With the withdrawal of the United States from Afghanistan and the decline of its influence in the Middle East, China is increasing its military presence in the oil-rich region.
The latest satellite images showed that China is building a multi-storey military facility in the UAE's Khalifa Port, which is a major concern for India and the United States.
The UAE government claimed its ignorance of the case and defended it saying that it was not aware of the building in the port that was built and operated by the Chinese shipping company COSCO.
Although construction work has now apparently come to a halt, following a US warning, Indian intelligence agencies have stated that this is just the tip of the iceberg and that the Chinese have made deals not only with the UAE but with other countries, including Afghanistan, in the region. "Their only interest is to reap diminishing US influence," one source said.
Through the Belt and Road Initiative, the UAE is a regional hub for Chinese investments. The UAE is the most important trading partner in the Middle East and is responsible for 28 percent of China's non-oil trade with the Middle East. More than 200,000 Chinese citizens live and invest in the Gulf state.
Beijing has traditionally considered direct military intervention abroad as a last resort, but reports of the alleged military base in the UAE may suggest that the People's Liberation Army (PLA) may be willing to stand up to the US military in the Gulf.
A source said: "While China's confidence and ambition increases about realizing the Chinese dream of achieving a "national renaissance", it believes that it naturally needs to seek global power and global influence to keep pace with its increasing economic presence in the world."
Security analysts point out that such construction would continue to illustrate China's soft power projections abroad — a perception similar to Beijing's logistics base in Djibouti.
A security analyst stated that "any plan to deploy strategic forces by China in a Gulf base would be futile because it would be surrounded by a complex network of the largest and most advanced US military bases on all fronts."
But the biggest dilemma that Chinese decision-makers face is domestic — one that arises from rising nationalism at home, as China's interests grow exponentially abroad.