Gulf economies complementary to China

The 89,600-square-meter Naghsh-e Jahan Square in Isfahan is one of the biggest squares in the world [Photo by Tan Yingzi/China Daily]

More than 100 countries and international organizations have expressed their willingness to be part of the Belt and Road Initiative (the Silk Road Economic Belt and 21st Century Maritime Silk Road), and China has signed various forms of cooperation agreements with more than 40 countries along the routes since President Xi Jinping proposed the initiative in 2013.

The Gulf region has been an important trade partner of China since ancient times. Located at a crossroad of the Atlantic, Indian and Pacific oceans, the Gulf region is rich in oil and natural gas resources, and has convenient road and water networks. China, as the world's second-largest economy, has the highest manufacturing output and goods trade volume. And it contributes more than 33 percent to global economic growth. These factors make the Gulf region and China economically complementary.

Trade between China and the Gulf Cooperation Council reached $175.2 billion in 2014, a 20 fold increase from 2001. The GCC is China's seventh-largest trade partner, with China being the GCC's second-largest trade partner and most important oil buyer.

The decline in oil prices over the past couple of years has forced GCC members to pursue new development models, by restructuring their economies, developing resource-intensive manufacturing industries, developing their tourism and logistics sectors, and increasing input in infrastructure construction.

The GCC is one of the most active organizations in the Gulf region, and officials from Kuwait, Qatar, the United Arab Emirates, Oman, Bahrain and Saudi Arabia have all showed their willingness to take part in the Belt and Road projects and deepen cooperation with China.

My suggestions on how to deepen the two-way relations are as follows:

First, the two sides should make joint efforts to foster strategic integration, by strengthening exchanges and collaboration, and finding more common interests. The GCC's strategy to adjust its economic structure is conducive to China's global industrial capacity cooperation. This means the two sides have their comparative advantages when it comes to cooperation.

Second, China and the GCC should take forward their free trade agreement negotiation, which has seen twists and turns since it began in 2004. At the ninth round of the negotiation, which may be held soon, the two sides should therefore keep the bigger picture in mind and strive to reach a free trade agreement as early as possible, so that enterprises and consumers on both sides can enjoy the benefits of free trade.

Third, the two sides have to establish normal cooperation mechanisms in key fields, such as energy and resources, finance, and infrastructure, industrial park and smart city construction.

Both parties should also combine bilateral financial cooperation with cooperation in infrastructure construction to tap industrial capacity.

And fourth, think tanks from China and the GCC should strengthen exchanges, provide intellectual support to the negotiation and act as a bridge between the two sides.

The Development Research Center of the State Council, China's Cabinet, took the lead in establishing a Silk Road International Think Tank Network last year with the aim of fostering exchanges and collaborations among relevant countries. Think tanks from more than 30 countries and over 10 international organizations have joined it, and those from the GCC member countries are welcome to do so.

An Arab saying, "Hope without action is like an infertile tree", carries a meaning similar to a Chinese proverb, "A journey of 1,000 miles begins with one step." Hence, as long as concrete actions are taken in the right direction, such cooperation will benefit both peoples.

The author is director of the Development Research Center of the State Council. The article is an excerpt from a speech he delivered at a think tank summit for economic cooperation between China and the Gulf countries in Beijing on Dec 17.