context: PRC-GCC (Gulf Cooperation Council) FTA (free trade agreement) began in 2005 and paused for six years until it was resumed again in 2022. The tenth round of negotiations took place in 2022, covering goods, services, investment, rules of origin, customs and trade facilitation. The PRC and GCC are complementary in trade. The PRC was GCC's biggest trade partner in 2020 and total trade between the PRC and GCC reached C¥ 1,504 bn. Geopolitical friction, recently intensified by the Israel-Palestine conflict, may call for greater caution against trade disturbances in the region.
The PRC-GCC (Gulf Cooperation Council) economic and trade ministerial meeting was held in Guangzhou on 22 October. According to MofCOM (Ministry of Commerce), the two sides reached consensus on trade multilateralism, bilateral investment, supply chain cooperation, connectivity, energy transition and a joint declaration on deepening economic and trade cooperation.
The PRC side mentioned its commitment to
- sign an FTA (free trade agreement) with GCC as early as possible
- boost bilateral investment by
- furthering the work of PRC-GCC Joint Investment Commission
- supporting cooperation between sovereign wealth funds from both sides
- promote industrial synergy by
- strengthening the 'oil and gas plus' model
- encouraging to follow market principles while investing in industries
- foster regional connectivity
- ports, aviation, communications and pipelines
- green development
- transition to renewable energy sources like photovoltaic, wind, nuclear and hydrogen
- developing new energy vehicle industries such as power batteries and smart charging stations
The GCC has been more active in FTA negotiations recently, contends Cui Fan 崔凡 University of International Business and Economics professor. The GCC signed an agreement with Japan to resume FTA negotiations in July 2023. There were also talks of starting a New Zealand-GCC FTA in September 2023.
Middle Eastern countries like Saudi Arabia are important in the current international trade system, argues Cui, noting that closer trade relations with them may have a critical 'big-picture' impact on the PRC.
Cui notes that the PRC relies on imports for energy and raw materials and needs to find reliable sources for these goods to stabilise prices. He points to Middle Eastern countries as viable candidates in this regard.