Other BriefingsChina’s Total Middle East and Africa Trade Up To US$1.63 Trillion
Sarmad Lone, the Regional Head of client coverage, corporate, and commercial and institutional banking in Africa, the Middle East and Pakistan at Standard Chartered has said that China’s trade and investment links with Africa and the Middle East have become deeper and increasing mature, with Chinese enterprises active in all sorts of sectors, ushering in more development opportunities for other global investors.
This is due to multiple drivers including common values such as an environment of encouragement for free trade and innovation and promoting economic growth, he added.
“We increasingly see more cooperation between Chinese businesses and businesses of the Middle East and Africa,” Lone said, adding that free trade and free movement of goods and capital have always worked to benefit the countries and companies involved.
“What we see is that a lot of times, companies and countries are in need of solutions and many times the best solutions are coming from Chinese corporates,” he said.
China-Middle East trade volume nearly doubled over the 2017 to 2022 period, from USD262.5 billion to USD507.2 billion, according to Chinese Customs data. China’s 2022 trade with the Gulf Cooperation Council (GCC) nations reached just shy of US$1 trillion, while trade with other Middle Eastern nations not part of the GCC, nor in Africa yet including Iran, Israel, Jordan and Turkiye amongst others add another US$40 billion.
The Middle East overall is the fastest growing trading partner to China in 2022, up 27.1% year-on-year, compared to ASEAN at 15%, the European Union at 5.6%, and the United States with a 3.7% increase.
Trade volume between China and Africa also surged by 14.5% on a yearly basis in 2022 to almost CNY1.9 trillion (US$264 billion).
China is currently the largest trading partner for many major economies in the Middle East and Africa, including Saudi Arabia, the United Arab Emirates, Egypt, and South Africa.
In the Middle East, China is discussing a Free Trade Agreement with the Gulf Cooperation Council that when agreed, will further boost regional multilateral trade. The GCC’s dominant partner is Saudi Arabia – we discussed the China-Saudi trade dynamic earlier this week here.
In terms of Africa, Beijing was influential in helping the pan-African countries agree to the African Continental Free Trade Agreement (AfCFTA) which eliminates 95% of all intra-African tariffs. This means that sourcing can take place on a pan-African basis with component products then worked on in a suitable economic zone for processing and final production. Chinese businesses have been very busy investing in Africa to take advantage of this.
Source: China Daily with additional commentary by Chris Devonshire-Ellis
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