Chinese Premier Li Qiang is strengthening ties with Saudi Arabia, the United Arab Emirates, including new energy

Chinese Premier Li Qiang returned from his visit to Saudi Arabia and the United Arab Emirates on Friday, having strengthened ties with both Gulf states.

Pledges for closer cooperation included the new energy sector, described by one Chinese analyst as “crucial” to the Middle East’s economy.

Li traveled to the UAE on Wednesday evening after completing a two-day visit to Saudi Arabia. He met with UAE President Sheikh Mohamed bin Zayed Al Nahyan in the capital Abu Dhabi the next day, with both leaders pledging to strengthen the comprehensive strategic partnership between their countries.

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According to a Chinese foreign ministry report, Li called for deeper cooperation in new energy, electric vehicles, high-end manufacturing, biomedicine, digital economy and other fields, and for strengthening investment collaboration in traditional sectors such as oil and gas. .

“The two countries should jointly realize a prospective aspect of emerging industries and future industries and cultivate more new economic growth points,” Li said during his first visit to the UAE since taking office.

His trip came three months after Sheikh Mohamed’s state visit to China and meeting with President Xi Jinping, when both sides pledged closer cooperation, including in cutting-edge technologies.

Cooperation between China and the United Arab Emirates, a US ally, has reached unprecedented heights in areas ranging from trade and investment to sensitive technology and defense, despite growing scrutiny from Washington.

According to data from the Chinese Foreign Ministry, the volume of bilateral trade reached a record 50 billion dollars in the first half of this year.

Li began his Middle East trip with a visit to Saudi Arabia, where he met with Crown Prince Mohammed bin Salman in Riyadh on Wednesday.

Li called for closer collaboration in traditional sectors such as petrochemicals and infrastructure construction, while expanding cooperation in emerging areas such as new energy, information and communications, and digital and green economies.

Middle East business specialist Wen Shaobiao of Shanghai International Studies University said Li’s visit focused on strengthening economic ties with two wealthy Gulf countries.

“China hopes that deeper economic cooperation between China and these two Gulf states can catalyze and drive such collaborations between China and the Middle East region,” Wen said.

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“Expanding electric vehicle (EV) cooperation would capitalize on China’s manufacturing strengths and expand its thriving EV industry chain further into the Middle East.”

Major Chinese EV companies such as BYD and Nio have already entered the UAE market. And last year, the UAE established the world’s largest single-site solar power plant – a flagship project under Beijing’s Belt and Road Initiative.

China has a marked trade surplus with the UAE, but growing Chinese investment is closing the gap. Last year, Chinese investment in the UAE rose by more than 16 percent to $1.3 billion.

This came as the UAE saw investment in China increase by 120%, accounting for 90% of Arab investment in the country.

The UAE has largely been seen as the first Middle Eastern destination for China’s new energy market – a booming industry that has been accused of “overcapacity” and targeted by the West for tariffs.

Li’s trip to Saudi Arabia also touched on new energy cooperation, a promising area Wen described as “essential” to the regional economy.

“Cooperation in the field of new and green energy is crucial, especially for the sustainable development and energy transition of Middle Eastern countries. China, which is a leader in the green energy sector with an extensive industrial chain, would bring substantial benefits to the region,” Wen said .

Chinese Premier Li Qiang meets with GCC Secretary General Jasem Mohamed Albudaiwi in Riyadh, Saudi Arabia. Photo: Xinhua alt=Chinese Premier Li Qiang meets with GCC Secretary General Jasem Mohamed Albudaiwi in Riyadh, Saudi Arabia. Photo: Xinhua>

China has been actively working to strengthen its influence and strengthen relations within the Gulf Cooperation Council (GCC) – made up of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates – while trying to secure a foothold through a free trade agreement. which have been under discussion for years.

Li’s trip to Saudi Arabia included a meeting with GCC Secretary General Jasem Mohamed Albudaiwi.

According to a statement from the Chinese foreign ministry, Albudaiwi said he looked forward to reaching an agreement on the China-GCC free trade agreement “as soon as possible.”

Wen said there are significant motivations for both China and the Gulf countries to conclude the agreement.

The Gulf countries aim to diversify their economies beyond dependence on fossil fuels, while the free trade agreement with China could be an exemplary project to illustrate the high quality of China’s Belt and Road strategy, Wen said.

“Given these incentives, trade negotiations are likely to accelerate soon.”

Addressing a UAE-China business forum during his visit to Abu Dhabi, Li called on both sides to seize the moment to enhance the quality of bilateral trade and economic cooperation.

“Companies from both nations should… capitalize on the solid and mutual commitment to bilateral cooperation by engaging in new opportunities brought by high-quality construction (belt and road projects),” Li said.

“This will further integrate both countries into global industrial and supply chains. In addition, by capitalizing on the close alignment of bilateral development strategies, companies can identify potential areas for future collaborations.”

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP Facebook and Twitter pages. Copyright © 2024 South China Morning Post Publishers Ltd. All rights reserved.

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