Negotiations are ongoing between Gulf Co-operation Council (GCC) countries and China to reach a free trade agreement, an official of the Federation of the GCC Chambers (FGCC Chambers) said.
Speaking to Gulf Times on the sidelines of a press conference at Qatar Chamber yesterday, FGCC Chambers secretary-general Abdulrahim Hasan Naqi said due to the “positive response from both sides,” a free trade agreement could be signed either this year or in 2017.
“There have been a number of negotiation rounds so far, during which several topics were discussed. Both parties have achieved good results in those rounds, and are exerting efforts to complete the discussion of all topics and issues related to the agreement,” Naqi said in a speech.
Naqi noted that there are “vast horizons” for the Chinese economy to benefit from the free trade agreement “especially that China has become a point of interest for the whole world, including the US.”
According to Naqi, the GCC can benefit from the Chinese economy, which, he said, has been growing since 1978 at an annual rate of 6% to 13%.
“This big growth needs more consumers for raw materials and strategic commodities in order to maintain balance and momentum. Hence China is in need of external markets to import its products and investments to expand its financial and economic presence, and to utilise its economic leap. Therefore, the countries of the GCC can provide the main components for the Chinese economic strategy in terms of oil and trade markets,” he explained.
Naqi said the free trade agreement will provide mutual benefits for both the GCC and China.
“China may deliver limitless technical and industrial support to GCC countries, which have large capitals that are able to change their economies into industrial economies, provided that some issues have to be solved in this regard,” he said.
Naqi stressed that China, through its economic sectors and markets, “can be a perfect retreat for the GCC capitals and investments, especially at the time of financial surplus.”
“This will mean big profits if such surplus is invested in a growing and active economy like the Chinese. China can also extend its management and economic experience to achieve development and reduce unemployment, manage investments, and develop higher education and health systems,” he emphasised.
Naqi said the FGCC Chambers is working for the development and enhancement of GCC-Chinese relations.
“We have also called for expediting the establishment of the free trade zone between GCC countries and China, commending the step that has been taken by both parties to resume negotiations on the free trade project that was launched in Riyadh early this year,” he said.
‘Growth seen in GCC-China trade’
By Peter Alagos/Business Reporter
Citing political stability, an official of the Federation of the GCC Chambers (FGCC Chambers) said that the trade between the Gulf Co-operation Council region and China has increased from 2010 to 2014.
Quoting figures from the Statistical Centre for the Co-operation Council for the Arab Countries of the Gulf (GCC-Stat), FGCC Chambers secretary general Abdulrahim Hasan Naqi said during the four-year period, there has been a surplus in the trade balance of the GCC from $19bn in 2010 to $45bn in 2014.
Naqi, who spoke to media at Qatar Chamber yesterday, said the total value of GCC exports to China was $101bn in 2014 or 11.7% of the total value of the GCC exports to the whole world for the same year.
“The total value of GCC exports to China witnessed an increase from 2010 to 2014 with an annual growth average of 17.8%. The five most important national commodities exported from the GCC to China in 2014 were fuel products and derivatives, organic chemical products, industrial plastics, and aluminium industries,” he said.
Naqi said mineral fuel and derivatives topped the list of 2014 exports with a value of $87bn or around 86.7% of the total GCC exported commodities to China in the same year.
Total GCC imports from China in 2014, Naqi said, amounted to $56bn or an 18.4% increase against the $47bn recorded in 2013. GCC imports, he also said, represented 11.8% of the region’s world imports in 2014 against 10.2% in 2013. GCC imports from China had increased by 69.2% in 2014 compared to 2010.
The major GCC imports from China in 2014 were machinery, electric and electronic devices, domestic and household machines, metal industries, steel, furniture, and electric lightings, he said.
“The six countries of the GCC have become the eighth trade partner to China, the eighth biggest market for Chinese products, and the ninth largest market for Chinese exports.
“Both parties have achieved a positive co-operation in the fields of contracting, energy, and investment, in addition to the big demand on costumes, textiles, electronics, and telecommunications, as well as the Chinese demand on oil, gas, and petro-chemicals,” Naqi said.
He said while no exact figure was available, the volume of GCC-Chinese investment was estimated at $70bn in 2014.
“Since the early 1990s, China has signed hundreds of investment agreements with GCC countries, which reflects China’s interest to be a major trade partner with this region,” Naqi added.