Visitors to Nakheel's Ibn Battuta mall in Dubai can retrace one of the journeys made by the celebrated 14th century Arab explorer after whom the shopping centre is named. Entering the world's largest single-floor mall, they start in a section themed after Tunisia where Ibn Battuta was born, pass through Andalusia, Egypt, Persia and India and finally finish in China, a retail zone complete with a life-size model junk.
As the mall shows, China has once again become irresistibly alluring to the people of the Middle East. Arabian history dwells on the achievements of Omani sailors who reached China in the 8th century AD. No one has done more than Dubai to revive a connection that for a millennium brought Chinese ceramics, silk and tea to the Middle East. Its two-way trade with Hong Kong is about $12,000 million a year and growing. So there was eager expectation when one of the largest Chinese business delegations to the region arrived in Dubai after visiting Kuwait and Qatar.China is responsible more than any country for the new Gulf boom. The oil price has almost tripled since 2003, but China has nevertheless bought much more crude.Chinese demand is about 6.5 million barrels a day and growing by 8-10 per cent a year. In 2006, more than one-third of the world oil consumption increase was due to China.It is forecast to overtake the US in 2030 to become the world's largest oil importer. Almost 60 per cent of China's oil imports come from the Middle East. This will rise to more than 70 per cent in a decade.China is everyone's top export market. The Middle East also sees it as a source of skills.Saudi Aramco has a gas exploration deal with the China Petroleum & Chemical Corporation (Sinopec) as part of the kingdom's revised gas initiative. China State Construction Engineering Corporation worked on Palm Jumeirah and other major Dubai projects.Gulf investors love the idea of investing in China. The Kuwait Investment Authority became a cornerstone investor in the Industrial & Commercial Bank of China (ICBC) when it was floated in autumn last year. Some now believe in a new partnership between Gulf capital and Chinese brainpower to exploit the world's most promising market.The fourth factor drawing the Middle East to Beijing is politics. Of the UN Security Council's five permanent members, China has the least contentious Middle East record, although it briefly backed anti-government guerillas in Oman in the 1970s. Beijing has been consistently sympathetic to Arab concerns and refused to back the US' Iraq invasion.The four factors make a compelling combination. No wonder they were out in force at a China-Middle East conference held in Dubai in early September and attended by the Chinese visitors. But there was little new to hear. The ICBC announced plans to set up in the region, the visitors said they would be back and that was all.Seasoned Sino-Arab watchers were not surprised. The conference learned that the GCC's present account surplus in 2006 was $176,000 million. But China's was even bigger at more than $200,000 million. China does not need Gulf capital.David Eldon, chairman of the Dubai International Financial Centre Authority, and based in Hong Kong, told the conference China is the most difficult place in the world to do business. The Chinese realities are illustrated by the delays affecting the $5,200 million Saudi Basic Industries Corporation (Sabic) refinery and petrochemicals joint venture with Dalian Shide. Sabic has warned it may pull out. It echoes similar delays in plans for a joint venture refinery and petrochemicals project backed by Saudi Aramco.China's leaders are overwhelmingly preoccupied by the world's most radical modernisation programme. There are nearly 50 Chinese cities with 1 million people or more. The scale of what is happening was highlighted in a speech in Dubai by Yang Kaisheng, vice-chairman of
A MEED Subscription...
Subscribe or upgrade your current MEED.com package to support your strategic planning with the MENA region’s best source of business information. Proceed to our online shop below to find out more about the features in each package.