Delegates push for closer ties between GCC and China

Investment activity between China and the Gulf is more important than ever, due to the global credit crisis and increased protectionism by Western states, according to speakers at the China-Middle East Investment Forum held in Dubai today.

HE Dr Omar bin Sulaiman, governor of the Dubai International Financial Centre (DIFC), said that annual trade between the GCC and China currently stands at around $45 billion, but added that this figure is likely to increase once a free trade agreement is finalised between the states.

Abdulaziz Sager, chairman and founder, Gulf Research Centre, said that both regions are extremely liquid, with the GCC holding a cash surplus of $186 billion this year, and China's surplus at $238 billion.

"What is happening, unfortunately, is that we are both sending it to New York," he said.

However, the panel agreed that the credit crisis in the US and European markets is likely to increase activity in Middle East and Asian capital markets.

"We're seeing enormous potential for GCC investors who have tremendous surpluses to invest in China's markets. Both regions face barriers to investment outside," said Dr Nasser Saidi, chief economist, DIFC Authority.

The speakers agreed that Chinese investment would be crucial in helping Middle East countries develop infrastructure such as transport links and utilities, while China would need oil and gas exports from the Gulf to help fuel its growing industrialisation.

China currently accounts for 8% of global oil demand, but between 2002 and 2008 will account for 34% of global oil demand growth, Dr Jun Ma, managing director and chief economist for greater China at Deutsche Bank, told delegates.