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Tenth Ministerial Meeting of the Arab-Chinese Cooperation Forum in Beijing: diplomatic and economic news

Over the past four years, the depth of Sino-Arab cooperation has deepened significantly and rapidly. Against the backdrop of the United States' attempt to strategically withdraw from the Middle East, the Arab world continued to increase its autonomy and seeks to cooperate with it. China, Russia and other large countries subject to “Belt and Road”, “OPEC+” and other regulatory frameworks have clear intentions of multiple checks and balances and maximization of interests

According to the Ministry of Foreign Affairs website, the 10th Ministerial Meeting of the China-Arab States Cooperation Forum was held in Beijing on May 30, 2024.

This is the 20th edition of the conference, which is being organized again after four years.

The conference was of a very high standard. Chinese President Xi Jinping attended the opening ceremony along with four Arab heads of state, including King Hamad of Bahrain, Egyptian President Sisi, Tunisian President Said and United Arab Emirates President Mohammed, who were visiting been to China.

On the morning of May 30, President Xi Jinping attended the opening ceremony of the 10th Ministerial Conference of the China-Arab States Cooperation Forum at the Diaoyutai State Guesthouse in Beijing and delivered a keynote speech. This is a group photo of Xi Jinping with King Hamad of Bahrain, Egyptian President Sisi, Tunisian President Saied, UAE President Mohammed, Arab League Secretary General Gheit and 22 heads of Arab delegations. Photo by Xinhua News Agency reporter Huang Jingwen

President Xi Jinping delivered a speech titled “Deepening Cooperation, Carrying Forward the Past, and Accelerating the Construction of a Chinese-Arab Community with a Shared Future.”

The meeting produced three final documents, namely the Beijing Declaration, the Action Plan of the China-Arab States Cooperation Forum for 2024-2026, and the Joint Declaration of China and the Arab States on the Question of Palestine. During the meeting, China also signed a series of bilateral and multilateral cooperation documents with participating countries and the Secretariat of the League of Arab States.

The significance of this conference and its impact on future Sino-Arab relations

This year marks the 20th year since the start of the China-Arab States Cooperation Forum (CASCF) ministerial meeting.

On January 30, 2004, China and the League of Arab States jointly announced the establishment of the CASCF.

On September 14, 2004, the first ministerial meeting of the Forum was held at the headquarters of the League of Arab States in Cairo, Egypt.

As China-Arabia relations have intensified in recent years and bilateral trade has increased, the China-Arabia Cooperation Forum has taken on an increasingly high profile.

The ninth ministerial meeting of the Arab States-China Cooperation Forum was held online on July 6, 2020 due to the epidemic.

Then, on December 9, 2022, based on the previous China-Arab States Cooperation Forum, the first China-Arab States Summit was held at the King Abdulaziz International Conference Center in Riyadh, the capital of Saudi Arabia. The summit issued the "Riyadh Declaration of the First Sino-Arab Summit", announcing that China and the Arab states agreed to make every effort to build a Chinese-Arab community with a shared future for the new era.

This year we continued our previous tradition, and after four years, we again held the ministerial meeting of the China-Arab States Cooperation Forum.

Compared to previous forums, the biggest difference this time is that many national leaders attended this ministerial meeting.

In fact, the heads of state present at the meeting were also present at the opening ceremony, including King Hamad of Bahrain, President Sisi of Egypt, President Saied of Tunisia and President Mohammed of the United Arab Emirates. This is an unprecedented event.

It can be said that over the past four years, China-UAE relations have continued to develop under the leadership of the head of state, and cooperation has deepened.

The last four years, in fact, have been a period of rapid development of Sino-Arab economic and trade cooperation, in particular investments in China from Saudi Arabia, the United Arab Emirates and other Arab countries.

According to statistics, Arab countries' investment in China was only $110 million in 2021, with an increase of $1.05 billion in 2022, a nearly 10-fold increase year-on-year, and an increase of 2, US$3 billion in 2023. Annual new investments of more than US$2 billion approaches or even exceeds the scale of Chinese investments in Arab countries in recent years.

