Through the years, the Gulf Cooperation Council (GCC) international locations have been on the forefront of Beijing’s overseas coverage priorities, as China plans to strengthen its vitality safety, speed up its financial progress and strengthen financial ties with the Gulf international locations via infrastructure constructing and telecommunications growth to deepen vital areas for China’s formidable Belt and Highway Initiative (BRI).
By strategic investments in vital sectors within the GCC international locations, China has grow to be some of the essential financial companions of a number of Gulf States. Within the close to future, Beijing hopes to develop its current presence with international locations within the area, particularly after US affect within the area has receded.
Because of Beijing’s economy-centric method, commerce volumes between China and the Gulf States have exploded over time. Beijing has grow to be the most important investor within the area and the GCC international locations. main buying and selling companionswith numbers reaching $330 billion in 2021. Beijing changed Washington because the Center East’s largest buying and selling associate in 2010.
China’s monumental vitality wants are naturally on the middle of commerce relations with Center Japanese international locations. The Center East is the most important provider of oil and fuel to China. Notably, the area accounts for almost half of China’s oil imports, making it very important to Beijing’s vitality safety. 2020, Beijing imported $176 billion worth of crude oil from the area, making China the world’s largest crude oil importer. This quantity accounts for almost half (47 %) of the area’s official imports, most of which come from Saudi Arabia.
Alternatively, China has a particular function that units it aside from different energy-hungry companions. Contrasting with the US’ polarizing stance within the area, Beijing has been in a position to set up easy diplomatic ties with many Center Japanese international locations by specializing in a win-win understanding and a non-interventionist stance.
China’s diplomatic and financial ties with the Gulf international locations have additionally created new alternatives for the area’s oil-based economies. The overwhelming majority of GCC international locations are overly depending on oil revenues however have ambitions to decouple their economies from fossil fuels. By partnering with Beijing, the GCC international locations can diversify their economies and entice overseas direct funding. Subsequently, the Arab international locations wish to develop cooperation with China within the fields of expertise switch, infrastructure growth and renewable vitality.
In opposition to this backdrop, current Chinese language investments within the area are anticipated to develop even additional. Though Chinese language funding within the Center East has declined lately, whole funding within the MENA (Center East and North Africa) international locations reached US$213.9 billion between 2005 and 2021. Saudi Arabia is the most important recipient of Chinese language funding amongst MENA international locations, receiving US$43.47 billion between 2005 and 2021.
Chinese language funding progress within the Center East varies considerably when it comes to financial diversification. For instance, China’s investments in Saudi Arabia over the previous 15 years have been broadly diversified throughout expertise, renewable and nuclear vitality, finance, logistics, protection manufacturing and communications. Such financial diversification offers the Chinese language management extra leverage to strengthen ties with the Center East.
China-Gulf financial relations are anticipated to enter a brand new section after the primary Sino-Arab Summit held in Riyadh on Dec. 9, 2022. In the course of the summit, bilateral relations have been raised to the next degree, each within the political and financial spheres. The summit centered on capability constructing and collective motion. Power safety, nuclear vitality and new vitality have been the highest themes of the assembly. The summit additionally highlighted the meals disaster and local weather change.
Nonetheless, the summit has fueled a lot suspicion within the media, as some pundits within the West have accused Beijing of making an attempt to usurp US affect within the Center East. China’s Overseas Ministry denied the allegation, stating in its lately launched “Report on Sino-Arab Cooperation in a New Period” that Beijing has no want to problem Washington’s hegemony within the Center East. As a substitute, the report emphasised joint growth and a win-win partnership for China and the GCC international locations.
The paper additionally highlighted the main points of China’s cooperation with the Center East over the following decade in key areas comparable to agriculture, funding, finance and high-tech industries. Whether or not or not Beijing has ulterior motives within the Center East, the brand new course of that can start after the Sino-Arab summit will rework the connection between Beijing and the Gulf international locations, taking their financial ties to a brand new, greater degree.
In abstract, current developments between China and the Gulf States have proven Beijing’s robust willpower to forge complete strategic partnerships with the Arab world and develop financial ties with regional powers within the Center East. After all, China nonetheless has an extended approach to go to eradicate Washington’s unmatched affect within the area. Nonetheless, the current disagreement between Saudi leaders and US President Joe Biden over OPEC+’s choice to chop oil manufacturing has additional prompted the GCC to hunt nearer ties with China to counter Washington’s hegemony within the area.
The Saudi Arabia summit has the potential to create a win-win deal for each Beijing and the Gulf states, permitting all companions to safe their pursuits whereas balancing the overwhelming forces of rival states.