New Growth Points for China, Arab World

The global economic climate has been on a downward trend for some time, with the ongoing pandemic and Russia-Ukraine conflict, seemingly driving another wide-scale economic crisis. While making policy responses to the pressing socio-economic problems, countries are looking for new partnerships to develop alternative growth points. China is no exception, and from its perspective, the Arab world might well be such a candidate.

▲ A Chinese company takes in charge of managing and operating a wind power station in Jordan. (PHOTO: XINHUA)

Stable situation

The Arab world now stands out as a region with a relatively stable security situation in a world of conflict. In the prestigious Global Peace Index 2022, conducted by Institute for Economics and Peace, half of the region is peaceful, with Qatar ranked 23, Kuwait 39, Jordan 57, UAE 60, Oman 64, and Morocco 74, among the total 163 countries.

The Arab world is also in a race to full vaccination. Some in the region would pass the 70 percent mass immunity threshold by 2022, among which the UAE, Qatar, Kuwait, Bahrain and Saudi Arabia are taking the lead.

With such a relatively stable situation, Economist Intelligence Unit finds that most countries in the region would embrace full recovery in 2022. It is projected that Egypt, Qatar, Saudi Arabia, Oman, Jordan, UAE and Bahrain will see their 2022 GDPs exceed those of 2019.

Strong demands

The Arab world, being ambitious in their green and digital future, are in strong demand of infrastructure, green technology, and digital transformation. The World Bank estimates the Arab world needs 100 billion USD every year for a reliable, strong, secure, and resilient infrastructure. Carbon emission reduction by Arab countries has been pledged by around 2070. Meanwhile, 5G adoption rate in the region is only one percent.

According to World Intellectual Property Organization's assessment, most Arab countries' innovation performance is below their development level, indicating strong demand for international cooperation. Unlike other developing regions, such international cooperation with the Arab world could well be powered by adequate capitals. The IMF estimated that the upsurge in oil price means an extra 1.3 trillion USD for the region until 2026. The estimation is well evidenced by the increasing revenue reports released by major national oil companies of Saudi Arabia, UAE, Qatar, Algeria, Libya, Iraq and so on.

Apart from oil revenue, the major sovereign funds in the region total 4.257 trillion USD, and have also been earning a steady increase in profits, as reported widely by major financial news outlets.

Mutual favorability

China and the Arab world enjoy long-standing amicable relations and cooperation. Despite the worsening international economic situation, the first eight months of 2022 saw a steady increase in two-way trade between China and most Arab countries. Establishing either Comprehensive Strategic Partnerships or Strategic Partnerships, China has signed 19 BRI cooperation documents with much of the region.

The recent years witnessed the relations further extending to peace and security. China has been making attempts to mediate the regional conflictual situation, which has had a positive response from Arab countries. The 156th Foreign Ministers' Meeting of League of Arab States, a regional organization in the Arab world, wrote of its appreciation in a statement about China's efforts in supporting peaceful resolution of regional crisis in the Arab world.

Public surveys also give positive news. Arab Barometer, a nonpartisan research network based at Princeton University finds that China leads the U.S. in popularity among the people of at least seven Arab countries. The survey has been conducted since 2006, and the 2022 edition was based on nearly 23,000 interviews across Iraq, Jordan, Lebanon, Libya, Mauritania, Morocco, the Palestinian territories, Tunisia and Sudan between October 2021 and April 2022.

Meanwhile, PwC reports that in 13 Chinese cities' 82 percent of investors are confident in investing in the Middle East and North Africa (MENA). The investors are clearly aware of the risks, but they believe the region's economic prospects, natural reserves, and geographic location outweigh the downsides.

Above all, in today's world of volatility, uncertainty, complexity and ambiguity, it might be a good idea to tap in to the potentials of the Arab world and further enhance the China-Arab cooperation to jointly navigate through the current economic turbulence.

(Hao Nan is a Center for International Security and Strategy (CISS) Youth Fellow, Tsinghua University.)