It took only three years for Arab countries' investments in China to go from zero to becoming comparable to Chinese investments in Arab countries.

Along with the rapid increase in investment in China by the Arab world, the direction of investment by Arab countries in China is also increasing rapidly.

In terms of traditional energy, since 2023, the Saudi national oil company Saudi Aramco has invested in acquiring shares of many companies in Zhejiang, Jiangsu, Shandong and other places. Recently, Saudi Basic Industries Corporation, the largest petrochemical company in the Middle East, also announced that it had completed a 44.8 billion yuan ($6.4 billion) investment in a Chinese joint venture.

In terms of technology and new energy - not to mention the fact that in recent years countries such as Saudi Arabia and the United Arab Emirates have actively sought to get rid of their dependence on traditional energy and pursue new points of economic growth - they have been Cooperation agreements have been signed between several Chinese technology and energy companies, and many projects are worth hundreds of millions of yuan.

In fact, at the end of the first quarter of 2024, there are 27 A-class companies heavily held by the Abu Dhabi Investment Authority (which appear in the list of the top ten tradable shareholders), with a total market value of approximately 11,289 billion yuan , an increase of more than 10% compared to the end of 2023.

Over the past four years, the depth of Sino-Arab cooperation has deepened significantly and rapidly. Against the backdrop of the United States' attempt to strategically withdraw from the Middle East, the Arab world continued to increase its autonomy and seeks to cooperate with it. China, Russia and other large countries subject to “Belt and Road”, “OPEC+” and other regulatory frameworks have clear intentions of multiple checks and balances and maximization of interests.

In recent years, Sino-Arab cooperation has been deepening by the day, and this is reflected in many aspects: in the energy sector, for example, although China is still the most important buyer in the petrochemical energy market, it is determined to push forward the new energy transformation. At the same time, Saudi Arabia, as the representative of Middle Eastern countries, also continues to promote its own energy revolution, such as the recent Chinese companies that brought two energy storage projects to Saudi Arabia, which after completion will become the second largest off-grid energy storage project in the world. In the field of energy transformation, China and the Arab countries have essentially formed a model in which China provides technology and products, while the Arab countries provide market and capital.

The ulterior areas that can be deepened in future cooperation between the two sides

Energy trade is the ballast of Sino-Arab economic and trade relations. China is the world's largest importer of fossil energy and Arabia is the largest oil and gas producing region, with proven oil and gas reserves in the Middle East accounting for 55 percent and 42 percent of the global total.

For years, Chinese oil imports from Arab countries have accounted for nearly half of China's total oil imports, with more than 20 percent of total oil exports from the Middle East. Qatar is the world's largest liquefied natural gas (LNG) exporter, with exports accounting for 20 percent of global LNG trade, and China is also Qatar's largest LNG export market.

In recent years, thanks to cooperation between the two sides in the field of new energy and the promotion of new energy transformation in Arab countries, the Arab world's abundant wind, solar and hydrogen energy resources are becoming the "oil" of the next era.

The Middle East has a very even distribution of light and heat resources. Apart from the Persian Gulf coast and the coastal areas of the Mediterranean, for every kilowatt of photovoltaic panels, the average annual electricity production is between 1,753 kilowatts and 1,899 kilowatts, while in other regions energy production exceeds 1,900 kilowatts.

With superior resource endowments, Arab countries generally produce photovoltaic power as an important pillar of renewable energy development. In 2022, photovoltaic power production in Arab countries was 30.8 terawatt-hours, accounting for 70.5 percent of total renewable energy production (non-hydro).

The Arab world's attempt to move away from traditional energy structures is a great advantage for both China and the Arab world. China has equipment, technology and experience, while the Arab countries have resources and capital, so the prospects for cooperation between the two sides are very bright. In fact, many photovoltaic power plants in the UAE, Oman, Egypt and other Arab countries have been built by China.

