China, Arab Countries Target Energy Sector in Trade Plan

Location: Beijing
Author: Ellen J. Silverman
Date: Friday, June 2, 2006

China and the Middle East will target the energy sector in an effort to double trade volumes over the next few years. In an agreement signed on the final day of the China-Arab Cooperation Forum, Beijing and the 22 Arab League members would begin holding meetings on oil issues as part of an expansion of ties.

"The two sides attach importance to energy cooperation, particularly the cooperation in the sectors of oil, natural gas and renewable energy," said a document outlining the forum's plans for 2006 to 2008. Mohammed Hussein al-Shaali, state minister for foreign affairs of the United Arab Emirates and a co-chair of the forum, told reporters there was a common target to double bilateral trade to 100 billion dollars by 2010. Trade between China and the 22 oil member states of the Arab League last year totaled 51.3 billion dollars.

Arab League Secretary General AIn amr Mussa, who also co-chaired the forum along with Chinese Foreign Minister Li Zhaoxing, was even more optimistic about the pace of economic development with energy-hungry China. "This represents just a beginning and we hope it can be even greater," Mussa said of current trade levels between the Arab world and China, adding he hoped volumes could double within two to three years.

China is the world's second largest energy consumer behind the United States and has already worked extremely hard in recent years to secure energy resources from the Arab world and the Middle East. Fifty-eight percent of China's oil imports currently come from the Middle East, according to the Washington-based Institute for the Analysis of Global Security. But, with domestic demand increasing by about 15 percent annually as its population of 1.3 billion people has become increasingly wealthy, it has made no secret of the fact that it needs more oil and gas from Arab nations. Saudi Arabia is already China's biggest crude supplier, exporting 22.18 million tons last year.