Home > Asia-Pacific, China, Economics, Middle East > China in the Middle East

China in the Middle East

China’s influence in key Middle Eastern countries has increased thanks to its economic clout. It is becoming a primary export market for countries of the region (and much of the world in general), while also making significant and strategic investments in numerous regions.

From a FPIF/Asia Times article:

In the past five years, China has emerged as the major investor in Iran, with an estimated US$120 billion worth of energy investments. Despite the sanctions already in place, trade between the countries grew by 35% in 2008, to $27 billion. In 2009, China signed over $8 billion in new energy investments. Seemingly, there is an emerging China-Iran tandem.

Saudi Arabia and Iran are among China’s biggest suppliers of crude oil.

China is Saudi Arabia’s top export market. Trade between the two countries had increased to US$41.8 billion in 2008. 16,000 Chinese workers were employed in Saudi Arabia in 2009, representing 70 companies.

It is estimated that in 2010 China will be Egypt’s largest trade partner.

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  1. Richard
    May 17, 2010 at 1:23 am

    Persian Gulf, where 40 percent of global energy, oil and gas, is transported.

    http://www.offshore-technology.com/news/news83244.html

    • May 18, 2010 at 10:12 am

      Thanks for the comment Richard. I’ve responded to your comment in full at the Foreign Policy in Focus site (the comment is pending approval by the moderator — URL: http://www.fpif.org/articles/china_and_america_jostle_in_middle_east#).

      Here is a reproduction of it:

      Thank you, Richard, for your response, and for the multiple sources.

      I think what gave me pause and made me curious to investigate a little further was that the article mentioned that 40% of “global energy” is transported in the Persian Gulf. Oil and gas are part of total energy produced, which also includes hydroelectricity, coal, geothermal, wind, etc.

      I did a very quick calculation from a spreadsheet I’d some time ago downloaded from the US Energy Information Administration (US EIA) and based on that about 59% of world consumption of energy in 2006 comes from oil and gas. (Sorry for not providing a link, the spreadsheet is on my computer and I can email this to you or try to find it online if you like).

      You’re right, that the exact numbers regarding energy production and consumption can vary depending on which sources you use for calculations. I believe that the estimates of oil and gas as a share of total world energy though generally range from 58 to 61 percent.

      Looking at production numbers for oil and gas globally, it is accurate that about 40% of global oil and gas produced worldwide comes from the Gulf states. And a great portion of these hydrocarbons are transported by sea through the Persian Gulf and the Strait of Hormuz.

      As I’d mentioned in my previous comment, the US EIA claims that seaborne transport accounts for half of this total. So that about 40% global of oil and gas is produced in the Gulf states and about 20% of this is transported via sea lanes through the Persian Gulf and the Strait of Hormuz.

      I did almost exclusively source the US EIA here, and have not had the time to, in detail, look at other sources so I’m open to their stats being incorrect. I did have a quick look at the production numbers that the US EIA provided for oil production in the Gulf states and these numbers seem to match what is commonly reported in the news as say Iran, or Saudi Arabia’s yearly production levels. (Source: http://tonto.eia.doe.gov/country/index.cfm)

      It may seem that I’m overly absorbed with the detail of this one statistic, but I think this has impact on analysis and strategy around geopolitics and energy security policy.

      Two examples:

      If there was ever some conflict that prompted Iran to try to shut down the Strait of Hormuz, it would make sense to grasp the impact this would have on the world’s access to energy. Based on the numbers I provided in the previous post, it is also interesting to note that Asian economies (like Japan, Korea, China, and India) would be more immediately vulnerable to a blockade of the Gulf than would the US. This is because the US has been more successful at diversifying its energy portfolio. It has important sources of energy other than just oil and gas. Also, it imports hydrocarbons from a wider list of producing countries. This makes it less dependent than the major Asian economies to hydrocarbons coming from the Gulf states.

      This leads me right into my second example, regarding the importance of distinguishing between total energy and hydrocarbons. Numerous governments are keenly aware of their dependence on oil and gas and would like to have better energy security by diversifying away from overwhelming dependence on hydrocarbons in order to tap into such sources of energy as coal, nuclear, and hydroelectricity. Turkey’s recent five year energy and natural resources plan highlights this by indicating a wish to expand coal and hydroelectric electricity generation. (Turkey’s 2010-2014 plan here: http://www.enerji.gov.tr/yayinlar_raporlar_EN/ETKB_2010_2014_Stratejik_Plani_EN.pdf)

      Thanks again for your prompt response and for engaging in a discussion on this topic. I want to be clear that I’m not waving the statistics I found as final numbers on the subject, and I am open to their being shown inaccurate; they do however make more sense to me when being careful to distinguish the difference between global energy versus global oil and gas.

      All the best.

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