CONTEMPORARY EURASIA VIII (2) ContEurVIII2 | Page 66

CONTEMPORARY EURASIA VIII (2)
refineries relatively easy. Later, Beijing succeeded in its efforts to
strengthen economic ties with other Gulf countries and producers, such as
the United Arab Emirates and Kuwait. Indeed, non-Gulf energy
producers in the Middle East, like Egypt, Sudan, Libya and Algeria, were
also in China’s sights. China’s initial efforts to deepen its economic ties
with oil-producing states was not only aimed at the Gulf, but also some
second-tier producers. China’s purpose was to establish smooth energy
ties with the Gulf region oil producers. Hence, it maintained regular
relations with Oman and Yemen, which were China’s fourth and fifth
largest oil suppliers respectively. Mutual foreign, trade and petrochemical
ministerial visits between the sides continued, and Beijing signed
investment and trade agreements with both countries. Moreover, the
President of Yemen made an official visit to China in 1998. 8
In September 2004, China and the Arab League (15 members)
jointly advocated an action plan by announcing the establishment of a
biennial forum on politics and economy. They also initiated the
implementation of various programs for easing mutual market access,
while promoting trade and investment cooperation, especially in the oil
and gas sectors. 9
Nevertheless, by the second half of the1990s, Beijing had begun
focusing its efforts mainly on three significant oil-rich countries in the
Gulf region: Saudi Arabia, Iran, and Iraq. China aimed to access the key
energy resources in the Middle East, therefore it basically concentrated
on the countries that had influence on global energy markets. For China’s
energy strategists, no region could be compared to the Gulf region in
terms of its priority. In June 1997, a consortium of China’s energy
companies and China North Industries Corporation (NORINCO) signed a
22-year production-sharing agreement with Saddam Hussein’s Iraq to
develop the country’s oil fields. Although in the post-Saddam period the
status of this agreement remained uncertain, nevertheless, Chinese
companies expected to compete energetically for some opportunities,
once the political and security environment in Iraq allowed foreign
energy companies to work there. For instance, China’s companies
participated in the discovery and production of crude oil in Iraq.
Meanwhile, as Chinese companies were waiting for the political situation
in Iraq to cool down, they focused their efforts on accessing the energy

8 Ibid.
9 Harry
Hongyi Lai, “China’s Oil Diplomacy: Is It a Global Security Threat?” Third World
Quarterly Vol. 28 (3), 2007, 525.
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