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Growing Economic Interdependence of China and the Gulf Cooperation Council

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  • Michael Thorpe
  • Sumit Mitra

Abstract

The six nations of the Gulf Cooperation Council (GCC) have approximately 40 percent of total proven oil reserves as well as 23 percent of the world's gas reserves. Although rising oil revenues have led to greater outward investment flows, there is also a growing need for significant expansion of the domestic energy sector's capacity. Meanwhile, China's sustained economic boom has resulted in China emerging as the world's second largest consumer and importer of oil, with close to 40 percent of its import demand presently sourced from the GCC. This share will grow significantly in the future. Commercial relations between the GCC and China have to date been dominated by energy‐related bilateral investment flows and China's oil imports. Although this will continue to be a central feature, trade and investment links in non‐energy areas will further broaden and deepen the relationship. China's relationship with the USA in terms of energy is also emerging as a major issue. Rather than being competitors, a mutual dependence on stable and secure supplies from the GCC highlights the need for a cooperative relationship.

Suggested Citation

  • Michael Thorpe & Sumit Mitra, 2008. "Growing Economic Interdependence of China and the Gulf Cooperation Council," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 16(2), pages 109-124, March.
    • Handle: RePEc:bla:chinae:v:16:y:2008:i:2:p:109-124
    DOI: 10.1111/j.1749-124X.2008.00110.x
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    References listed on IDEAS

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    1. Sturm, Michael & Siegfried, Nikolaus, 2005. "Regional monetary integration in the member states of the Gulf Cooperation Council," Occasional Paper Series 31, European Central Bank.
    2. Gawdat Bahgat, 2005. "Energy partnership: China and the Gulf States," OPEC Energy Review, Organization of the Petroleum Exporting Countries, vol. 29(2), pages 115-131, June.
    3. Lawrence, Robert Z., 2006. "Recent US Free Trade Initiatives in the Middle East: Opportunities but No Guarantees," Working Paper Series rwp06-050, Harvard University, John F. Kennedy School of Government.
    4. Michael Sturm & Nikolaus Siegfried, 2005. "Regional monetary integration in the member states of the Gulf Cooperation Council," Occasional Paper Series 31, European Central Bank.
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