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.
