China-Gulf Relations: 'More Than Just Oil'

Saudi Crown Prince Mohammed bin Salman and Chinese President Xi Jinping jointly chair the “Riyadh Gulf-Chinese Summit for Cooperation and Development” in December (SPA)
Saudi Crown Prince Mohammed bin Salman and Chinese President Xi Jinping jointly chair the “Riyadh Gulf-Chinese Summit for Cooperation and Development” in December (SPA)
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China-Gulf Relations: 'More Than Just Oil'

Saudi Crown Prince Mohammed bin Salman and Chinese President Xi Jinping jointly chair the “Riyadh Gulf-Chinese Summit for Cooperation and Development” in December (SPA)
Saudi Crown Prince Mohammed bin Salman and Chinese President Xi Jinping jointly chair the “Riyadh Gulf-Chinese Summit for Cooperation and Development” in December (SPA)

A recent report by the World Economic Forum (WEF) noted that the economic relations between the GCC countries and China go beyond oil and trade, but constitute a large proportion of the global GDP, which opens up great prospects for promising aspirations and opportunities.

According to the report, China and the Gulf countries together generate about 22 percent of the world’s GDP. This makes them two major drivers of global growth, especially in light of the deepening economic relations between them amid major geopolitical shifts.

The report stressed that technology, industries and electronic games represent great opportunities for future cooperation.

According to the report, major relations began with the rapid economic growth of China, which led to a significant increase in the demand for energy. Meanwhile, the Gulf’s imports of consumer goods from China have surged.

Total trade between China and the whole of the Middle East and North Africa reached $505 billion in 2022 – increasing 76% over 10 years. Total trade between China and the Gulf countries alone increased three times in the same period, the report underlined.

However, the report, which was prepared in cooperation with Oliver Wyman, confirmed at the same time that the economic ties between the two regions are “much more than just trade”.

Business leaders from Greater China and the GCC convened at the World Economic Forum’s Annual Meeting of the New Champions in Tianjin in June 2023 to explore how to enhance understanding of each other’s markets and build partnerships, the report said, pointing to three major takeaways from their discussions:

In addition to energy, technology, manufacturing and electronic games are priority sectors for both regions, providing great cooperation opportunities.

Following Chinese President Xi Jinping’s visit to Saudi Arabia in December 2022, the Kingdom signed 35 memorandums of understanding with Chinese firms, the majority of which with private companies. The report pointed to an agreement with Chinese technology giant Huawei, covering cloud computing and building high-tech complexes in Saudi cities.

In manufacturing, the WEF report stated that ongoing global shifts in manufacturing hubs and “friend shoring” initiatives offer opportunities to reshape supply chains. Enovate, a Chinese electric vehicle (EV) start-up, is illustrative of the shift towards new economy sectors with a planned $500 million investment in EV production in Saudi Arabia alongside a local partner.

On the third axis, the gaming sector is a great cross-border opportunity that reflects common preferences and consumer habits in both regions. This can be evidenced by the acquisition of a $265 million stake in Chinese e-gaming company VSPO earlier this year by Saudi Arabia’s public investment fund.

Finally, the report confirms that energy partnerships are about more than just oil and gas. Both regions are highly vulnerable to the impacts of climate change, and their shared challenges provide opportunities for transformative collaboration.

In this regard, the report pointed to a partnership between Dubai-based Mensha Ventures and Chinese partners to invest up to a $1 billion in clean technologies.

All these factors come at a time of increasing mutual trust between the two sides.

“Institutions for dialogue and trust-building are essential to build sustained commercial ties,” said Alexandre Raffoul, the World Economic Forum’s Head of Business Engagement for the Middle East and Africa and moderator of the Tianjin discussion.

In the end, the close ties between China and the Middle East - sometimes referred to as the “New Silk Road” - are about more than just oil and consumer goods... Maybe even more important are the flow of technologies, people, ideas and capital.

There are good signs of moving forward in this context, the report said, noting that an increasing number of Middle Eastern students are learning Mandarin, as are their peers in China who are studying Arabic.



Gold Eyes Best Quarter in over Eight Years

A participant shows gold bars during the 21st edition of the international gold and jewelry exhibition at the Kuwait International Fairgrounds in Kuwait City on May 23, 2024. (Photo by Yasser AL ZAYYAT / AFP)
A participant shows gold bars during the 21st edition of the international gold and jewelry exhibition at the Kuwait International Fairgrounds in Kuwait City on May 23, 2024. (Photo by Yasser AL ZAYYAT / AFP)
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Gold Eyes Best Quarter in over Eight Years

A participant shows gold bars during the 21st edition of the international gold and jewelry exhibition at the Kuwait International Fairgrounds in Kuwait City on May 23, 2024. (Photo by Yasser AL ZAYYAT / AFP)
A participant shows gold bars during the 21st edition of the international gold and jewelry exhibition at the Kuwait International Fairgrounds in Kuwait City on May 23, 2024. (Photo by Yasser AL ZAYYAT / AFP)

Gold halted its record run on Friday but remained on track for its best quarter since 2016 after a rally catalysed by an outsized US Federal Reserve interest rate cut, while markets braced themselves for a crucial inflation report due later in the day.

Spot gold was down 0.1% at $2,666.50 per ounce as of 1115 GMT, below the all-time peak of $2,685.42 hit in the previous session. It is heading for its best quarter since the first three months of 2016.

US gold futures fell 0.2% to $2,688.90, Reuters reported.

"The market at this point in time has priced in all the good news and there's also some hesitancy from fresh buyers to get involved at these record high levels," said Ole Hansen, head of commodity strategy at Saxo Bank.

Bullion has risen 29% so far this year, hitting successive record peaks after last week's half-percentage-point cut by the Federal Reserve and the stimulus measures announced by China earlier this week.

Silver prices surged, tracking bullion's strong performance, though some analysts warn that the rally may fade.

"Overall, industrial demand is still supportive for silver. But we need to have a stronger economic performance in China as well as in other developed countries," said ANZ commodity strategist Soni Kumari.

The surge in silver prices is more a spillover impact from gold, Kumari said.

Spot silver eased 0.1% to $31.98 per ounce, after hitting its highest since December 2012 at $32.71 on Thursday. It is set for a third straight week of gains.

"I do believe silver will continue to outperform gold. But as we all know, wherever gold goes, silver tends to go, but faster," Hansen added.

Both gold and silver serve as safe-haven investments, but the latter has more industrial applications, so tends to underperform during recessions and outperform when economies expand.

Inflows into gold exchange-traded funds, particularly from Western investors, are set to rise in coming months, adding yet more positive stimulus for already record high bullion prices. Some banks expect gold to rise towards $3,000.

In other metals, platinum was up 0.5% at $1,012.40 but palladium fell nearly 1.5% to $1,031.75.