China reopened its doors after three years of
self-imposed exile more than a month after abandoning its zero-COVID policy.
Many Chinese people think the worst of the pandemic is behind them despite the
fact that it is infecting millions and spreading like a wave over the nation.
The economic landscape reflects this upbeat
view. China's GDP grew by about 3% last year, which was the worst rate in four
decades. However, the government anticipates that once firms recover, overseas
trade will dramatically rise and growth will resume.
Significant repercussions of China's economic
growth can be felt throughout the rest of the world, particularly in the Middle
East.
The demand from the Chinese market will
increase first and foremost, assuaging those analysts worried about a worldwide
slump. More than 40% more energy resources, such as coal, natural gas, and
crude oil, were imported into China last year, making up about 18% of all
imports. The demand for energy products will only increase if the Chinese
economy is to regain its post-COVID productivity, both for export and domestic
consumption.
It is only a matter of conjecture how this
requirement might be satisfied. Saudi Arabia was China's top oil supplier in
2021, but Russia took up that position in April 2022. (The two nations
alternated in the top rank prior to the conflict in Ukraine.) Price had a role
in the choice.
However, China uses a variety of methods to
measure expenses. Beijing may become more moderate and cautious in its energy
trading with Russia was given China's desire to retain diversity in its crude
oil supply and President Xi Jinping's goal in enhancing relations with the
United States. This would create an opportunity for Gulf suppliers.
This optimistic view of the Middle East-China
energy trade is consistent with Beijing's stated commitment. China declared on
December 9 that it would increase its purchases of crude oil and natural gas
from Gulf nations during the following three to five years. Leaders and
representatives from Bahrain, Kuwait, Oman, Qatar, and Saudi Arabia
participated in the first China-Arab Summit, which was held in Saudi Arabia.
More than just navigating an economic recovery
is at the root of China's resurging need for Middle Eastern oil. In order to
balance out dirtier fuels like coal as China works to fulfil its "double
carbon" goal, which calls for carbon emissions to peak by 2030 and becomes
carbon neutral by 2060, it will need to import oil and gas. In 2021, coal
continued to account for 56 per cent of China's enormous energy consumption,
with cleaner energy sources accounting for around 26 per cent.
China is seeking to deepen its economic ties
with the Middle East, as seen by Xi's recent trip to the Gulf, and this trend
is only anticipated to pick up speed.
Beyond conventional energy commerce, China
also wants to cooperate with nations in the region in the area of clean energy.
Cooperation on civil nuclear power is an attractive area that Beijing is
pursuing with Saudi Arabia and the United Arab Emirates.
China, in particular, has recently expressed
renewed interest in nuclear energy since the start of the conflict in Ukraine.
China is laying the groundwork for a global expansion of its third-generation
nuclear reactors; Gulf nations are prospective customers. Other regional projects
are apparently in the pipeline, and China and South Korea are already vying
with each other to construct two nuclear reactors in Saudi Arabia.
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