Arab states key to defending trade order

The tariffs imposed on China and other countries by the United States have been impeding the comprehensive growth of the global economy and disrupting the normal international trade order. Most countries, including the Arab nations, support a multilateral trading system with clear rules and advocate the principles of free trade that serve the interests of all — a stance championed by China. Indeed, China’s image has solidified in international public opinion as a defender of free trade and the interests of developing countries amid global turbulence.

China, through its development achievements, has proven that it is a reliable partner for achieving prosperity and building a community with a shared future for mankind through cooperation, upholding the values of peace, dialogue, development and mutual benefit. Guided by President Xi Jinping’s philosophy that “a small boat and a lone sail cannot withstand the rough waves, and only by working together in the same boat can people sail steadily and far”, China has become the largest trading partner for more than 150 countries and has 23 free trade agreements with 30 nations.

Gains from cooperation

Bolstering China’s stance is not merely a fleeting political reaction but a smart and farsighted strategic choice that entails numerous economic and political benefits for the supporting nations. The strategic cooperation model between the Arab states and China, which predates the recent crisis by many years, aims to bolster multipolarity in the global system by diversifying partnerships and moving away from reliance on the United States. This Arab support has benefited them in achieving economic independence and reducing overall dependence on the West.

The recent crisis of customs tariffs, which China has turned from a challenge into an opportunity for developing countries, has amplified these benefits. These have enabled Egypt and other Arab states, through strategic cooperation with China and diversification of partners, to transform into global economic hubs and capitalize on the geopolitical and economic shifts the world is witnessing.

Direct economic gains include the opening of Chinese markets to alternative Arab exports, replacing US imports with significant customs facilitations. This is evident in the increased exports of Egyptian agricultural products to the Chinese market, supported by Chinese tariff exemptions on thousands of goods imported from developing countries, including Arab nations.

Arab ports have assumed a pivotal role as regional hubs amid the disruption in Sino-US trade. The Suez Canal stands as a vital artery for global commerce. With China seeking alternative routes to export its goods to Europe and Africa, the strategic importance of the Suez Canal is rising. Egypt can significantly benefit by attracting substantial Chinese investments to expand its ports on the Red Sea and the Mediterranean.

These expansions will enable the reception of larger numbers of mega-ships and serve the increasing trade traffic between the East and the West. Furthermore, establishing advanced logistical storage areas near the Suez Canal will facilitate the assembly and distribution of Chinese goods before their re-export to target markets.

The Egyptian Dekheila Port has witnessed a 40 percent increase in the movement of Chinese containers bound for Europe, and the Jebel Ali Port in the United Arab Emirates has emerged as a hub for the re-export of Chinese goods to Africa. Similarly, Saudi Arabian ports can be transformed into assembly and distribution points for Chinese goods destined for other markets in Asia, the Middle East and Africa.

Likewise, the development of the Duqm and Al Hamra ports in the Sultanate of Oman can attract Chinese investments and transform them into centers for manufacturing Chinese vehicles aimed at African markets. The Tangier Med Port in Morocco can become a logistical hub for Chinese goods heading to Europe, and the Port of Sudan can be developed as a Chinese gateway to Africa.

Another benefit is attracting increased Chinese investments to Arab countries. China is poised to inject substantial investments into Arab nations, coinciding with a decline in Western investments, as seen in renewable energy projects in Saudi Arabia, the Chinese industrial zone in the Suez Canal Economic Zone in Egypt, and the Chinese logistics center in Jebel Ali in the UAE.

Cooperation with China also attracts significant investments in infrastructure, energy, technology and local manufacturing, thereby driving economic growth.

Furthermore, strategic partnerships enhance oil and non-oil exports. China is buying more Gulf oil instead of US oil due to rising tariffs. The UAE and Saudi Arabia can also increase their exports of petrochemicals and aluminum to China.

In terms of payment, the adoption of an alternative payment system in Chinese renminbi allows Arab countries to reduce their reliance on the US dollar.

On the geopolitical front, Arab countries have received support from China, particularly for the Palestinian issue in international forums. Arab nations also support China in the World Trade Organization and other international platforms.

Arab support matters

Arab support holds multifaceted importance for China in the face of market disruptions resulting from tariffs. Foremost is the backing of free trade principles. The Arab states’ alignment with China in defending a multilateral trading system reinforces China’s position as a champion of globalization and free trade against US tariffs. The growing Arab markets serve as a significant outlet for Chinese goods and an expansion of alternative markets to partially compensate for losses resulting from tariffs-incurred failure to export to the US.

Arab support also earns China enhanced geopolitical influence in a vital region like the Middle East. These strong partnerships with Arab countries help secure energy supplies for China, as a major energy importer, strong relations with Arab oil and gas producing nations are crucial for its economic security, with 40 percent of China’s oil imports coming from the Gulf.

This support also contributes to the dissemination of Chinese technology in promising Arab markets, especially in the Gulf, Morocco and Egypt, and promotes the Chinese currency, with increased use of the RMB in trade and projects between China and Arab countries, even leading to the inclusion of the RMB in the reserves of Arab central banks.

Ultimately, China and the Arab states share mutual gains, starting from the vital role of Arab ports for China and culminating in the contribution to building a more just, balanced and multipolar world order.

The author is a researcher in Israeli studies and international relations at the Center for Arab-Eurasian Studies in Egypt.

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