GCC chief predicts China free trade deal ‘soon’

Saudi Press Agency via Reuters

• Ministers met in Guangzhou on Sunday
• Talks began in July 2004
• China-GCC trade topped $180bn in 2021

China and the GCC will sign a free trade agreement “soon”, according to a Gulf official, nearly 20 years after negotiations began.

Jasem Mohamed Albudaiwi, the GCC’s secretary general, has predicted the deal will be “wrapped up during the next short period”, adding that its fruits “will be reaped as soon as possible”.

His comments follow a meeting in Guangzhou on Sunday, attended by GCC economy ministers, Albudaiwi and China’s minister of commerce, Wang Wentao.

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Albudaiwi said he hoped the meeting would also “translate into concrete partnerships” between private sector companies.

A GCC-China free trade deal would “undoubtedly be one of the important tributaries” in strengthening the pair’s relations across all sectors, he added.

The trade talks began on July 6, 2004, and there have been 10 rounds of technical negotiations in the years that followed.

Economic ties between China and the GCC have strengthened considerably in recent years. 

GCC

Both regions are major drivers of global growth. The two combined now generate about 22 percent of the world’s GDP, according to management consultancy Oliver Wyman. 

It said China’s rapid economic growth had driven a dramatic increase in energy demand while Gulf imports of consumer goods from China have also surged. 

Total trade between China and the wider Middle East and North Africa region reached $505 billion in 2022 – a 76 percent increase over the past decade. 

“These flows have to be guided by what I would call ‘respectful reciprocity’ – a sense of both sides winning and respecting each other,” said Peter Reynolds, partner and head of Greater China at Oliver Wyman.

“Only then can you align visions and create win-win scenarios.” 

Last December, during President Xi Jinping’s three-day visit to Saudi Arabia, China reportedly signed $50 billion of investment deals with Gulf nations

GCC-China trade exceeded $180 billion in 2021, according to the think tank Asia House, surpassing the GCC’s trade with the US and euro area combined for the first time.

Saudi Arabia is China’s largest trading partner in the Middle East, with bilateral trade reaching $106 billion in 2022. It is followed by the UAE at $72 billion. 

The UAE Ministry of Economy announced last week that Meituan UAS, a Chinese drone-facilitated food delivery business, is joining its NextGen foreign direct investment programme. 

The company will explore the possibility of introducing its delivery drones to the UAE.

Mubadala, the second largest sovereign wealth fund in Abu Dhabi, opened an office in Beijing last month.

The GCC’s Albudaiwi added that an economic forum for Chinese and Gulf businesses would take place in the first quarter of next year.