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UPDATED: June 18, 2014 NO. 25 JUNE 19, 2014
Meeting Halfway
China and Arab states create top-level plans for collaboration
By Yu Lintao

Chinese analysts predicted that the "looking to the East" strategy of Arab states will become a long-term trend. For decades, with the exception of some Gulf oil-producing countries, many Arab states have continued to face severe challenges in economic development and improvement of their people's livelihood, leaving them in a weak position in terms of the global economic order. Also, Western countries often fail to deliver their committed assistance to the Arab world. Against this background, many Arab states are eyeing emerging economies in the Asia-Pacific region, particularly China, as they move away from reliance on the West.

"China's high-speed growth appeals to Arab states. A friendly relationship is a necessity for both China and Arab states as they pursue all-round development," said An Huihou, former Chinese Ambassador to Egypt. Moreover, the social turmoil in the Arab world since the end of 2010 has forced these countries to turn their focus to economic development. Thus, China has become an obvious choice as a cooperation partner.

In the past decade, Sino-Arab economic relations have seen substantial progress. Arab states became China's sixth largest trade partner in 2013. Bilateral trade volume increased from $25.5 billion in 2003 to about $240 billion in 2013, representing an annual growth of 25 percent. In the same period, the business volume of Chinese engineering contracts in Arab states increased from $2.6 billion to $29.1 billion.

Though the economic relationship is growing rapidly, there is still room for improvement. President Xi said in his keynote address that China's imports from Arab countries in 2013 amounted to $140 billion, but only accounts for about 7 percent of the $2 trillion of goods China imports annually. Meanwhile, China's direct investment in Arab countries now makes up just 2.2 percent of the $100 billion China invests abroad each year. Xi told his audience that, "Where there is a gap, there are potential opportunities." He said that China will import over $10 trillion in goods and make more than $500 billion in direct investment abroad in the coming five years, a prospect that will surely benefit Arab countries.

During the latest CASCF conference, China pledged to increase its trade with the Arab world from last year's $240 billion to $600 billion, and increase non-financial investment stock in Arab states from last year's $10 billion to $60 billion in the next 10 years. Currently, China's northwestern provinces, home to most of the country's Muslims, have come to the forefront of Sino-Arab cooperation. The China-Arab States Expo, annually held in Yinchuan, capital city of Ningxia Hui Autonomous Region, has served as an important platform for promoting economic and trade exchanges between the two sides.

Solid foundation

Liu Baolai, former Chinese Ambassador to the United Arab Emirates and Jordan, said that the CASCF has played a significant role in promoting Sino-Arab relations since its establishment 10 years ago. China's "one belt and one road" strategy will now add new dimensions to Sino-Arab cooperation on the CASCF platform.

In his speech, President Xi called for joint efforts in building the Silk Road Economic Belt and the 21st Century Maritime Silk Road. He encouraged the two sides to pool wisdom and share ideas with each other to achieve positive results in their joint endeavor, so that the development of the "one belt and one road" will accommodate the interests and concerns of all parties.

"To implement the strategy, the two sides first should promote the establishment of a free trade area between China and the Gulf Cooperation Council. It will help advance the comprehensive development of Sino-Arab economic relations," Liu said to Beijing Review.

Liu said that Gulf states now are advancing railway development. China is in a strong position to play a role in railway construction in the region; it can also help link regional railways to the broader Eurasian railway network. In addition, China can invest in the construction of several large petrochemical projects in Arab states to promote employment in the region.

Ghanim al-Shibli, head of the Arab League (AL) mission in China, said in an interview with Xinhua that Xi's proposal on the "one belt and one road" had laid a solid foundation for deepening Sino-Arab relations and would serve as a new starting point for the CASCF.

"The AL will work with China to push forward the construction of the 'one belt and one road'," he added.

Email us at: yulintao@bjreview.com

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