Countries in the Gulf are keen to make the most of China’s Belt and Road Initiative (BRI) — an ambitious mega-project that plans to boost connectivity and cooperation between East Asia, Europe and East Africa.
Bahrain’s minister for transportation and telecommunications said the Gulf, with its central location in the BRI, was a prime market for China and vice versa.
“The Belt and Road Initiative is ambitious and broad in its nature … but by interacting with each other we can unlock potential opportunities,” Kamal bin Ahmed Mohammed told an audience at the Gateway Gulf Investment Forum on Wednesday.
“For us in the region, we think that China always will look for a new market for their services, they are manufacturing goods, every day they’re increasing their production and we can be the market for these goods. We also have a lot of projects (going on) and … There will be a need for Chinese goods and products,” he said.
“We see a great opportunity for the GCC (Gulf Cooperation Council) countries, the infrastructure already exists, already we have the routes and the (trade) corridor available, a politically stable region, a resilient financial sector, and there are a lot of areas in which both regions, China and the GCC, can benefit from each other.”
“The GCC has the ports, airports, the infrastructure is all ready, it’s a win win for both sides,” he added.
As well as China using the region as a remote manufacturing platform, allowing them to be closer to their markets, the minister said the Gulf could readily supply China with a stable supply of oil and gas.
Another speaker on the panel, Yusuf Abdalla Alireza, the founder and CEO of ARP Global Capital, an investment management firm based in Dubai, said the “obvious answer” on how the region could benefit from China’s presence in the region was oil and commodities, but he added that there were other advantages too.
“China became the largest importer of oil last year surpassing the U.S., but China has actually been the largest importer of oil and products since 2013. It’s also become the second-largest importer of LNG (liquefied natural gas) last year and the growth rate is extraordinary.”
“But there’s a lot of other opportunities such as infrastructure … In addition to that there’s tech. There’s two centers of tech in the world — Silicon Valley and Shenzhen — so we should be looking west and east,” he said.
The recreation of an old trade route is not to everyone’s liking, with many pointing out that countries along the route are falling into debt in order to pay for the large infrastructure projects envisaged by the BRI. There is also debate over whether the BRI is solely an economic strategy, or one designed to spread China’s political influence throughout the world.
“I think it’s a bit of both,” Alireza said but he believed they were complimentary. “I don’t think they have to conflict with each other, they can complement each other.”
Defending the Belt and Road, Xiao Fu, head of global commodities strategy at the Bank of China International, said that the initiative was in keeping with the ethos of the United Nations.
“The important mission of the Belt and Road is consistent with the UN’s 2030 vision to promote a balanced and sustainable global growth so its very useful and instrumental in facilitating global growth. The GCC has a fundamentally complimentary nature with China … A lot of GCC countries are looking to send their oil eastwards, so there is a complimentary nature and I do see more cooperation going forward.”
Another Chinese guest, Song Dongsheng, the president of PowerChina International, said the Chinese government was investing a lot in countries and had not encountered resistance.
“We meet very little resistance when we are working in more than 100 countries, we build, we invest, we finance, we invest in roads, power plants, water supply — all these projects are very necessary to these countries so we are doing something good. The local people and local government are welcoming us everywhere so I don’t see any risk,” he said.