Dubai’s Departure from Strategic Neutrality

For decades, Dubai’s greatest strength was not oil, military power, or ideology. Its success rested on something far more valuable - strategic neutrality. Long before the Abraham Accords, Dubai had developed deep commercial relations with Iran. Iranian traders, investors, and businesses contributed significantly to Dubai’s emergence as the Gulf’s financial and trading hub. Geography, commerce, and pragmatism kept the relationship functional despite periodic political tensions. That balance now appears dangerously fragile.

The recent regional escalation involving Israel, backed firmly by the United States, has fundamentally altered Gulf dynamics. Once confrontation expanded beyond rhetoric, countries hosting American military infrastructure inevitably became exposed to Iranian retaliation. The message from Tehran was unmistakable - no state facilitating strategic pressure against Iran can expect complete immunity from the consequences.

Dubai today faces a strategic contradiction. On one hand, closer ties with Israel promise access to advanced technology, intelligence cooperation, and stronger alignment with Western security interests. On the other hand, this growing partnership risks eroding the very foundations of Dubai’s economic model.

Global investors do not merely seek modern infrastructure or luxury skylines; they seek predictability and stability. Dubai’s ports, aviation industry, tourism sector, and re-export businesses all depend upon the perception that the emirate remains insulated from regional conflict. Persistent hostility with Iran threatens that perception.

The Gulf cannot afford a prolonged environment where trade routes remain vulnerable, energy corridors uncertain, and geopolitical tensions permanently elevated. Iran, despite sanctions and diplomatic isolation, remains a pivotal regional actor with influence over critical maritime routes and strategic leverage that cannot simply be ignored.

The real danger for Dubai is not military confrontation alone. It is the gradual loss of its carefully cultivated identity as a neutral gateway between competing powers. History shows that commercial centers flourish when they build bridges, not when they become extensions of geopolitical rivalries.

Dubai’s growing closeness with Israel may deliver short-term strategic gains, but if it destroys regional economic equilibrium, the long-term costs could far outweigh the immediate benefits.

Trump’s China Visit: Too Many Words, Too Little Substance

President Donald Trump’s visit to China was projected by much of the American media as a diplomatic breakthrough. In reality, the visit appeared heavy on rhetoric but short on meaningful strategic outcomes. Beneath the carefully managed optics, Washington’s policy contradictions remained fully visible.

The most obvious contradiction was economic. The United States continues efforts to disrupt the movement of Iranian crude oil to China while simultaneously expecting constructive engagement from Beijing. It is difficult to pressure a country’s energy interests and then seek cooperation on trade, regional security, and geopolitical stability. President Xi Jinping had little reason to offer major concessions under such circumstances.

The timing of renewed discussion around Taiwan also appeared questionable. Following the visible reduction of American naval activity in the South China Sea, reviving the Taiwan issue during the visit only reinforced Beijing’s long-standing concerns regarding Washington’s strategic intentions. For China, Taiwan is not a bargaining issue but a matter directly linked to sovereignty and national security.

Economic realities further exposed America’s declining leverage. Trump may have sought to promote exports from Boeing, yet Washington today offers far fewer incentives to Beijing than it once did. China has diversified its trade partnerships, expanded industrial self-reliance, and strengthened economic ties across Asia, Africa, and the Middle East. The global economic order is no longer dominated by a single power center.

Equally significant was the simultaneous meeting of foreign ministers from BRICS. The participation of Iran and the United Arab Emirates reflected the growing tendency among regional powers to diversify strategic relationships instead of relying exclusively on Washington.

Trump’s Beijing visit therefore highlighted a larger geopolitical reality. Media headlines may attempt to project diplomatic success, but symbolism alone cannot conceal the steady transition toward a more multipolar world where economic partnerships and strategic consistency increasingly matter more than political messaging.

PSX benchmark index sheds 3.23%WoW

Pakistan Stock Exchange (PSX) witnessed bearish momentum during this past week, with the benchmark Index shedding 5,520 points or 3.23%WoW to close at 166,596 on Friday, May 15, 2026. The average daily trading volume declined 6.3%WoW to 1.1 billion shares.

