China's economic relations with the Middle East: New dimensions

With the emergence of post-Mao reformers headed by Deng Xiaoping, China's domestic (and international) agenda was transformed to accord the highest priority to economic development, growth and construction, through an active and conscious integration into the global economic community. Inevitably, this policy affected China's economic relations with the Middle East in several ways. Most important, while in the Mao era China's economic relations with the Middle East were motivated primarily by strategic, political and ideological considerations and only secondarily by economic ones, since the late seventies China's economic relations with the Middle East have been motivated primarily by economic considerations and only secondarily by strategic and political ones. Consequently, some traditional activities which had high political value but low economic value (such as economic aid) have been drastically curtailed and practically abandoned; other traditional activities which have added economic value (such as trade) have been expanded and at the same time modified in terms of size, composition and partners; and new economic activities, unacceptable and unheard of earlier (such as labour export and contracted services, the acceptance of loans, joint ventures and two-way investments) have been launched. The purpose of this paper is to explore and analyse these new dimensions of China's economic relations with the Middle East; the significance of this region in China's economy (and vice versa); and the possible strategic and political implications in a twenty year perspective.