The Impact of China on the Middle East

Abstract

This article assesses the impact of the fast economic growth and expansion of China on the Middle East. It examines the evolution of the profile of the Middle East during 1995–2004 in terms of Gross Domestic Product (GDP) growth, energy resources and potential, commodity structure of the foreign trade of the Middle East, its main trade partners and China's role in the international trade of the region. The importance of the Middle East for China's economy from 1995 to 2004 is discussed, including trade in goods and services, Foreign Direct Investment (FDI) and supplies of energy and raw materials. Trade competition and/or collaboration between the Middle East and China, especially since the accession of China to the World Trade Organization (WTO), are also considered. Finally, China's impact on the Middle East is analysed by looking into trade, capital flows, labour flows, energy and raw materials and competition in the domestic and international markets with respect to goods and services. Indirect effects of China as a global player on the Middle East may also play a role, mainly through the big player in the Middle East: the United States.