The key sentiment driver remained the escalating US-Iran conflict, with Brent crude hovering around US$106/ bbl throughout the week, amid blockade of Strait of Hormuz.

Trump termed Iran’s response to the US proposal “unacceptable”, though sentiments improved slightly towards the week-end after US Vice President signaled progress in talks. Pakistan’s mediation efforts drew support from both the US and China.

Pakistan received a US$1.3 billion IMF disbursement under the EFF and RSF programs following completion of the third EFF review and announcement of new performance criteria.

On the macro front, fiscal deficit narrowed to lowest ever of 0.7% of GDP or PKR856 billion in 9MFY26 as compared to 2.6% in same period last year.

Primary surplus rose 18%YoY to PKR4.1 trillion or 3.2% of GDP and petroleum levy collections increased 45%YoY to PKR1.2 trillion during 9MFY26.

In April 2026, Auto sales doubled to 22,000 units, remittances rose 11.4%YoY to US$3.5 billion, taking 10MFY26 inflows to US$33.9 billion, up 8.5%YoY

Foreign exchange reserves held by State Bank of Pakistan (SBP) edged up to US$15.87 billion as of May 08, 2026.

Provisional GDP growth was reported at 3.7% against a target of 4.2%, with per capita income increased to record high of US$1,901, economy size at US$452.1 billion, and public debt at PKR80.5 trillion as of March 2026.

Other major news flow during the week included: 1) Pakistan successfully launched its inaugural US$250 million Panda Bond in China's onshore capital market with 5x oversubscribed at the lowest ever rate of 2.5%, 2) Government aims to keep PKR425 billion in upcoming budget for unforeseen events, 3) Pakistan diverted gas to fertilizer plants amid Hormuz-related supply disruptions, while Qatari LNG cargoes continued arriving through special transit arrangements, 4) Government remains committed to abolishing PKR140 billion gas cross-subsidy by Jane 2027 under IMF structural benchmark, and 5) Pakistan imported 6 million barrels of US crude oil through Cnergyico for the first time.

Top performing sectors were: Leasing Companies, Leather & Tanneries, and Sugar & Allied Industries, while laggards included: Textile Weaving, Textile Composite, and Synthetic & Rayon.

Major selling was recorded by Mutual Funds and Companies of US$8.90 million and US$5.07 million respectively. Major net buyers were Individuals and Brokers with US$14.20 million and US$1.07 million, respectively.

Top performing scrips were: GADT, TRG, PGLC, KEL, and SRVI, while laggards included: KTML, PIOC, AICL, UBL, and FHAM.

Going forward, Iran-US negotiations and international oil price remain the key drivers in the near term, with any easing in Strait of Hormuz tensions serving as a key supportive trigger.

The recent IMF disbursement of US$1.3 billion under EFF and RSF programs, alongside Pakistan's landmark Panda Bond debut, reinforces the improving external financing outlook. Market continues to trade at attractive valuations.

The top picks of AKD Securities include: OGDC, PPL, UBL, MEBL, HBL, FFC, ENGROH, PSO, LUCK, FCCL, INDU, ILP and SYS.

Taiwan Most Contentious Issue in China-US Relations

This week, US President Donald Trump visited China for the first time in nearly nine years, and met with Chinese President Xi Jinping. The summit, held at the Great Hall of the People, lasted for more than two hours. While China staged a grand ceremony and both sides exchanged diplomatic pleasantries, the substance of the leaders' talks remained unclear, at least through Thursday.

Against this backdrop, major media outlets, including Nikkei Asia, have highlighted a "warning" made by Xi. According to a readout published by state news agency Xinhua, Xi told Trump that the Taiwan question is "the most important issue" in US-China ties. "If handled well, bilateral relations can maintain overall stability," Xi was quoted as saying. If "handled poorly," the two countries risk a "clash" that could push "the entire China-US relationship into a very dangerous situation."

The term "clash" is far from mild. Notably, the US readout after the meeting did not mention Taiwan. While China has sought to project this message as a "warning" to the world, the US appears to have sidestepped what Xi described as the "most important" issue in the relationship, leaving the talks sounding inconclusive.

