The summit held in Riyadh between Chinese President Xi Jinping and the leaders of the GCC countries might be an opportunity to relaunch negotiations on a free trade agreement, which began in July 2004.
The summit between China and the rich Gulf states, held last Friday, aimed to strengthen the already very close economic relations between the Asian giant and the regional bloc, a traditional strategic partner of the United States. In 2020, China became the first trading partner of the six countries of the Gulf Cooperation Council (GCC), with trade dominated by fossil fuels. The second largest economy in the world buys petroleum products from Oman, the United Arab Emirates, Kuwait, and above all from Saudi Arabia, which alone covered nearly 17% of its needs in 2021.
Qatar also supplies it with liquefied natural gas (LNG). In the midst of the energy crisis linked to Ukraine, the two countries signed an agreement in November for the supply of four million tonnes of Qatari LNG per year, over a record period of 27 years. Excluding energy, the United Arab Emirates is the leading market for Chinese products in the Middle East and North Africa, with this Gulf State then re-exporting them to the rest of the Arab world.
Thus the summit held in Riyadh between Chinese President Xi Jinping and the leaders of the GCC countries might be an opportunity to relaunch negotiations on a free trade agreement, which began in July 2004. According to the Chinese Ministry of Commerce said nine rounds of talks have since been held, but both sides pledged to “speed up the process” during a visit by GCC officials to Beijing in January.
Chinese companies have invested more than $107 billion in the six Gulf countries between 2005 and 2022, according to data compiled by the American Enterprise Institute. The majority of Chinese investment and construction projects went to Saudi Arabia, the Arab world’s largest economy, for a cumulative amount of $49.6 billion over the period, according to the same source. The Gulf countries have extended their partnerships with Beijing to other areas, such as armaments and technologies. The region’s monarchies are also betting on Chinese technologies to develop 5G and build smart cities.
Sami Nemli with agencies / Les Inspirations ECO
