China and Arabic countries forge economic strategic partnership
Saturday, 29 December 2007
by Jiang Xufeng, Chen Yong*
With the New Year just around the corner, Dr. Maen Nsour, CEO of the Jordan Investment Board (JIB) came to Beijing, his third Chinese tour this year seeking investment and cooperation opportunities.
As head of the highest Jordanian government authority in charge of investment affairs, he had previously introduced nearly 20 large-scale projects — including the Aqaba port relocation and development program — to Chinese investors and officials in Beijing, and the cities of Shanghai and Guangzhou.
China’s importance to the Arab world is demonstrated by the string of top level officials who visited in 2007. Iraqi President Jalal Talabani, Chairman of Oman’s State Council Yahya Bin Mahfoodh Bin Salim Al-Manthri, Jordanian King Abdullah II all made the long journey to Beijing.
"We believe that Arab countries and China have achieved great progress in economic cooperation, especially in the energy sector," Omani Ambassador to China Abdullah Saleh Al Saadi told Xinhua.
He said bilateral trade and investment had reached a satisfactory level between China and Oman. Official statistics revealed that the Sino-Omani trade, 90 percent of which is related to oil, stood at 6.47 billion U.S. dollars in 2006, up 49.4 year on year. It is reported that China has become Oman’s largest trade partner.
The second China-Arab Business Conference held this June in Jordan, with the Chinese delegation headed by Luo Haocai, Vice Chairman of the National Committee of the Chinese People’s Political Consultative Conference, provided a platform for nearly 1,000 officials and entrepreneurs from China and 16 Arab countries to discuss how to further improve cooperation in economy, trade and investment.
Ambassador Abdullah Saleh Al Saadi added that the Gulf Cooperation Council, a regional organization comprising Saudi Arabia, Bahrain, Kuwait, Qatar, the United Arab Emirates and Oman, predicted that it might sign a free trade agreement with China by the end of this year.
Figures from Chinese Customs showed that between January and August, trade between China and 22 member states of the League of Arab States expanded 29.6 percent from the same period of last year to 55.08 billion U.S. dollars.
Experts forecast the whole year figure could hit 80 billion U.S. dollars in 2008 and surpass 100 billion U.S. dollars in 2010.
The majority of the Chinese exports to Arab countries is made up of mechanical and electrical products, textiles, footwear and bags and China’s imports from the Arab countries were mainly crude oil, oil products, chemical materials and chemical fertilizers.
Commenting on the present China-Arabic relationship, Mohammed A. J. Alshafee, Assistant Head of the mission of the League of Arab States to China told Xinhua it was a "solid strategic partnership".
"It is based on cooperation in political, economic and cultural sectors. The complementary economic, trade and investment ties can boost the strategic collaboration between two sides," he said.
China has signed bilateral economic, trade and technology agreements with 21 Arab countries and signed treaties for promotion and protection of investment with 16 Arab countries.
"The partnership with Arab countries in different economic sectors is congruent with China’s economic development strategy and also in line with the economic growth needs of the Arab countries," said Yin Gang, a researcher with the Chinese Academy of Social Sciences, a leading government think tank.
Yin held that economic cooperation on the basis of political mutual trust, cooperation in energy sector in particular, strengthened the broad partnership between two sides.
China is now the world’s second largest energy consumer, after years of dynamic economic growth, and its demands for energy and resources are still increasing. With the quick pace of domestic economic restructuring, more and more Chinese enterprises are eying going global.
The Arab world holds an important position in Chinese enterprises’ global strategies. By the end of this June, China has invested more than six billion U.S. dollars in Arab countries. Egypt alone has 352 Chinese-invested enterprises.
Chinese companies including PetroChina, the country’s largest oil producer and Sinopec, the country’s largest oil refiner, participated in a series of oil and gas exploration, production and processing projects in Saudi Arabia, Oman, the United Arab Emirates, Algeria, Sudan and Egypt.
China’s Haier Group has opened factories in Jordan, Tunis and Syria. China’s Chery Auto has set up a joint car assembly plant in Jordan. Tianjin Cement Industry Design and Research Institute secured a cement production line contract worth 370 million U.S. dollars in Egypt this June.
"Overseas investment has not only eased the pressure of excess production capacity in home, but also created jobs in these Arab countries," commented Yin.
The Arab world has invested around one billion U.S. dollars in China by the end of this June, focusing on the petrochemical, light industry, construction materials and real estate sectors.
Qingdao Lidong Chemical Company, an Omani-Chinese-Korean joint venture based in the eastern Shandong Province with a total investment of nearly 600 million U.S. dollars, started production this May.
Sinopec, Saudi Aramco and U.S. ExxonMobil signed a joint venture contract this February to process sour crude oil in southeastern China’s Fujian Province, which would start operation in 2009, with an output of 240,000 barrels per day.
"We believe that China has become a strategic economic partner of the Arab world and we are confident that the Sino-Egyptian relations and Sino-Arabic relations would have a bright future," Marwan Rahal, head of the Press and Information Office of the Egyptian Embassy to China, told Xinhua.