Trump's visit to China was accompanied by prominent business leaders, including Apple CEO Tim Cook and Nvidia CEO Jensen Huang, a central figure in the AI boom, who joined the trip at the last minute. Despite bringing along some of the country's most influential executives, who also have great influence on Asia's technology supply chains, the visit has so far resulted in no notable tech business announcements.

US-China talks, which were expected to have significant global implications, appear to have ended in ambiguity. It appears that Xi, through his warning on Taiwan, delivered the headline-making message. Having said he will host Xi in the US ahead of the country's midterm elections, Trump will likely seek to claim more tangible outcomes when the second round of the summit is on his home turf.

Araghchi urges BRICS nations to condemn US-Israel aggression against Iran

Iranian foreign minister Abbas Araghchi on Thursday urged BRICS nations to condemn what he called violations of ‌international law by the United States and Israel, including "their illegal aggression" against his country.

His remarks at a two-day meeting in New Delhi underscore divisions within the expanded BRICS bloc, as the US-Israeli war on Iran casts a shadow over the gathering of foreign ministers.

Araghchi criticized Washington, describing the war as "illegal expansionism and warmongering," and said Iran remained open to diplomacy while being ready to defend itself "with ⁠all available means."

"Iran therefore calls upon BRICS member states and all responsible members of the international community to explicitly condemn violations of international law by the United States and Israel," he said.

The conflict, which began on February 28, has heightened geopolitical tensions and sparked a global energy crisis.

In his opening remarks, Indian Foreign Minister S. Jaishankar struck a cautious tone, avoiding direct criticism while stressing the importance of stability.

"The conflict in West Asia merits particular attention," Jaishankar said, without naming specific countries.

He said unimpeded maritime flows through international waterways, including the Strait of Hormuz ⁠and the Red Sea, were vital for global economic well-being.

He also flagged concerns over the growing use of unilateral sanctions, a longstanding point of contention among BRICS members.

"There is an increasing resort to unilateral ⁠coercive measures and sanctions inconsistent with international law and the UN Charter," he said. "Such measures disproportionately affect developing countries. These unjustifiable measures cannot substitute dialogue, nor can pressure replace diplomacy."

Jaishankar added that emerging economies expect BRICS to play a "constructive and stabilizing role" at a time of rising geopolitical fragmentation and economic uncertainty.

The grouping, originally comprising Brazil, Russia, India and China, was expanded to include South Africa in 2011, and more recently admitted Egypt, Ethiopia, Indonesia, Iran and the United Arab Emirates (UAE).

The expansion has boosted its global weight but also increased internal divergences on geopolitical issues. India holds the BRICS chair for 2026.

Iran's stance could make it difficult for BRICS — which operates by consensus — to agree on a joint statement, given the UAE’s presence on the opposing side.

Iran has launched numerous attacks on the UAE and other neighboring countries.

The effective closure of the Strait of Hormuz — a ‌critical artery ⁠that handles roughly a fifth of global oil shipments — has triggered one of the biggest supply disruptions in recent history.

The curbs on tanker traffic have pushed crude prices sharply higher, fuelling fears of renewed inflation, tighter financial conditions and a potential global economic slowdown, particularly for energy-importing economies such as India.

Separately, India's foreign ministry said on Thursday that an Indian-flagged ship was attacked off the coast of Oman on Wednesday and all crew on board were safe.

"The ⁠attack ... is unacceptable and we deplore the fact that commercial shipping and civilian mariners continue to be targeted."

However, two LPG tankers announcing India as their destination have crossed the Strait of Hormuz between Wednesday and Thursday, ship tracking data indicates.

The Marshall Islands-flagged Symi and Vietnam-flagged NV Sunshine are the first India-bound energy tankers to transit the fraught waters of the Strait of Hormuz in nearly two weeks. Both the LPG tankers have stated Gujarat’s Kandla port as their intended destination.

So far, 10 India-flagged vessels—nine LPG tankers and one crude oil tanker—have crossed the Strait of Hormuz since early March.

 

Trump: Diplomat, Opportunist, Hypocrite or Simply a Gambler?

