GCC looks east

Economic and trade cooperation, as well as unconditional participation in a new world order, has changed its orientation

The countries of the Gulf Cooperation Council know that relations with the East, unlike those with the West, are interactions among equals and far from the high-handed colonial attitude and imposed views of the Western countries.

As Nguyen Minh Triet, this year's periodic chairman of the Association of Southeast Asian Nations, said in a joint meeting with the GCC countries on April 11, 2010: "You have what we don't have, and we have in plenty of what you don't have, so we need to join hands together."

In the last few decades, the relations between the GCC and East Asia have intensified. Japan was Dubai's seventh-largest trading partner in 2018, registering 131 companies. From 1970 to 2013, the Republic of Korea invested 41.4 percent of its total engineering, procurement, and construction contracts in the GCC countries. In 2018, India and Oman reached an agreement for New Delhi's access to the strategically important Duqm Port in Oman, and China has also made huge investments in GCC infrastructure.

Asia will be the new industrial giant of the world in the future. In the coming decades, industry, trade and the growth of new technologies will be centered on the East. The GCC is closely monitoring this trend.

The high rate of population growth, urbanization and industrialization will increase the domestic demand of Asian countries for energy consumption. For example, energy consumption among Southeast Asian countries doubled between 1990 and 2007 and is projected to triple by 2030 from 2007 levels. Most of the energy imports of this region are from the GCC countries.

Among the Eastern countries, China is considered the most important due to it being the largest energy consumer. In the Persian Gulf, China has signed comprehensive strategic partnerships with Iran, Saudi Arabia and the United Arab Emirates, and strategic partnerships with Iraq, Jordan, Kuwait, Oman and Qatar.

Oil and gas are the two main industries and important sources of revenue for GCC countries. Currently, China imports more than 70 percent of its energy needs from abroad, and the Middle East is its most important foreign supplier. In 2020, about 47 percent of China's energy needs, worth $176 billion, were supplied by the Middle East. Among them, GCC countries are the most important suppliers of China. Saudi Arabia is the largest exporter to China, accounting for about 15.9 percent of China's total crude oil imports in 2020 at a cost of about $28.1 billion. In the same year, China received 13.4 billion cubic meters of natural gas (about 14 percent of its total demand) from Arab countries, especially the GCC countries.

Due to the predictable growth of energy consumption in China and the dependence of GCC economies on oil, they are very interested in deepening relations with China. Oil and gas account for more than 20 percent of the GDP and at least 50 percent of the government revenue for most GCC countries. The GCC countries will take at least 10 years to end oil dependence due to the dependence of economic stability on the energy market and oil shocks.

The second reason for the GCC's interest in China is the use of new Chinese technologies without political preconditions and noninterference in the domestic affairs of the GCC countries. For years, the West has made the transfer of technology subject to a series of preconditions, such as the observance of the principles of democracy and human rights.

Unlike the West, China does not believe in political interference in the GCC countries and opposes regime change. Governments in the Middle East generally welcome partnerships with Beijing because, they believe, it treats them as equals rather than junior partners or colonial proxies. China has pushed the concept of developmental peace — in contrast to the Western concept of democratic peace — in the Middle East, arguing that the root cause of regional insecurity is economic stagnation, high unemployment, poor infrastructure, rapid population growth, and the brain drain rather than a democracy deficit.

Trade cooperation and investment in GCC infrastructure is another factor driving GCC cooperation with China. The GCC countries intend to integrate into the global economy, which requires investment in infrastructure.

Saudi Arabia plans to invest $45 billion in its national railway network. The bidding value of Kuwait's major projects has already reached $30 billion. Qatar spent $220 billion on the 2022 World Cup, 15 times more than Russia did as the previous host in 2018. The UAE is to host the 28th Conference of the Parties to the UN Framework Convention on Climate Change (COP28) in December and plans to invest $54 billion in renewable resources and energy. Oman plans to build the Duqm special economic zone in its Al Wusta Governorate and has expressed an unequivocal willingness to cooperate with China.

The GCC countries are increasingly focused on diversifying their engagements, particularly with Asia and China. China is already an important economic partner in the Persian Gulf. In 2020, it replaced the European Union as the largest trading partner of the GCC countries, with bilateral trade worth $161.4 billion, and in the last 17 years, it has invested nearly $25 billion in these countries.

Finally, the efforts to define a new world order are of interest to the GCC. Arab governments in the Arabian Peninsula prefer the traditional order of the West, but the US' reduced attention on the Middle East and pivot to the East showed that they cannot rely on the West.

The request of Saudi Arabia, the UAE, and Bahrain to join the BRICS group as a tool to weaken the traditional structure of the West, the request of all the GCC countries except Oman to join the Shanghai Cooperation Organization as dialogue partners, de-dollarization and the request of the UAE and Saudi Arabia to trade with local currencies and not apply sanctions against Russia show the willingness of the GCC countries to reform at least some features of the Western world order.

In the last two decades, the GCC countries have shown a great desire for trade and communication with East Asian countries, including China. Benefiting from trade, investment, and Asian technologies and showing opposition to some policies of Western countries are among the reasons for connecting with these countries.

The author is a research associate at the International Institute for Global Strategic Analysis in Pakistan, as an international affairs analyst in the Middle East. The author contributed this article to China Watch, a think tank powered by China Daily.

Contact the editor at editor@chinawatch.cn.