As China sharpens its focus for the BRI, and Mena economies redouble their diversification efforts, new synergies are emerging, making the region the next one to watch for the historic project. “Everything [between China and Mena] is growing at double-digit rates: trade, foreign direct investment, tourist arrivals, projects and joint ventures,” says Florence Eid-Oakden, chief economist at Arabia Monitor, a research and strategy firm. “This is mutually beneficial for China and the Arab world, as it is the confluence of the BRI and the economic diversification underway in Mena. It has all come at the right time, because if either side were doing this a couple of years earlier, the momentum would not be what it is now.”
This momentum is being driven by several initiatives which have blossomed across the region as economies seek to lessen their dependence on hydrocarbons and introduce far-reaching economic reforms. Government programmes, from Smart Dubai 2021 to Saudi Arabia’s National Transformation Programme 2030, Morocco’s Mohamed VI Tangier Tech City and the China-Egypt Suez Economic and Trade Co-operation Zone, have seen Chinese technology firms increasingly look to Mena, while partnerships such as that between Dubai-based lender Mashreq and Chinese mobile payment platform Alipay have further supported Chinese integration into the region.
Even in the oil space, diversification in the Sino-Arab relationship is becoming apparent, as Eid-Oakden explains: “The foundation of the relationship has always been energy. Let’s not forget that. It continues to dominate the relationship because it constitutes a considerable amount of bilateral trade. But we are also observing very interesting trends. For example, while China is the biggest oil buyer for Saudi Arabia, Saudi Arabia is also investing a lot into the downstream business in China and is doing so via a number of joint ventures with a couple of Chinese provinces that are the most economically prosperous.”
Mena’s many and varied economies, at different levels of development and with different infrastructure needs, present a unique opportunity to Beijing, particularly as US influence in the region wanes. For its part, China is finding a mostly warm welcome.