For example, the Alshubah photovoltaic power plant, the world's largest single photovoltaic power plant project with the largest installed capacity under construction in the world, currently under construction, is located in southwestern Saudi Arabia, 80 kilometers from the desert city of Jeddah South. The project covers an area of 52.54 square kilometers, using the world's most advanced double-sided N-type PV modules and single-axis automatic tracking bracket, with an installed capacity of 2.6GW. It is expected that within 35 years, the total power generation capacity can reach about 282.2 billion kilowatt hours, equivalent to a reduction in carbon dioxide emissions of nearly 245 million tons. According to the plan, the first phase of 600 MW capacity will be connected to the grid on July 31 for trial operation and November 30, 2025 for full completion.

In addition, China and the UAE may cooperate in hydrogen energy and carbon capture, utilization and sequestration (CCUS) technologies in the future.

Regarding green hydrogen, the UAE has formally proposed to reach 1.4 million tons/year of hydrogen production capacity by 2031, including 1 million tons of green hydrogen and 400,000 tons of blue hydrogen; Oman has also introduced a national green hydrogen strategy to formulate the necessary policies, regulatory and legal frameworks to promote the green energy transition.

Saudi Arabia also hopes to become the world's leading hydrogen exporting country by 2030.

Regarding CCUS technology, Abu Dhabi National Oil Company (ADNOC) plans to increase its carbon capture capacity sixfold to 5 million tons/year by 2030, while Qatar Energy Company (QEC) plans to increase its carbon capture and storage capacity to 5 million tons/year by 2025. To promote the application of carbon capture, utilization and storage technology, Saudi Arabia is planning to build the world's largest CCUS center in Jubail. According to the plan, by 2027 the carbon capture capacity of the CCUS center in Jubail will reach 9 million tons/year.

China, as the world's largest hydrogen producer with an annual production of more than 30 percent of the world's hydrogen, is also making continuous efforts in the field of green hydrogen technology. In June 2023, China's Kuqa Green Hydrogen demonstration project officially went into operation, marking a breakthrough in the large-scale industrial application of green hydrogen in China. It is China's first 10,000-ton photovoltaic (PV) green hydrogen project and the world's largest green hydrogen production project, laying the foundation for a large-scale Chinese green hydrogen project.

As for CCUS, Saudi Arabia and other countries have begun to collaborate with Chinese universities and research institutes.

Deepening China's cooperation with Arab countries in semiconductor, artificial intelligence and other fields. The comparative advantages of Arab countries in these fields.

The most obvious comparative advantages of the Gulf Arab countries are two: the abundance of capital and the strategy of "investing in the country."

The Gulf countries have huge sovereign wealth funds. Mubadala, Abu Dhabi's sovereign wealth fund, for example, manages some $276 billion in assets and, with $17.5 billion in investments in 2023, ranks third among the world's top 10 sovereign wealth funds. The UAE's top three sovereign wealth funds, including Mubadala, such as Abu Dhabi Investment Authority and Abu Dhabi Holding, will collectively invest $36.5 billion in 2023.

Meanwhile, the Arab countries represented by Saudi Arabia and the UAE attach great importance to semiconductors and AI. They believe that AI-related technology represents an important opportunity for Arab countries to catch up with the global trend of technological development, participate in international competition to gain a favorable position, and even bend their way to overtaking. Although they are generally late in the game, they rank high in terms of investment, reaching hundreds of billions of dollars.

In January, UAE President Mohammed announced the formation of the Artificial Intelligence and Advanced Technology Council (AIATC), and in March the AIATC announced the formation of MGX, a technology investment company, to lead the deployment of cutting-edge technologies. The company's founding partners include Mubadala Investment Company, the UAE's sovereign wealth fund, and G42, the UAE's technology giant in artificial intelligence and cloud computing. assets under management are expected to exceed $100 billion in the next few years.

This is a huge opportunity and challenge for China, which is developing rapidly in the field of artificial intelligence, but there is concern that future cooperation may be hampered by external sanctions.

