Sino-GCC collaboration more than just oil

Relations between China and the Gulf Cooperation Council countries have been booming in recent years, with China being the largest trading partner of the regional bloc. Despite the negative impacts of the COVID-19 pandemic, which have stalled a global economic recovery, their trade increased by 45 percent last year.

And it is not just oil. Practical cooperation between the two sides in infrastructure, finance, investment, high technology and other fields has been continuously deepening, while cultural and people-to-people exchanges are flourishing.

Which explains why State Councilor and Foreign Minister Wang Yi, during a meeting with the foreign ministers of GCC countries on the sidelines of the 77th session of the United Nations General Assembly on Monday, described China and the GCC countries as “good friends, partners and brothers” while calling their mutually beneficial relationship “a model for cooperation” between China and developing countries.

The close relationship has been developed partly on the strong complementarities they share. The GCC countries are seeking to diversify their economies but at present they still depend on their energy trade for that, while China needs stable supplies of crude oil to power its economy. For example, Saudi Arabia provided 17 percent of China’s oil imports in 2021, making it China’s top crude oil supplier.

Apart from energy, there is growing synergy between China and the GCC countries to explore cooperation opportunities in other areas such as telecommunications, artificial intelligence and smart cities. For example, China has participated in the GCC countries’ development of 5G mobile networks, with its telecommunications giant Huawei playing an active role in their digital transformation. Many GCC countries have seen technology-based cooperation with China as an effective means to help them diversify their industries and build knowledge economies.

The China-proposed Belt and Road Initiative has added new momentum to Sino-GCC cooperation, as many GCC countries have aligned their national development programs with the Belt and Road projects. For example, Saudi Arabia is synergizing its Saudi Vision 2030 with the Belt and Road Initiative by enhancing cooperation with China on energy, infrastructure, finance and high-tech.

In order to bring bilateral relations to a new level, China and GCC countries have now agreed to work jointly to reach a free trade agreement at an early date. Negotiations on the free trade deal, which started as early as 2004, have yielded many fruitful results, with agreement reached on a majority of issues concerning trade in goods.

An FTA would further strengthen their already close trade relations and inject new vitality into the strategic partnership between China and the GCC countries.