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Gulf-Asia trade poised for massive growth, reaching $682 billion by 2030
Hong Kong's trade with the Gulf tripled from $13 billion in 2022 to $32 billion in 2023.
A new report reveals that trade between the Gulf and Emerging Asia is set to surge, reaching $682 billion by 2030, up from $451 billion in 2023. This growth is driven by China’s increasing economic dominance in the region.
The report by Asia House forecasts that trade between the Gulf and China will surpass trade between the Gulf and the West as early as 2027. While 2023 saw a temporary 12% dip in overall Gulf-Asia trade due to lower oil prices, the long-term trend remains robust.
“The Middle East Pivot to Asia represents one of the fundamental geopolitical and economic shifts of our time,” the report stated, highlighting how intertwined the two regions have become in their growth strategies.
Trade performances among GCC states varied in 2023. UAE-China trade dropped from $110 billion to $93 billion, while Saudi-China trade decreased from $105 billion to $97 billion.
However, Oman bucked the trend, with its trade with Emerging Asia more than doubling from $4.5 billion to $11.1 billion.
Hong Kong emerged as a key player, with its trade with the Gulf tripling from $13 billion in 2022 to $32 billion in 2023. This surge followed landmark visits by Hong Kong Chief Executive John Lee to the UAE and Saudi Arabia.
The UAE’s non-oil foreign trade reached a record $381.5 billion in the first half of 2024, accounting for 18.4% of total trade, up from 16.4% in the same period of 2023.
Similarly, Saudi Arabia’s non-oil exports as a proportion of total exports rose to 26.9% in July 2024, compared to 23% a year earlier.
Chinese investment in the region has surged, with Saudi Arabia attracting nearly $17 billion in greenfield foreign direct investment in 2023, making China its largest greenfield investor.
Gulf sovereign wealth funds are also focusing on Asia, with China receiving $2.3 billion in 2023, a sharp rise from $100 million in 2022.
Saudi Arabia’s Public Investment Fund (PIF) has further deepened ties with China, signing agreements worth up to $50 billion with Chinese financial institutions in August.
While China’s economic influence grows, the United States remains a significant player in Gulf technology partnerships.
The UAE’s AI firm G42 recently inked a $1.5 billion deal with Microsoft while divesting from some Chinese tech investments, highlighting the delicate balancing act Gulf states navigate between the two global powers.
The report also noted that a potential second Trump presidency could accelerate Gulf-Asia trade ties, particularly if the U.S. imposes high tariffs on Chinese goods, prompting the Gulf to deepen its economic engagement with Asia.