The UAE's G42, for example, has a deep partnership with U.S.-based OpenAI and Microsoft, and previously worked closely with Chinese companies such as Huawei, but recently had to withdraw its investment from China due to U.S. interference.

The role of the UAE in the internationalization of RMB in the Middle East

On April 23, the first international commodity trading platform using RMB as the settlement currency was unveiled in Abu Dhabi, the capital of the United Arab Emirates (UAE), and just at the end of January, digital RMB was used for the first time to make real-time cross-border payments in the UAE.

The UAE is the first Middle Eastern country to have reached a bilateral currency swap agreement with China. Back in January 2012, China and the UAE reached a bilateral currency swap agreement totaling RMB 35 billion or Dh20 billion.

The UAE's Dubai Port, one of the trade and exchange centers of the Middle East, focuses on re-export trade.

The UAE is also China's first export market and the second largest trading partner in the Middle East. Many Chinese products are re-exported to the Middle East, Africa and Europe through Dubai.

In addition, as one of the financial centers in the Middle East, the UAE government is very active in promoting the internationalization of the renminbi.

Therefore, the UAE is the best ground for testing RMB internationalization and promoting international RMB payments.

The Arab countries' pursuit of strategic autonomy

Over the past 20 years, Middle Eastern countries, including the Arab world and Iran, have taken the lead in shaping a strategic environment conducive to themselves, focusing particularly on balancing their relations with global powers such as the United States and China.

The U.S. is reducing its investment in the Middle East because of its strategic contraction in the Middle East. Therefore, the U.S. is changing the way it intervenes in the Middle East, reducing its forceful intervention in the Middle East and seeking to play an offshore balancing role. This has led Middle Eastern countries to seek security autonomy and strategic autonomy.

But the geopolitical environment in the Middle East is so hostile that they cannot rely entirely on themselves to maintain a secure environment. Therefore, Saudi Arabia has asked China to mediate its relations with Iran, and with China's mediation, Saudi Arabia and Iran have achieved reconciliation.

At the same time, Middle Eastern countries cannot choose sides between China and the United States, but are on both sides of the bet so that their interests are diversified. Therefore, we can see that Saudi Arabia and other countries are still trying to sign a joint defense agreement with the United States, but also with China and other Asian countries to strengthen economic and trade cooperation, energy, science and technology and other aspects of cooperation, the implementation of the "look east," "turn east," "Look East," "Turn East," and "Travel East."

The United States now sees the Middle East as the front line of the battlefield of Sino-American competition and Sino-American influence and sees Chinese influence as a threat. This has led the United States to undermine these security cooperations on the one hand, and on the other to pressure Arab countries to abandon cooperation with China. For example, they have tried to use the F-35 export agreement to force the UAE to drop its adoption of Huawei equipment and conduct investment and national security reviews of related investments.

How do Arab countries view this phase of the Palestinian-Israeli conflict and the recent clash between Israeli and Egyptian soldiers at the Rafah crossing

The Palestinian-Israeli conflict is undoubtedly one of the key issues of this meeting; since the beginning of the conflict, Arab countries have made efforts to mediate, but there seems to have been no substantial participation.

Since the outbreak of this phase of the Israeli-Palestinian conflict, Arab countries have avoided getting involved and have worked to cease fire, stop the war, and mediate the conflict.

Due to the disintegration of the Arab nationalist narrative and the formation of 22 independent Arab nation-states that are more concerned about their own security and development, we have yet to see Arab countries take sides.

Previously, with Trump's facilitation, more and more Arab countries were ready to establish diplomatic relations with Israel and normalize relations with Israel. This process began with the signing of the Abrahamic Accords in 2020, when four Arab countries established diplomatic relations with Israel, hence the name "Abrahamic process."

The fact that countries, including Saudi Arabia, are preparing to normalize relations with Israel represents a change in the attitude of the Arab world as a whole toward Israel, or a change in the atmosphere of the Arab world against Israel. It is also an indication that the Palestinian issue is no longer high on the regional and diplomatic agenda of the Arab states.

