Mideast-China trade to eclipse West by 2027, says think tank

The Middle East’s trade with China is set to eclipse the oil-rich region’s ties with their traditional Western allies midway through Donald Trump’s second term in the White House, according to a report from a think tank.Gulf-China trade fell last year to $225bn as a result of lower oil prices, but is set to grow this year and rise to $325bn by 2027, Asia House, which focuses on Asia, the Middle East and Europe, said. Trade between the Gulf and emerging economies in Asia may hit $682bn by 2030 if current growth levels continue, the report said.Trade between the Gulf and the US, UK and Europe, was over $250bn in 2023 but has been growing at a slower rate than Gulf-China trade."It’s clear from our research that we are in the midst of a profound shift in the global landscape,” Asia House Chief Executive Officer Michael Lawrence said in a statement. "These new alliances – diplomatic, economic and commercial – are being forged as Western economies become increasingly protectionist.”Countries like Saudi Arabia and the United Arab Emirates have been building closer ties with China and other rapidly growing Asian economies as they look to attract more foreign investment and bolster trade with the biggest buyers of their oil exports. Both have been invited to join the Brics group of emerging market powers, which includes Brazil, Russia, India, China and South Africa as part of plans to strengthen alliances of the so-called global south.Yet the growth of Chinese trade with the Gulf may be challenged by Trump’s policies, Asia House said. While US tariffs on Chinese imports could encourage more trade with Gulf countries, pressure from the Trump administration to reduce co-operation with China may limit growth.The US has already been applying pressure on Gulf countries to limit technology and artificial intelligence co-operation with China.Still, a push by Gulf countries to develop renewable industries, promote adoption of electric vehicles, and develop their role as international finance centres will increasing draw in Chinese investment, Asia House said. At the same time the sovereign wealth funds from the Gulf, which control over $4tn, have been increasing their investments in Asia.