China-Gulf Economic Relations in the BRI Framework

Encrypting President #xijinping key visions of #winwin #cooperation and a #community with a shared future in the historic China-Arab Summit and the China-Gulf Cooperation Council Summit held in early December last year, in Riyadh, the People's Republic of China and Gulf states embarked on a new level of strategic partnership. The #Gulf region is increasingly becoming #China's most preferable trade destination outside the Asia-Pacific. Under the region's technology and infrastructure push, its economic ties have been anchored to fit Beijing's #beltandroad Initiative.

The "#Geoeconomics Approach" of China with the #GCC states rests upon the pillar of economic interdependence. China, the world's largest energy consumer, has remained GCC's largest export market of #petrochemical products, including liquified natural gas (#LNG) and crude oil. PRC has been actively strengthening its ties with the six member countries of the GCC. The economies of #saudiarabia, #Kuwait, and #Oman depend highly on their oil exports to China. Simultaneously, #China has remained dependent on the Gulf countries for its energy security, and Saudi Arabia alone accounted for 17.4 percent of its crude oil imports to China in 2021.

Sino-Gulf trade experienced an upward trend from $10bn in 2000 to more than?$230 billion?in 2021. Chinese fossil fuel imports from?#Saudi Arabia,?#Oman, and the #UAE touched?$44.9 billion,?$25.4 billion,?and?$21.3 billion, respectively. Besides energy, GCC states provide China with a huge market for Chinese goods, investment opportunities in #infrastructure, #digital economies and #manufacturing, and construction contracts. Additionally, according to Saudi state media, China and Saudi Arabia signed deals valued at around US$30 billion. An agreement signed over Huawei Technologies is expected to bring data centers, cloud computing, and high-tech complexes to Saudi cities. Saudi Arabia has been the largest recipient of Chinese BRI investment in the Gulf region, which amounted to US$5.5 billion worth of deals,?manifesting Beijing's long-term ambitions and commitments in the Middle East while detaining from investment in other countries due to geopolitical concerns.

Conversely, GCC wants the foreign direct investment inflows in the region to not only gratify the local demand but also integrate these local economies into #global #supplychain, for which the BRI offer the best opportunity for them. Moreover, the Gulf countries, including Saudi Arabia and UAE, intend to reduce their dependence solely on oil by making new industries that will help generate more employment opportunities for the locals. They are investing in emerging technologies as a vital pillar of #economic #diversification to take a shift away from fossil fuels. Therefore, for a post-oil era, the Gulf states are increasingly looking towards the East for economic diversification at home. China, an Asian economic giant, is their most sustainable option, and BRI stimulates this interaction.