China has overtaken the West as the largest trading partner with countries in the Gulf region for the first time in 2024, with the trade projected to grow even larger, according to a report launched on Thursday by Asia House in London.
The think tank calculated that trade volumes between China and the six countries in the Gulf Cooperation Council, namely Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates, rose 14.2 percent to $257 billion in 2024.
The number surpassed the Gulf's trade with the United States, the United Kingdom, and countries in the Eurozone combined, which slipped by around 4 percent to $256 billion, in the same period.
The report, titled The Middle East Pivot to Asia, also predicts that Gulf-China trade will widen its lead over the West. It said Gulf-China trade is expected to be worth $375 billion by 2028, with the gap growing to $75 billion.
Author of the report Freddie Neve said: "Amid deep disruption to global trade, Gulf economies are expanding their relationships with Asia faster than with any other region."
The report highlighted that Chinese energy imports remain a vital anchor in the trade relationship, with long-term Gulf-China energy deals and Gulf investment in downstream refining and petrochemicals on the Chinese mainland.
'Pivot to Asia'
In the bigger picture, trade between the Gulf and Asia has surged to record levels, underlining the region's accelerating "pivot to Asia". The report finds that total Gulf-Asia trade reached $516 billion in 2024, up 14.4 percent from the previous year and roughly double the value of Gulf-West trade $256 billion.
Michael Lawrence, chief executive of Asia House, said: "We have seen the establishment of deeper economic, diplomatic, and commercial relationships. That trend has now reached an inflection point."
The report stated that Gulf and Asian financial markets will become more integrated, leading to increased cross-border flows and enhanced political engagement, and trade in the renminbi could rise as firms in the region seek to improve trade efficiency.
Greater China-Gulf trade denominated in renminbi could enhance the Gulf states' middle power strategy, providing them a lever to navigate geopolitical risk via currency diversification, and could also reduce trade and investment costs, the report said.
xingyi@chinadaily.com.cn