The latest headline in Nikkei Asia — “Trump calls Xi ‘great leader,’ vows ties will be better than ever” — once again exposes the extraordinary contradictions that define the politics of US President, Donald Trump. Only recently, Trump had declared that the United States did not require Chinese cooperation to deal with a possible blockade of the Strait of Hormuz. At the same time, Washington continued tightening sanctions targeting the movement of Iranian oil to China while portraying Beijing as America’s principal strategic adversary.

The sudden shift in tone raises a serious question, who exactly is Donald Trump — a diplomat, an opportunist, a hypocrite, or simply a political gambler?

Diplomacy normally relies on consistency, credibility, and strategic clarity. Trump’s style appears fundamentally different. His statements often seem driven less by coherent long-term policy and more by immediate political or economic convenience. One-day China is accused of exploiting global trade, weakening American industry, and threatening international security. The next day, Xi Jinping is described as a “great leader” and bilateral relations are promised a bright future.

Such contradictions may energize domestic political audiences, but these simultaneously weaken America’s diplomatic credibility abroad. Allies struggle to understand Washington’s actual strategic direction, while rivals increasingly view American policy as transactional and unpredictable.

The contradiction becomes even sharper when examined alongside Trump’s broader policies. Sanctions on Chinese-linked Iranian oil trade, aggressive tariff rhetoric, restrictions on technology exports, and repeated efforts to economically isolate Beijing all reinforce the perception that Trump views China less as a business partner and more as a geopolitical foe. Yet whenever economic pressure begins unsettling American markets or threatening global supply chains, the rhetoric suddenly softens.

When a leader repeatedly alternates between portraying China as an existential threat and praising its leadership as indispensable, critics naturally begin questioning whether such statements reflect genuine policy or merely political convenience.

This is not classical diplomacy. It resembles high-stakes bargaining where confrontation and praise are alternated to maximize leverage. Trump appears convinced that unpredictability itself is a negotiating weapon. However, unpredictability may work in real estate deals; it becomes dangerous in global geopolitics.

Great powers can survive hostile rivals, but they struggle under inconsistent leadership. The real danger for America may not be China’s rise, but Washington’s inability to decide whether Beijing is an enemy to confront or a partner it ultimately cannot live without.

Trump Lost Before the Game Started

The recent visit of Donald Trump to China was presented as a major diplomatic engagement aimed at resetting communication between the world’s two largest economies. Yet, even before substantive discussions began, the visit exposed an uncomfortable geopolitical reality for Washington - the United States appeared to need China’s cooperation more than China needed American approval.

For years, Trump built his political narrative around confronting China. Tariffs, technology restrictions, sanctions, and economic pressure were all designed to slow Beijing’s rise and reinforce American dominance. However, global developments have revealed the limitations of pressure-driven diplomacy in an increasingly interconnected world.

The contradiction became particularly visible in the context of the Iran conflict. Senior American officials openly acknowledged that China possesses considerable leverage because of its close economic relationship with Tehran and its dependence on Iranian oil supplies. Washington’s indirect appeal for Beijing’s assistance in stabilizing the Strait of Hormuz was more than a diplomatic request; it was recognition that China has become an indispensable stakeholder in global crisis management.

Trade tensions further underline this strategic reversal. After years of tariff wars that disrupted supply chains and increased costs worldwide, both sides are now seeking mechanisms to preserve economic engagement. Discussions surrounding new trade and investment coordination frameworks suggest that confrontation alone failed to produce the decisive advantage Washington once expected.

At the same time, difficult issues remain unresolved. Differences over Taiwan, semiconductor restrictions, artificial intelligence, and human rights continue to shape relations between the two powers. Yet despite these disputes, the United States still finds itself compelled to engage Beijing on virtually every major global challenge.

This is where the symbolism of Trump’s visit becomes important. A leader who once projected China as an adversary to be economically isolated has now arrived seeking cooperation on trade stability, regional security, and technological governance. Diplomatically, the visit may produce positive optics. Strategically, it reflects a deeper shift in global politics.

Great powers can impose sanctions, launch tariff wars, and escalate rhetoric, but they cannot indefinitely ignore geopolitical realities. In today’s emerging multipolar order, influence increasingly belongs not to the loudest power, but to the one others cannot afford to bypass.