For decades,
China’s economy has been the
engine of global growth. Now, with this machine slowing down and Chinese
leaders expressing uncharacteristic concern, the international community is
left to wonder: How will China’s malaise affect the rest of us?
اضافة اعلان
In theory, China’s decreased economic
activities, including consumption, should translate into reduced demand for
foreign raw materials and products. This will be bad news for resource-rich
countries and
export-oriented economies alike.
Given the reliance on energy exports by
oil-producing states, it might seem inevitable that China’s economic slowdown
would eventually translate into bad news for the
Middle East. And yet, the
complex and diversified relationship between China and the region makes this
conclusion too simplistic. Several reasons stand out.
First, reduced economic activity doesn’t
immediately or always translate into slowdowns in energy imports. At 3 percent,
China’s economic growth in 2022 was the lowest since the country’s reform and
opening period began in 1979. But China’s crude oil imports last year – 508
million tons – were down only 0.9 percent from the previous year.
Moreover, among the 48 countries that
exported oil to China in 2022, Saudi Arabia was the largest (topping even
Russia, which increased exports to China following the invasion of Ukraine).
China’s crude oil imports from the Kingdom – 87.5 million tons – were roughly
the same as the year before.
Based on data collected by China’s customs
agency, Chinese oil imports from Saudi Arabia and the United Arab Emirates
increased by 5 and 9 percent respectively between January and July this year
compared to the same period in 2022. While oil imports from Saudi Arabia
decreased by 12.4 percent in July compared to June, the overall Chinese demand
for Middle Eastern oil remains strong. This trajectory is likely to continue as
China reduces coal consumption to meet its climate change goals.
Second, with fewer resources available from
its own sources, China will be more eager to attract foreign investment to keep
its economy moving. This is particularly true in China’s downstream energy
investments.
For instance, in March, Saudi Aramco
announced two major investments in China. A new $10 billion facility in Panjin
will have the capacity to refine 300,000 barrels a day and produce 1.65 million
tons of petrochemicals annually.
Another project, between Aramco and
Zhejiang province, will enable the Saudi oil major to acquire a 9 percent stake
in Zhejiang Petrochemical, an integrated refinery and petrochemical complex in
the city of Zhoushan that churns out 800,000 barrels of product daily. The move
reinforces Aramco’s commitment to positioning itself as China’s main energy
partner and underscores China’s desire to introduce foreign investment to boost
its domestic supply.
It’s no secret that China’s flagging
economy, fueled in part by declines in consumer spending during the
COVID-19 pandemic, has hurt China’s Belt and Road Initiative. But BRI spending trends
vary by region and by country. While construction spending and investments
dropped by 44 percent and 65 percent, respectively, between 2021 and 2022 in
Sub-Saharan Africa and West Asia, Arab and Middle Eastern countries actually
saw a major expansion in China’s economic engagement, doubling by 21 percent
during the same period.
These figures suggest that countries in the
Middle East could weather China’s economic slowdown and even expand their share
of China’s overseas spending.
China will be looking to engage in specific
sectors and to do so largely based on the health of bilateral relations. With
ties between the United States and China strained, and as
Western governments warn against doing business with Chinese investors, Middle Eastern states
emerge as favored partners.
For now, Sino-Middle East trade is
relatively narrow, focusing almost exclusively on energy. But as countries like
Saudi Arabia and the UAE attempt to diversify their economies and transition
from a reliance on oil, there will be new areas of synergy with China,
including on infrastructure development, new energy resources, and digital and
information technologies.
After decades of focusing only on oil,
China and the Middle East’s biggest economies are rediscovering each other in
their search for political alignment and economic opportunity.
For China and its Middle Eastern partners,
long-term trends will defy temporary economic constraints. Although China’s
economic slowdown will bring many global challenges, in the Middle East, at
least, the convergence of interests should make the pain easier to bear.
Yun Sun is director of the China program
and co-director of the East Asia program at the Stimson Center in Washington.
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