The Regional Views series are thematic papers from Arabia Monitor aimed at identifying and analyzing factors behind medium to long-term economic trends shaping the region. Arabia Monitor’s analysis draws conclusions that help businesses and investors get ahead of the curve. As a firm staffed by Middle Easterners, we focus on insight rather than standard analysis.
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Growing ties between MENA and China, two economies linked by hydrocarbon-related trade and investment, could prove a blessing to Middle-Eastern economies striving for diversification and job creation. China is importing a greater share of its oil from MENA, while MENA is exporting a greater share of its oil to China, a pattern we expect to persist as growth continues to shift eastward. This trend is only a resumption of a centuries-old interdependence: the Silk Route is being re-established rather than invented.
– China’s food-import bill has grown seven-fold in the past decade, and the MENA region’s main food exporters are set to capitalize on China’s expected import needs. We also point to further trade synergies in agriculture and industry, with Egyptian and Moroccan exporters well-positioned.
– Opportunities in the non-oil sector will likely grow in importance, as Chinese investors look to access the MENA region’s consumer base, its next driver of growth. Direct investment will be necessary to reach this growing consumer market more easily, provided a re-calibration of tariffs is undertaken to incentivize intra-regional clients. Might this be the key to accelerating diversification in MENA?
– The composition of China – MENA trade has largely mirrored that of world – MENA trade, with MENA oil exporters accounting for the largest share of trade with China. Oil importing countries, while sustaining a deficit with China, are positioning themselves as providers of high-value added services for those seeking a gateway to the region.
China, India, Morocco, Algeria, Egypt
Agriculture, Trade and Industry, Oil & Gas
1. Oil, first and foremost
2. Trade potential: A wide range of opportunities
3. FDI: Small investments for China, with sizeable impact on MENA
4. What is the impact of Chinese investment on job creation?