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China-Gulf free trade talks stall on Saudi commercial program, sources say

Settlements between China and an Arab bloc for an open market agreement have stalled over concerns by Saudi Arabia that low-cost Chinese imports could undermine its aspirations to transform the kingdom into an commercial powerhouse, sources state.

Saudi Arabia has backed renewed efforts over the past 2 years for the Gulf Cooperation Council (GCC), the Arab bloc which includes the kingdom, United Arab Emirates and Qatar, to name a few, to finally seal a long sought handle China.

But five sources briefed on the negotiations stated the sides were at an impasse over Saudi bookings with a list of items advanced by Beijing to be exempt from Gulf import duties.

Saudi Arabia is worried that a wave of lower expense Chinese versions of products that it hopes to make locally would be harming to its industrial agenda, the sources said.

Saud Arabia's federal government communication office, the GCC Secretariat and China's commerce ministry did not react to requests for comment on the trade negotiations.

The kingdom, the world's most significant oil exporter, has a nascent manufacturing industry that the federal government hopes will one day make everything from computer chips to tires as part of a wider financial improvement strategy to create a lively economic sector.

Saudi Arabia is spending trillions of dollars developing its economy under that program, referred to as Vision 2030, driven by the nation's de facto leader, Crown Prince Mohammed bin Salman.

Prince Mohammed desires Saudi Arabia to not just decrease its reliance on oil rents by developing a strong private sector however To transform the kingdom into a significant global business hub.

The commercial part of that change strategy deals with difficulties even without taking on lower cost Chinese goods. That includes finding experienced workers amongst its citzens in a. nation where about 60% of the 32 million population are Saudi. nationals.

To develop its own manufacturing industry, Saudi Arabia is. partnering with foreign firms, including from China, to develop. regional abilities and manufacturing lines in the kingdom.

The sources stated a China-Gulf trade deal was not off the. table however that the Saudis and the Chinese would likely need to. choose some sort of compromise to see the deal settled.

Gulf authorities last October spoke of reaching a deal soon. China's Ambassador to Saudi Arabia Chen Weiqing was priced quote by. local media in January as saying that although development had been. made, there were challenging concerns that needed to be fixed.

China and the GCC, which likewise consists of Oman, Kuwait and. Bahrain, began trade talks practically twenty years back. The loose. economic and political Arab bloc has settled very few deals. It signed a free trade contract with South Korea in December.

China is an enormous purchaser of Gulf energy and in 2023. bilateral trade in between China and the Gulf stood at $286.9. billion, according to Chinese custom-mades information, with Saudi Arabia. accounting for nearly 40% of trade between the Gulf and China.

China and the Gulf states have deepened financial cooperation. in recent years, to the issue of the United States, which has. long been the core security partner of the Gulf Arab states.

U.S. authorities have actually increasingly looked for to drive a wedge. between the Gulf states and China, consisting of releasing ultimatums. to select in between Chinese and american innovation.

(source: Reuters)