China Boosts Mutual Cooperation with Arab States
China and the Arab states have unveiled a series of plans to enhance mutual cooperation at the sixth ministerial conference of the China-Arab States Cooperation Forum (CASCF), which was held in Beijing last week.
Around 200 delegates from Arab states and the Arab League attended the conference in order to discuss possibilities for further economic, political, social and cultural cooperation. The agenda of the CASCF mainly focused on economic issues, such as the building of the Silk Road economic belt, but also included global issues such as anti-terrorism efforts, poverty, the crisis in Syria and efforts to reform the UN Security Council.
During the forum’s opening ceremony, Chinese President Xi Jinping called on all nations to deepen cooperation and embrace the spirit of the Silk Road. He also announced the decision to designate 2014 and 2015 as years to celebrate the friendship between China and the Arab states. At the conclusion of the forum the two sides signed the Beijing Manifesto, which marked a significant step in strategic cooperation between the two sides. The manifesto, which will act as a blueprint for China-Arab cooperation over the next decade, outlines the “1+2+3 strategy”, which discusses three ways that the two sides will work together.
The first part of the strategy, and arguably the main axis, refers to energy cooperation. China’s economic growth in recent decades has caused a boom in demand for oil and other raw petroleum products, much of which has been provided by Arab states. Approximately three-quarters of China’s oil is currently supplied by the Middle East and Africa and crude oil imports from Arab states amounted to 133 million tons last year.
During his opening remarks, Xi called for the two sides to establish a “mutually beneficial, safe and reliable China-Arab strategic cooperative relationship for energy based on long-term friendship.” He also called for safer energy transport routes and further cooperation across the oil and natural gas industrial chains.
The second part of the strategy discusses a commitment to increasing trade and investment between the two sides. China is now the top trading partner of nine Arab states, as well as the second biggest trading partner of the Arab states overall. Trade between the two sides has increased dramatically during the past decade from US$25.5 billion to US$238.9 billion, giving an average annual growth rate of more than 25 percent.
However, despite positive growth, China’s imports from Arab states accounted for only 7 percent of total annual imports in 2013, a situation that the Beijing Manifesto aims to change. China plans to increase its two-way trade volume with Arab states from US$240 billion to US$600 billion within the next ten years. In order to achieve this, the Chinese government will urge Chinese companies to import more non-petroleum products from Arab states.
The Beijing Manifesto also outlines plans to increase investment. China’s direct investment in Arab states amounted to US$2.2 billion last year, or just 2.2 percent of the US$100 billion that China invests abroad annually. In an effort to increase China’s non-financial investment stock in Arab states from US$10 billion to more than US$60 billion within the next ten years, the Chinese government will encourage Chinese companies to invest in the energy, manufacturing, agriculture, service and petrochemical industries of Arab states.
The final part of the “1+2+3 strategy” aims to further China-Arab cooperation in new sectors, including aerospace technology, nuclear energy and new energy. The two sides may also cooperate on initiatives including establishing a China-Arab technology transfer center, opening up the use of China’s Beidou Navigation Satellite System to Arab states and building a training center promoting the peaceful use of nuclear energy. China has also declared its intention to assist the Arab states with infrastructure construction and job creation.
China’s auspicious economic environment has also offered Arab countries attractive incentives to seek investment opportunities in China. A large amount of oil money from Middle Eastern countries is being invested in East Asia, and China hopes to seize these business opportunities by establishing its status as an important market for investment from the Middle East.
This is not the only benefit that China looks to receive from a closer relationship with the Arab states. China’s foreign policy in the region is being strongly determined by the increasing importance of resource security, and at the core of this is China’s voracious appetite for the region’s commodities. As the world’s second-largest consumer of oil, China relies heavily on the Middle East to secure the resources necessary to maintain its economic growth.
Looking into the future, the China National Petroleum Corp predicted last month that Chinese annual oil consumption would rise from 286 million metric tons in 2013 to 360 million metric tons in 2020 and then to 440 million metric tons in 2030. Although China is also a significant oil producer, the Middle East, with an oil reserve that accounts for more than 61 percent of the global total, is evidently still an extremely valuable part of Beijing’s solution for oil security.
This year marks the tenth anniversary of the establishment of the CASCF. In these ten years; Chinese-Arab relations have gone from strength to strength as a result of increased economic, political, social and cultural cooperation. Looking back at a decade of relations between the two sides last week, Chinese Foreign Minister Wang Yi commended China and the Arab states for always treating each other with sincerity and trust.
“The two sides have also always pursued pragmatic, efficient and mutually beneficial cooperation and sought common development by sharing opportunities. In addition, the two counterparts have promoted an approach of openness, inclusiveness and sought common ground, which has brought their citizens closer to one another,” Wang said.
Leaders from both sides have expressed optimism about the future of the relationship following the conclusion of the forum. The progress made at this year’s CASCF will undoubtedly pave the way for further cooperation between the two sides, which will hopefully lead to another successful decade.
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