However, judging from recent incidents of firefights between Israeli and Egyptian soldiers, it is unlikely to result in a full-scale conflict between Egypt and Israel, and there will not be a fundamental change in the attitude of Arab countries toward the Israeli-Palestinian issue.

China's Xi backs Palestinian statehood at summit with Arab leaders

Chinese President Xi Jinping reiterated calls for the establishment of an independent Palestinian state and promised more humanitarian aid for people in Gaza as he opened a summit with leaders of Arab states.

"War should not continue indefinitely. Justice should not be absent forever," Xi said in a speech opening the China-Arab States Cooperation Forum.

"Commitment to the two-state solution should not be wavered at will.”

Xi restated China's backing of a two-state solution and pledged 500 million yuan ($69 million) in humanitarian aid for Gaza.

He also promised to donate $3 million to a United Nations agency that provides assistance and relief to refugees of the Israel-Hamas war.

The trend toward normalization of Arab relations with Israel.

It is very likely that Saudi Arabia is still negotiating with Israel under U.S. pressure. In fact, as of October 7 last year, these negotiations were almost concluded. This is a common trend and choice for Saudi Arabia and Israel. The United States will also provide incentives to Saudi Arabia and Israel, and it is only a matter of time before Saudi-Israeli relations normalize.

Iran's role

Today we see Iran as a key security actor in the Middle East, where the Iranian-led "axis of resistance" has prevailed in high-intensity conflicts with GCC countries over the past decade.

In 2023, Iran reached a historic reconciliation agreement with Saudi Arabia in Beijing, and then became the most important supporter of the Palestinian side in the Israeli-Palestinian conflict in October this year.

Iran's long-standing strategy has been to promote proxies to implement anti-Israel and anti-U.S. strategies outside its borders through armed militias and non-state actors, as well as to compete for supremacy with Arab countries such as Saudi Arabia. Looking at Iran's strategy over the past decade or so, it has been very effective, not only succeeding in pushing its own front abroad, but also promoting its political and military forces in various Arab countries such as Yemen, Lebanon, Iraq, etc.

The strategy of Iran's so-called "Axis of Resistance" has been a major headache for the Arab states, which, led by Saudi Arabia, have invested heavily in it, but without great results. The Saudis, for example, have invested enormous political, military and financial resources in Syria, Lebanon and Yemen, without achieving much.

Saudi-led Arab countries are in the midst of a historic process of national transformation. Since the launch of the Vision 2030 program in 2016, Saudi Arabia has implemented drastic reforms to overhaul its economy, politics, society, culture, and other dimensions. Saudi Arabia is now focusing on economic transformation and domestic development and promoting better relations with neighboring countries.

The same is true for Iran. Iran's economic and livelihood situation is very serious due to economic sanctions, which is why the Shah and Iran have developed the will to de-escalate the geopolitical conflict and achieve reconciliation.

What will be China's role in the Middle East issue?

Initially, the image of the United States in the Middle East was very good, and much was invested in the cultural, educational and economic sectors of the Arab world. At that time, the U.S. presided mainly over justice in the Middle East, supported by Middle Eastern countries and peoples. Many of the first modern institutions of higher education and hospitals in Arab countries were built by the United States, such as the American University of Beirut, built in 1866, and the American University of Cairo, built in 1919.

In the post-Cold War period, the United States has been a unipolar hegemon in the Middle East, waging a series of wars, including the Gulf War, the Iraq War, and the war in Afghanistan. The U.S. also attempted to put together a system of alliances against Iran, China and Russia, using the Saudi-Israeli rapprochement as a means of promoting it.

In result, however, it has been a disaster.

With the rise of Beijing as a global power, China's strategic objective in the Middle East is now to attempt to fill the so-called "geopolitical vacuum", aimed at personal gain and hegemony through the levers of Belt and Road and Digital Silk Road, as well as with intense commercial and military diplomatic activity.

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