China and the Gulf Cooperation Council, an economic grouping of Middle Eastern states that are one of the world’s fastest-growing regions, wrapped up a two-day Arab-China business conference in Riyadh last Monday that made international headlines. size of announced trade deals – more than $10 billion involving about two dozen deals.

The event also drew attention for warming relations between China and a region with traditionally close ties to the United States. The head of the New Development Bank, Dilma Rousseff, said in a keynote speech: “China and Saudi Arabia have the potential to rewrite the rules of the global energy market, lead the way in currency diversification and adopt new models of economic cooperation. Among the deals announced was a $5.6 billion investment by Saudi Arabia’s Ministry of Investment and Chinese electric car maker Human Horizons.

Members of the Gulf Cooperation Council, or GCC, include the United Arab Emirates, Bahrain, Saudi Arabia, Oman, Qatar and Kuwait. The region’s economy is smaller than China’s – the world’s #2 with a GDP of $18 trillion in 2022. Yet collectively, the oil-rich GCC has a GDP of around $2 trillion, a young population of over 50 million, and large capital funds available for investment in China and elsewhere.

What next for trade relations between China and GCC members after the landmark conference?

To learn more, on Friday, I exchanged via Zoom with two editors from Forbes Middle East, the licensed Middle East edition of Forbes – managing editor Claudine Coletti and head of research Jason Lasrad. “The general feeling and the message for us in this part of the world is that the relationship is strong and growing stronger,” Coletti said. “And that the opportunities are kind of limitless.” The following are edited excerpts.

Flannery: What are your main takeaways from the Arab-China trade conference?

Coletti: The announcements seemed very focused on Chinese investment in Saudi Arabia and that relationship. Saudi Arabia and the United Arab Emirates are the two biggest markets here.

There were two key points. The first was that the major investment deals show how much potential there is between Saudi Arabia and China – and the GCC and China. Around 30 investment agreements worth more than USD 10 billion have been signed. More than half of that comes from one $5.6 billion deal between the Saudi Ministry of Investment and Chinese electric vehicle company Human Horizons. Another was a $533 million investment in an iron plant by Saudi Arabia’s AMR ALuwlaa Company and Zhonghuan International Group, and another was a $500 million copper mining deal between Saudi Arabia’s ASK Group and China National Geological & Mining.

The second key point was the Riyadh Declaration. You can see from this that we are in for a general boost in trade, investment and economic affairs, and that there will be joint efforts in areas such as energy, renewable energy, the digital economy and entrepreneurship, which are already interesting sectors. There was mention of strengthening cooperation in areas such as AI, cyber security, e-commerce and industrial internet, which I think is very interesting when you talk about China and Saudi Arabia. It is clear that there is an appetite for real development and cooperation in these areas.

They also mentioned dealing with the negative effects of the global recession, the turbulence caused by the effects of the pandemic and the effects of what is happening in Ukraine. The mention of the importance of reducing carbon emissions between the two countries was also really interesting. This could be a good thing for the world and an opportunity to invest more in renewable energy and the various opportunities it would bring. The general feeling and message for us in this part of the world is that the relationship is strong and growing stronger. And the opportunities are limitless in a way.

Flannery: Beyond oil, what are the opportunities for GCC companies in China?

Coletti: You can’t ignore the importance of oil. It is still a large part of the trade between the two areas. And yet Saudi Arabia and most other states in the Middle East are trying to diversify away from oil. Interest in partnership is in the fields of technology, healthcare, tourism and education, among others.

Flannery: So is there also a view that China can be a source of capital and technology?

Coletti: Yes, but it’s not all about investing Chinese money here. Middle Eastern sovereign wealth funds are increasingly active in Asia. Mubadala of Abu Dhabi, Qatar Investment Authority, Abu Dhabi Investment Authority and Kuwait Investment Authority have taken steps to invest in China. Just earlier this year, in February, Saudi Arabia’s Public Investment Fund invested $265 million in a Tencent-backed e-sports company in China. Beyond China itself, there is also interest in creating stronger ties and seeking opportunities in other Asian markets.

Lasrado: GCC is also interested in the actual manufacturing facilities and the job creation partnership side.

Flannery: How competitive is the GCC manufacturing environment for outsiders like China?

Lasrado: Traditionally, it wasn’t known for manufacturing. Until a few years ago, and even to a large extent now in Saudi Arabia, foreign owners were not allowed to own more than 50% of a company in many sectors. Vision 2030 is trying to change that and open up. The Middle East was not known for manufacturing, but that is changing. When I first came to the Middle East (from India) 10 years ago, you hardly saw any locally produced pharmaceuticals, for example. However, now most are produced in the UAE or Saudi Arabia. This is just an example.

Flannery: Recently, there have been several secondary listings of Chinese companies in Europe that have not turned to the US in the way that they would have turned to the Nasdaq or the New York Stock Exchange recently. Do you expect more Chinese companies to list on exchanges in the Middle East?

Lasrado: I think it’s unlikely overall because Middle Eastern exchanges are not yet mature enough and focus on local listings. They are not targeting international enrollments yet.

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