New energy cooperation the next big thing between China and the Middle East?

Chinese Foreign Minister Wang Yi is visiting the Middle East. During the minister's meetings with his counterpart, cooperation in the energy sector is a topic that both sides are keen on exploring. For example, the Chinese foreign minister discussed deepening cooperation in the traditional energy sector while also promoting new energy cooperation with the UAE foreign minister.

So is the new energy cooperation the next big thing between China and the Middle East?

First, let's take a look at the potential market size in the Middle East. Known for its rich reserves of crude oil and natural gas, many countries in the region already invest in the new energy sector to diversify their energy portfolio and achieve climate goals. 

The UAE Net Zero 2050, Saudi Arabia's Vision 2030, Qatar's National Vision 2030, all propose to scale up their new energy sector. Data from the International Energy Agency shows that overall investment in clean energy in the region is expected to hit $10 billion in 2025.

Sovereign wealth funds are big players in this sector. As Stephen Groff, the governor of the National Development Fund of Saudi Arabia, said in an interview with CMG, the fund uses various vehicles to build sustainable power for the local residents.

It's also worth noting that many Chinese companies, both state-owned and private, in the new energy sector are exploring business opportunities in the Middle East. For example, the contractors of the UAE's large-scale round-the-clock gigascale project, which held a groundbreaking ceremony and is worth about $6 billion, include China's state-owned Power Construction Corporation of China as well as private players such as CATL and JA Solar. Chinese companies are rapidly enhancing cooperation with their partners from the Middle East to develop the market.

Analysts say China has the world's most complete new energy industrial chain, the highest productivity, and most competitive pricing, while the Middle East has the resources and determination to develop new energy, thereby creating a great match between supply and demand. Given these factors, it's very likely that green energy cooperation will be the next big thing between China and the Middle East.

(Cover Image via VCG)