China’s energy policy in the Arab world

Date

2018-10-05

Authors

Nigeer Yasen, Zuli

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Abstract

China emerged as a major consumer of the Middle Eastern oil and gas due to the rapid economic growth that China experienced following its 1978 economic reforms. Chinese stable demand balanced global oil prices, which were suffering from the aftermath Iran-Iraq and Gulf wars. The influx of cash contributed to the establishment of Arab Sovereign Wealth Funds (SWFs). Energy exporting Arab nations subsequently utilized their massive SWFs to invest in the U.S. and Asian markets, which in turn deepened the economic interdependence between the U.S., China and the Arab world. The global economic interdependence between the U.S., China and the Arab world created both opportunities and limitation for China to expand its economic and political influence in the Middle East. This paper seeks to explain the evolution of China’s Middle East policy through the lances of oil and gas. Oil and gas are powerful prisms that help us to understand the interaction between the global economic trends and regional developments in shaping policy. Understanding this interaction is crucial to understanding Chinese policy in the Arab world as the China’s economic growth becomes increasingly dependent upon the continuity of energy imports from the Middle East.

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