News Letter

THE NEW SILK ROAD: CHINA’ ENERGY POLICYAND STRATEGY IN THE MENA REGION

SBE, Vol.20, No.1, 2017

ISSN 1818-1228

Qatar University

light

manufactured

goods,

machinery

and equipment, vehicles, foodstuffs, and

engineering labour services

. Furthermore,

China has the capacity to export labour service

to Arab countries because of the relative

insufficiency of labour in these nations.

Therefore, China’s complementarity to Middle

Eastern states has made it a major trade partner

in the region.

From a Middle Eastern standpoint, China is a

huge market for oil exports. With the decrease

in oil demand after the global economic crisis

and the growing desire of Western states to

diversify their oil supplies, the GCC States

have found a great trading partner in China:

Saudi Arabia, Oman, United Arab Emirates

and Kuwait alone have collectively constituted

43% of Chinese crude oil imports in 2013

The GCC cluster owns some of the most

oil wealth in the world in conjunction with

relatively politically stable environments, an

appealing combination for Chinese interests.

From a Chinese standpoint, diversifying

China’s oil sources is essential: Russia, Central

Asia, Africa, and Latin America are all trading

partners with China. China is practicing oil

diplomacy, defined by Olimat as “the foreign

activities with explicit involvement of the

central government aiming to secure foreign oil

and gas resources or promote interstate oil and

gas business cooperation”

and has realized

the importance of diversifying the source of its

oil imports. Yet, despite trying to diversify its

oil imports by trading with Eurasia, the Asia-

Pacific region, and Africa, China is still very

61 Alterman & Garver, The Vital Triangle, China, The

United States and the Middle East, CSIS,Centre for

Strategic and International Studies, Washington DC. 2008,

Pg 66

62 EIA (2014)

63 Olimat Muhammad S., China and the Middle East:

From Silk Road to Arab Spring,

Reprint Edition, NewYork,

Rougtledge, 2015. Pp. 37.

reliant on the Middle East for crude oil. One

thing for sure, both parties wish to move away

from Western supremacy in the energy market.

Asia-and China in particular-has become

more reliant overall on Middle Eastern oil.

Consequently, this shift in oil demand from

West to East has created tensions between the

United States and China. In fact, the Asian

continent is expected to account for much

of the growing demand in the next decades,

and already, two-thirds of Saudi Arabia’s

oil exports go to Asia. As the United States

and other Western countries search for new

alternatives to oil consumption, Middle Eastern

oil-rich countries are looking for steady, long-

term demand. Asia and the Middle East have

consequently found a ground for cooperation:

while Asia wants to secure energy supplies,

Middle Eastern oil-exporting states are eager to

build a long-term relationship, ensuring regular

and constant oil supply. Consequently, by

expanding ties with China, Saudi Arabia, and

Iran and Sudan to a lesser extent, diversified

their international exports and reduced their

dependence on Western powers, especially the

United States

V. Sino-Saudi Oil Policy

Although Chinese firms are participating

actively in oil projects in other countries such

as Kuwait, Oman, Qatar, Syria, the UAE,

Yemen, and Iraq, their focus is mainly on two

major oil producing countries: Saudi Arabia

and Iran

. China is well positioned to build an

energy partnership with Saudi Arabia because

unlike other oil-producing states in the Middle

East, Saudi Arabia is well-established and well-

resourced in oil industry. Saudi Arabia needs

steady consumers and China provides a great

64 Sager, Abdulaziz. 2010. ‘GCC-China Relations:

Looking beyond Oil-risks and Rewards’, in Abdulaziz,

Sager, Geoffrey, Kemp (eds), China’s Growing Role in the

Middle East. Washington, DC: Nixon Center, 2010, Pp. 20.

65 Hongtu (2010)