00:00Well, Dr. Yang Yang is Chair Professor of Economics at the Willamette University in the United States.
00:06Great to have you on the program.
00:08As we were hearing there from Siobhan, energy imports play a part here, but it's not all about oil, is it?
00:13Non-oil sectors like construction and renewables are changing the trade picture.
00:20Yes, absolutely. Good to be with you, Julia.
00:22So I think a reporter has done a great job outlining the sort of the relationships, the economic relationships between China and the Gulf states.
00:30And you're right. I think the trade is not just about oil.
00:34As you know, the Gulf states, many of them are trying to diversify the economies away from the fossil fuel revenues.
00:41Right. Even though now these oil revenues do account for about 40 percent of GDP.
00:46But when you look at the Vision 2030 by Saudis, they really want to diversify the economy towards more, you know, tag manufacturing, construction, tourism and so on and so forth.
00:55So I think that really makes the cooperation very fruitful because China is able to help these countries to diversify the economy away from fossil fuel towards more renewable energies, technologies, constructions and so on and so forth.
01:08And at the same time, as we mentioned, China does want it to have these energy sources from these Gulf states.
01:14But also, I think, a lot more partnership when it comes to investment and technologies and so on and so forth.
01:20But what are the wider implications of this shift more towards China and possibly away from Western economies?
01:29Right. So I think this has tremendous both geoeconomics but also geopolitical implications.
01:34As we know, these Western countries are traditional partners of the Gulf states and the United States especially also provides, you know, security guarantee.
01:43And that's why when dedication of the U.S. went to Gulf states in May, they did have large numbers of prejudice of investments of Gulf countries to the United States.
01:52But at the same time, I think the rise of Asia and China especially really made the kind of pivot, I think, important for Gulf states.
02:00As they try to diversify the economy, as they wanted to join the technological partnership with Asian economies, the oil exports of the Gulf states, now 85 percent of them go to Asia.
02:11And when you look at the Southern Wealth Fund investment in the first half of this year, you know, out of the 56 billion dollars deployed, 40 percent goes to Asia.
02:19So I think it's very important to see the geopolitical importance and economic importance of the rise of the Asia.
02:25And of course, a lot more diplomatic activities and connections are being built between the Gulf states and Asian economies.
02:31Do you think that this will lead to greater Gulf engagement with China-led forums like BRICS, like SCO and the AIIB?
02:39Yes, absolutely. I think those are already happening.
02:44As you know, that some of these Gulf states are already part of the AIIB, part of the NEB, and many of them are now also, you know, exploring all kinds of connections.
02:54For example, the summit between China, ASEAN, and also Gulf states back in May this year.
03:01I think all of these are really important international multilateral platforms where these middle states, right, middle powers are really trying to navigate through between the two great powers, China and the United States.
03:12And they wanted to play an important role in the global, you know, political and diplomatic landscapes and also gain economic benefits, right, through these kinds of partnerships.
03:22So I think it's very likely to see more and more diplomatic relations and also, you know, engagements at these various international platforms between the Gulf states and other countries.
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