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China and the Cooperation Council for the Arab States of the Gulf (GCC) inked a framework agreement on economic, trade, investment, and technological cooperation on Tuesday in Beijing.
The agreement commits China and members of the GCC, an influential regional group in the Middle East which includes Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates, to establish a joint economic and trade cooperation commission and officially launch a bilateral consultative mechanism.
Both sides also agreed to start talks on the establishment of a free trade area (FTA), aimed at reducing tariffs, simplifying the flow of goods and facilitating mutual investments.
The FTA, if established, would be China's second with a regional group after it signed a framework trade agreement with the Association of Southeast Asian Nations (ASEAN) last year. Its success would not only lay a more solid foundation for bilateral cooperation between China and the Middle East countries, but would serve as a prototype for "South-South" cooperation.
At the same time, both sides also discussed methods and means for trade expansion and promotion of trade liberalization.
Due to their strong economic links and great desire to strengthen cooperation, these encouraging moves will inevitably further advance cooperation between the two sides in various fields.
According to Chinese statistics, trade volume between China and GCC members has hit US$16.9 billion, more than 10 times that in 1991. Both sides have also witnessed great progress in the fields of construction, energy and investment. The GCC countries have now become China's eighth largest trading partner, eighth largest export destination and ninth largest source of import.
But compared to their own total trade volume, bilateral trade between the two sides is still on a small scale. In the respective domestic markets there is great need for China's garments, fabrics, electronic and telecommunication products and the GCC's oil, natural gas and chemical products.
Bilateral cooperation in the field of energy, in particular, should be a brighter prospect, given that the GCC states control 45 percent of the world's recoverable oil reserves and China serves as one of the world's largest oil-consuming countries.
Both China and the GCC members have become more cognizant that to strengthen cooperation with the other serves their fundamental interests.
(China Daily July 8, 2004)
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