China and the Middle East seek a new future together, building on past strengths

Leading experts and scholars from home and abroad gathered in Shanghai to explore opportunities and challenges in deepening cooperation between China and the Middle East.

LEADING experts and scholars from home and abroad gathered in Shanghai over the weekend to explore opportunities and challenges in deepening cooperation between China and the Middle East while pushing through the Belt and Road Initiative (BRI).

The forum, “Belt and Road Initiative: Towards Greater Cooperation between China and the Middle East,” was sponsored by the Shanghai Academy of Social Sciences and the Brookings Doha Center.

Yang Fuchang

In his keynote speech, Yang Fuchang, former vice minister of the Ministry of Foreign Affairs and former president of the Chinese Association of Middle East Studies, pointed out that the history of Sino-Arab relations has been marked by cooperation and friendship on the basis of mutual support and respect, especially in issues concerning their core interests.

Thus, politically Sino-Arab countries have always had good relations.

Economically, China and the Arab states could be highly complementary, and this contributes significantly to the close ties between China and Arab countries.

The intensity of such ties is evidenced by numbers.

In 2010, China-Arab trade stood at US$145 billion. It had been growing steadily, reaching US$250 billion in 2014.

In 2016, China imported 380 million tons of crude oil, of which 150 million was sourced from Arab countries, accounting for 40 percent of the total.

Chinese exports to the Arab countries, which mainly consist of machinery and industrial products needed, account for half of the Sino-Arab trades. These figures speak volumes for the complementarity of China-Arab countries.

Soon after President Xi Jinping initiated the Belt and Road Initiative in October 2013, Yang visited Kuwait, Lebanon and Egypt, and he found that local officials and scholars had been eager to learn about details of BRI.

Explaining why the initiative is so appealing to these countries, Yang cited three reasons.

First, China has always been emphatic about development, on the belief that development is key to solving all problems. BRI has not been brought up just in view of the Chinese development, but is for the benefit of all countries involved, for common development helps build “a community of shared future.”

Secondly, the initiative has been conceived on the assumption of openness and equality, without any intention of having this idea imposed on others, hence the principle of achieving shared growth through discussion and collaboration.

Thirdly, in bringing up the initiative, there had been ample consideration of some countries’ lack of fund and technology, hence the setting up of the Silk Road Fund, which started at US$40 billion, with yet another 100 billion yuan (US$15 billion)added to the fund last year. This fund helps finance some countries’ development.

Yang dismissed the speculation that China has been taking advantage of the initiative in transferring its backward or polluting productive capacity abroad.

He illustrated the point by citing China’s high speed rail construction team.

Now with a high speed rail network of 20,000 km in total length, China could not well sustain its current building momentum in the future, thus it makes sense to dedicate some of its excessive building capacity to helping others countries with their railway construction.

Yang added that while the Middle East region had always been a pivotal juncture along the Silk Road, it is doubly so today. In the conception of BRI, there are six international economic corridors, and the third, China-Central Asia-West Asia Economic Corridor, concerned the Middle East.

Tarik Yousef

Tarik Yousef, director and senior fellow in Global Economy and Development at the Brookings Doha Center, emphasized the need for developing wholesome cooperation not only in economy, but also between research institutions, in identifying the challenges and the problems that would arise.

Yousef observed that cooperation, open dialogues and cultural exchages are the software that would allow BRI to be better understood, to be better assessed, and to better serve ultimately the interests of Middle East and that of China.

Yousef said if the forum was held 10 years ago, the challenges would be less formidable than they are today, when the Middle East is embroiled in geopolitical dislocations.

“In this context, the vision of the Belt and Road Initiative becomes especially important, especially relevant, not only for its economic objectives, but eventually as a stabilizing and normalizing force by emphasizing cooperation, stability that ultimately serve our collective interest,” he said.

“I think it is up to us in the Arab world and in the Middle East to articulate not only our response to BRI, but also organize ourselves to be partners at this turbulent age, where our goal is to serve the needs of development, that ultimately would serve broader objectives of stability and cooperation, and I think it is those sentiments and hope that ultimately brings us together,” he said.

He mentioned about a recent event in Rome MED 2017, whose theme was “Beyond Turmoil,” where noted American economist Jeffrey Sachs used the 20 minutes he had at the panel criticizing the US, and emphasizing the importance of the Belt and Road Initiative as a transforming agent for economics, infrastructure, trade and investment.

Enseng Ho

Enseng Ho, director of the Middle East Institute and Muhammad Alagil distinguished visiting professor of Arabia Asia Studies at the Asia Research Institute, National University of Singapore, after reviewing China’s engagement with the Muslim world, cited Quanzhou in Fujian Province as a “preeminent predecessor” of today’s Maritime Silk Road, where Muslims, Christians and Buddhists coexisted.

When China reentered the world market in the 1980s, the city was among the first to embrace foreign trade.

The Muslim network that existed in China are the long-term and renewable asset that could be studied, understood, and cultivated for the benefit of BRI.

The historical link and trust from there somehow resurface in very modern and contemporary development, Ho believed.

Another example is Yiwu in Zhejiang Province, known for its small-size manufacturers. The city has grown explosively partly because it serves as a link to the Muslim network, with small traders from Islamic world in east Africa coming there.

The local government has realized how the Muslim world represented a strategic opportunity and it knows how to seize the opportunity.

Dubai and Singapore also partly own their prosperity to their ability to leverage such networks.

China has already done some of the important work engaging the Muslim world through education, diplomacy, and trade. They should be encouraged to continue to expand their efforts.

“I think the next stage of China’s Belt and Road Initiative should contribute to building and extending a legal infrastructure of arbitration, harmonizing procedures across China with the Islamic world and the rest of the world, and extending legal structure into the financial and infrastructual building,” Ho observed.

Yang Guang

Yang Guang, director of the Institute of West Asian and African Studies, Chinese Academy of Social Sciences and Director of the Chinese Association of Middle East Studies, identified four areas where China’s ties with the Middle East could be promising.

One is petroleum, where China could expand cooperation with the Middle East countries in forging “a community of energy security.” As a result of the structural changes in global energy consumption, Chinese ties with the Middle East are becoming stronger.

The second is that China could harness the wave of reindustrialization now sweeping the Middle East.

The first wave of industrialization in the 1960s and 1970s ended with debts crisis. In this reindustrialization drive, where non-oil producers target labor intensive industries, while oil producers try to grow out of their dependence on oil, China is well equipped to help.

The third area is in infrastructure development. Existing infrastructure in the Middle East is below global average, and could not sustain its ambition to reindustrialize.

The fourth area is finance, as both China and Middle East are sufficient in fund.

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