China is in discussions with a group of six Middle Eastern countries to establish a free trade pact, state media reported Monday.
A Middle East delegation led by Kuwait’s Finance Minister Mahmoud Al-Nouri is in Beijing and meeting with the Ministry of Commerce and Ministry of Finance to discuss the Free Trade Agreement (FTA), the China Daily said.
Citing Kuwait’s ambassador to China Faisal Al-Ghais, it said the delegation included finance ministers and others from the six Gulf Cooperation Council countries — United Arab Emirates, Bahrain, Kuwait, Oman, Qatar and Saudi Arabia.
“It will be a historic visit which will surely comprehensively promote bilateral trade and economic relations ,” Mr Al-Ghais said. Mr Al-Ghais said the two sides would sign a comprehensive trade and economic cooperation framework agreement during the visit and begin discussing an FTA.
The FTA would include tariff reductions and simplification for flows of goods and facilitation of mutual investments, the newspaper said.
If established, it would be China’s second FTA with a regional group after signing a framework free trade accord with the Association of Southeast Asian Nations (ASEAN) last year.
China is currently in talks with several other possible FTA partners, including New Zealand, Australia, Chile and South Africa.
However, an FTA between China and the Gulf Cooperation Council, which holds 45 percent of the world’s oil reserves and accounts for 20 percent of oil production, would help shore up China’s energy supplies.
China is increasingly importing oil due to strong domestic demand, stemming from a fast growing economy. Growth in car sales has also led to higher oil consumption.
“We are prepared to provide China with its energy needs,” Mr Al-Ghais said.
“Both sides are practical. They have realized the importance of each other. I don’t see any reason for the negotiations not to proceed very well and smoothly.”
China-Gulf Cooperation Council trade volume rose 46 percent to $17 billion last year, the newspaper said.