-up funding, 2025 is expected to bring more stability and growth,” he predicted.

Ahuja told the Arabian Business website that both global and MENA funding are projected to increase, with a strong emphasis on later-stage investments in the current year.

He added that 2025 is also expected to witness major changes in investor preferences, with impact-driven investing – particularly in climate and inclusion-focused start-ups – gaining more traction this year.

Ahuja said the UAE’s start-up ecosystem is soaring, attracting start-ups from over 70 nationalities. “The UAE thrives on world-class infrastructure, investor-friendly policies, and strategic market access,” he said.

Ahuja, whose iAccel GBI has been instrumental in positioning the UAE as a global gateway in sectors like AI, sustainability and fintech, said the UAE’s transformation into a global hub for start-ups is evident not only in the diversity of its entrepreneurial base, but also in its ability to attract businesses from Europe, Asia, and Africa seeking to establish and scale operations in the MENA region.

Tech industry to see record growth

The UAE’s technology industry is set to achieve record growth in 2025, driven by significant expansion in digital innovation and the adoption of cutting-edge technologies.

According to a new report by Statista, revenues from the technology services market in the UAE are likely to increase by around $3bn in 2025.

The company’s report emphasised that this projected growth reflects the UAE’s continued progress in developing its tech sector and increasing reliance on digital services.

It also predicts a stable annual growth rate of 6.24% from 2025 to 2029, which will raise the market size to £3.9bn by the end of the forecast period.

Statista said the UAE has strengthened its position on the global map as an innovation-driven environment and an exceptional destination for the expansion of both global and emerging tech companies.

This has been made possible through its sustainable investments in digital infrastructure development and the establishment of supportive regulations and policies that create a favourable climate for innovation and growth.

Its report predict that the tech sector will continue to grow in areas such as artificial intelligence (AI), cloud computing, and emerging technologies like blockchain and the Internet of Things.

Officials from various emerging tech companies told the Emirates News Agency (WAM) that the UAE is a key attraction for these businesses, owing to its advanced infrastructure and supportive business environment.

Harsh Sajnani, CEO of Kingpin, stated that the UAE, and particularly Abu Dhabi, is “a beacon for start-ups due to its world-class infrastructure”. This facilitates the growth and success of such companies and encourages them to expand globally with ground-breaking technological innovations, he said.

He added that the UAE offers a competitive environment for companies across various sectors, including technology, thanks to the rapid digital transformation and the growing tech industry.

This supports companies in adopting advanced technologies to enhance their operational efficiency and competitiveness.

Meanwhile, Alex Zito, Strategic COO of CapeCade, said the company is transitioning its operations to the UAE to expand its business due to the promising opportunities and significant government support that helps companies thrive.

He added that the company views Abu Dhabi as an ideal environment to transform its current regional user base into long-term clients, as it provides a comprehensive ecosystem that supports the objectives of both start-ups and investors alike.

PM: Malaysia must reform to face emerging challenges

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Malaysia cannot rely on outdated legislation to address the challenges posed by rapid technological developments and must pursue reforms to create greater opportunities for international collaboration, Prime Minister Anwar Ibrahim told delegates at the World Economic Forum (WEF).

During a media briefing on ‘Unlocking Asean’s Digital Future: Driving Inclusive Growth and Global Competitiveness’ in Davos, the prime minister underscored the government’s commitment to ensuring that legislation keeps pace with global developments.

“We take all the latest pieces of legislation all over the world and adjust accordingly, and push through,” he said, adding that there was an “array of things that we need to do to give meaning to effective collaboration and clarity of policies, and effective fast-paced implementation”.

When asked about unlocking Asean’s full potential as chairman for this year, Anwar said all member leaders must continue to implement specific policies to address the rapid advancement of new technology.

He said it was important that all parties involved acknowledged the challenges created by these new technologies. “We don’t have all the answers, and therefore, the collaboration must begin with the key players, including companies, and states,” he said. This includes fostering an ecosystem encompassing airports, ports, infrastructure, centres of excellence, research, and partnerships with universities.

He noted that collaboration among Asean leaders must extend to the private sector, as technological progress demands that governments and ruling elites recognise their limitations, and adopt a cooperative approach to succeed.

Anwar led the Malaysian delegation on a three-day working visit to attend the WEF Annual Summit 2025 in Switzerland – his first participation in the WEF since assuming office in 2022.

The theme for this year’s event was ‘Collaboration for the Intelligent Age’, and among the many issues discussed were the role and contribution of emerging technologies, and the latest innovations in addressing global economic issues.

Free trade agreements ‘need to encompass digitalisation’

In a separate session at the WEF, PM Anwar Ibrahim said digitalisation is a “missing component” in all of Malaysia’s previous free trade agreements (FTAs).

Stressing that digital transformation is one of the priorities that Asean is aggressively embarking, he said Malaysia, which is currently looking at upgrading some of the existing free trade agreements (FTAs), is also looking at digitalisation as part of the upgrade.

“We have just signed last week with the United Arab Emirates, and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) with the United Kingdom. And now we want to have a fast track with the European Union through the Malaysia-EU Free Trade Agreement (MEUFTA).

“A very important component that was missing in all the previous FTAs is of course digitalisation,” he said.

Anwar, who is also Malaysia’s Finance Minister, said that on the digital transformation within Asean, AI driven connectivity needs to take into consideration difference in service standards for those in urban centres compared with less developed areas.

“Our commitment is to make sure that this sort of transmission (Asean Power Grid or APG) and also the transformation of digitalisation would cover all areas and angles.

“If these two priorities are achieved, I think it would be a phenomenal feat for Asean as a region because as, as you know, it is relatively the most peaceful region in the world and the fastest growing economy. But we have not given emphasis to substantive economic or technological collaboration,” he said.

Anwar also expressed confidence that the consensus that have been achieved among Asean leaders, signify a very important radical departure from the conventional view of Asean leaders in the past.

Apart from that, the prime minister also pointed out the importance of private sectors coming together through collaborations in digitalisation to fast forward the initiative among member countries.