China ties to GCC mostly economic

A think tank report predicts that oil exports from the Middle East will double within 20 years while a military presence is not likely.

The Chinese navy made a port call in Abu Dhabi in March. Sammy Dallal / The National
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BEIJING // Economic ties between China and the GCC will probably strengthen in the coming years, but Beijing will probably not develop a significant military presence in the Gulf region, according to analysts and a recent think tank report.

The study from Jamestown Foundation, based in Washington, said shared energy and trade interests would mean ties would "continue to flourish" in the future. China-GCC links have deepened as China's thirst for oil has grown in line with its economic development. Bilateral trade reached US$70 billion (Dh257bn) in 2008 and according to some predictions cited by the Jamestown Foundation, could reach $500bn by 2020.

During the Cold War, the report noted, China had stronger links to Middle East countries with pan-Arab and socialist sympathies. But China's surging demand for oil has dramatically refashioned its alliances in the region, and these relatively new ties are set to endure: China's oil demand is predicted to double by 2030, which will require dramatic growth in oil imports as domestic supplies stabilise.

Ben Simpfendorfer, the chief China economist for the Royal Bank of Scotland and the author of The New Silk Road: How a Rising Middle East is Turning Away from the West and Rediscovering China, said Russia was the "only major alternative" to the Middle East in terms of supplying oil to China. "I don't think Central Asia cuts it," he said, noting that the International Energy Agency's predictions were for the Middle East's contribution to China's oil supply to double by 2030. Oil ties also include investments in both regions in refineries and associated plants.

China-GCC trade will grow in areas other than oil, with China acting as a "demand heartland" for exports of aluminium, fertiliser and other products, which are industries the diversifying GCC economies are focusing on, said Samir Pradhan, a senior researcher in the Gulf-Asia programme at the Gulf Research Centre in Dubai. Unlike most other China-GCC trade relationships, China-UAE ties are already focused on areas other than oil. China exported goods worth Dh49bn to the UAE last year.

The Jamestown Foundation report, written by Chris Zambelis, an associate with the Washington risk management firm Helios Global, noted China was increasingly dealing with the GCC as an economic bloc, while maintaining strong bilateral relations with each country. China is also heavily investing in maritime facilities across the Indian Ocean to safeguard energy supplies, and although few see China as having ambitions to become a significant military player in the Gulf, there have been some signs of increased activity, such as a visit this year - the first - by the Chinese navy to the UAE.

Christopher Alden, a reader in international relations at the London School of Economics, said China "does not have the force projection capability". China "may establish a presence through basing rights", but it is beyond China's capability and perhaps its interests as well to go further than that, he said. However, the Jamestown Foundation report suggested the GCC might look to China to act as a mediator when dealing with Iran, China's third largest oil supplier. China-Iran trade links are strengthening as western companies pull out in the face of sanctions.

Also, some analysts, such as Jeong-Min Seo, a Middle East politics specialist at Hankuk University of Foreign Studies in Seoul, see China becoming more of a rival to the United States in the region. . "Definitely [China] will expand the relationship with the region into other sectors such as the political and security," Mr Seo said. The Jamestown report noted that a perceived decline in power of the US, which has acted as the security and sovereignty guarantor for GCC states, will spur further development of Sino-GCC links.

Whatever happens in coming decades militarily, China will not rival the US in terms of cultural influence in the Middle East, said Ding Xueliang, a Chinese foreign affairs specialist at Hong Kong University of Science and Technology. This is despite the growing Chinese population in the region and the opening of Chinese-language schools. "Many young people in the region are attracted by the American way of political life," he said. "China is attractive to some of the governments of the region, but not to societies."