HK gains to partner in Arab world development

The lands of southwest Asia and North Africa have been given various names. British imperialists in the 19th century used the term “the Near East”; then, in the 20th century, “the Middle East” became common; and now the acronym MENA, standing for the “Middle East and North Africa”, is fashionable.

No one in the 13 million square miles (34 million square kilometers) of this region ever thinks of themselves as “Near Easterners” or “Middle Easterners” or “MENA people”. These are artificial names contrived by outsiders to describe a region in which nearly all of its 450 million people speak Arabic to one another and whose 22 countries are members of the Arab League. The region is properly called the Arab World.

In ancient times, China traded with Arabs along the old Silk Roads. Today, China has restored Sino-Arab connections in bold, contemporary form. In 2013, President Xi Jinping announced the Silk Road Economic Belt and the 21st Century Maritime Silk Road with the aim of building a trade and infrastructure network connecting Asia with Europe and Africa along the ancient routes. In May 2016, Chinese Foreign Minister Wang Yi declared that “both China and the Arab World agree to take the Belt and Road Initiative as the lodestar to promote their relations”.

Western powers viewed the region as important because it holds nearly half of the world’s proven oil and a quarter of its natural-gas reserves. The Sino-Arab relationship encompasses a much broader and more constructive range of mutual interests. Three key pillars underpin their cooperation under the Belt and Road Initiative: connectivity, industrial production capacity, and cultural and people-to-people exchanges.

In 2004, the Ministerial Conference of the China-Arab States Cooperation Forum was established, and in 2013 the China-Arab States Expo was initiated. The most recent expo, held in August this year, featured trade fairs and forums that emphasized clean energy, water resources, modern agriculture, green food, cross-border e-commerce, and tourism cooperation. Thus, although China and the Arab states will continue their traditional cooperation on oil and gas, the emphasis is no longer on energy extraction but on new economic development. The United Arab Emirates and the Emirate of Kuwait provide prime examples of such development.

The United Arab Emirates, which was the last of the Arab countries to emerge from colonialism, is now one of the world’s wealthiest countries and a model for the intelligent use of oil revenues to drive economic diversification: Only a quarter of the country’s GDP now comes from oil and gas. Its ambition, as set out in its national agenda, “Vision 2021”, has been to develop a knowledge-based economy, encourage high-value-added sectors, and attract investment. In addition to a range of business and financial services, including its development as a regional fintech hub, the economy is significantly boosted by tourism via Dubai, now the world’s busiest airport.

The UAE has participated in the BRI to build its role as a land and maritime trade hub for Chinese and international goods. Cooperative BRI projects include huge entrepots for international businesses (the Dubai Traders’ Market and the Yiwu Market) and a China-UAE Cooperation Zone to demonstrate industrial capacity. Chinese business and investment are increasingly attracted to the country: COSCO Shipping uses the deep-water Khalifa Port as its regional base, and more than 6,000 Chinese businesses are currently operating in the UAE.

Kuwait, recently termed by The Economist (Aug 27, 2022) as “arguably the Arabian Peninsula’s fastest-growing economy”, is another story of successful, ongoing diversification from dependence on its extensive reserves of oil and gas. Its “Kuwait Vision 2035” involves not only major physical and digital infrastructure development, but rapid expansion of other aspects of its economy. Kuwait was the first country to develop a sovereign-wealth fund, which now totals $769 billion.

In 2019, Kuwait launched an $86 billion Phase 1 for the development of its new Silk City. The name itself evokes the old trade route and is envisaged both as a huge economic free zone and as a financial hub. Silk City will ultimately house 700,000 people and include the highest tower in the world. Also, with Chinese participation, Kuwait is developing its Mubarak Al-Kabeer Port to add access for international trade.

In the past decade, Egypt discovered proven reserves of 3.3 billion barrels of oil and 62.8 trillion cubic feet of natural gas. Although a latecomer to such wealth, Egypt has been an early and enthusiastic partner in the BRI. Because the Maritime Silk Road passes through the Suez Canal, Egypt is cooperating with Chinese businesses in the development of a large economic zone adjacent to the canal and a major pumped-storage hydropower plant nearby.

The most impressive project is the building of a new Egyptian administrative and financial capital covering 270 square miles (700 sq km) east of Cairo. Conceived as part of “Egypt Vision 2030”, the new city will have skyscrapers, including the Oblisco Capitale, a giant, 3,300-foot (1,006-meter) Pharaonic-style obelisk; and the Iconic Tower, the tallest in Africa. Planned to have a population of 6.5 million, the city will be connected by light rail transit to Cairo’s 20 million population. Chinese construction firms are heavily involved in the work.

How should Hong Kong view the Arab World? More people live in Arab countries than in the European Union and, in terms of geographic extent, it is 10 times the size of India. But the most important fact is the commitment of Arab governments to rapid economic change. The “Vision” agendas, adopted by the UAE, Kuwait and Egypt, have parallels in other Arab countries: The next decade promises to be one of major growth and diversification.

As China’s BRI has helped spark the effort to modernize Arab economies, Chinese construction firms have proved their prowess in infrastructure, transport and energy development. But these sectors are not Hong Kong’s primary strengths.

Financial businesses, for which Hong Kong is renowned, could seize new and emerging opportunities for investment and tap into the burgeoning wealth of many Arab countries. Hong Kong, with its expertise in new technologies, could partner with Arab businesses that are pioneering digital economies. Environmental, educational and medical-service businesses all have new and developing opportunities in the region. Hong Kong’s cultural and creative industries could find new possibilities in exploring Arab culture. Tourist businesses could showcase the region’s global cities, its remarkable destination sites, its newly built entertainment and sporting venues, its great new golf courses, watersports on the Red Sea in Egypt and Saudi Arabia, and its endless opportunities for recreation.

It’s time for Hong Kong to wake up to its opportunities in the Arab world.

The author is consul general of Egypt in Hong Kong.

The views do not necessarily reflect those of China Daily.