By Tim Niblock
Emeritus Professor of Middle East Politics - Institute of Arab and Islamic Studies - University of Exeter - UK
MEI | Feb 16, 2016
As has been widely acknowledged, the balance of the GCC’s external
trade has changed fundamentally over the past decade. China and India
have been the major beneficiaries of the shift. The significance of the
change can be best understood within the context of the Gulf region’s
long-term economic and political connections. For the two centuries
preceding 2013, the bulk of Gulf trade was with Western countries.[1]
Trade with Japan became important from the 1970s onwards, so much so,
that Japan became the second largest trading partner for the Gulf region
from the late 1970s until 2011.[2]
In 2013, for the first time, China became the largest trading partner
of the Gulf region (taking all eight Gulf countries together). Trade
with the European Union (EU) was pushed into second position, with India
taking the third position. Table 1 provides data on how the Gulf’s
trading pattern have changed from 1990—when China and India were
relatively marginal in Gulf trade—through to 2013 which was the first
year in which China became the leading trading partner of the 8 Gulf
states. Figures for 2014 show China pulling even further ahead, with
China’s total standing at $255 billion, and the European Union’s at $232
billion.[3]
The European Union remains at present the largest trading partner of
the GCC, but current rates of trade growth—and the growing demand for
imported Gulf oil in China and India—mean that the China’s trade is
likely to overtake that of the European Union by 2020. A study of likely
GCC trading developments undertaken by the Economist Intelligence Unit
in 2014 states:
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