AFP - April 14, 2005
China, Gulf states to almost triple trade over next five years
BEIJING, (AFP) - China and the Gulf states plan to almost triple bilateral trade over the next five years to 100 billion dollars, state media reported.
Commerce Minister Bo Xilai, cited by the China Daily, said China will continue to need crude oil and petrochemical products from Gulf countries and trade would boom from the 36.7 billion dollars seen last year.
At the same time, Chinese exports such as textiles and machinery are becoming increasingly popular in Arab countries, he said.
The report said that during a China-Arab business conference, the two sides signed seven contracts relating to investment, power plant construction and machinery exports.
China is in discussions with the Gulf Cooperation Council to establish a free trade agreement (FTA) which is expected to take effect this year.
The FTA is expected to include tariff reductions and simplification for flows of goods and facilitation of mutual investments.
The Gulf Cooperation Council member states hold 45 percent of the world’s oil reserves and account for 20 percent of oil production, and an FTA would help China shore up its energy supplies.
China is increasingly importing oil due to strong domestic demand, stemming from a fast growing economy.
If established, it would be China’s second FTA with a regional group after Beijing signed a framework free trade accord with the Association of Southeast Asian Nations (ASEAN) last year.