Following the news that the US Democratic Party candidate Joe Biden looks to have won the 2020 US Presidential Election after a tight race against Republican incumbent Donald Trump;
Colin Foreman, Deputy Editor at MEED, part of GlobalData, offers his view:
“The election of Joe Biden as the next US president could result in a softening of the trade war between the US and China. If that happens, it will ease the Middle East’s dilemma of maintaining the benefits that come from a friendly relationship with Washington, while at the same time actively growing trade with China.
“Good commercial relations between the world’s two largest economies are important for the Middle East as it facilitates trade and travel between the east and west through its port and airports. This is especially important at a time when regional hubs, most notably Dubai, will be seeking economic recovery in 2021 after the Covid-19 pandemic.
“The trade war between the US and China was a concern for international businesses based in the region such as Emirates airline and DP World in 2019. Although there were signs of a de-escalation after an initial agreement was signed in January this year, much will depend on how ongoing talks between Washington and Beijing progress under a Biden presidency. While Biden will want to appear to be driving a hard bargain, there is an expectation in China that the new president will be more conciliatory and less impulsive in his approach than Donald Trump.
“Whatever happens in the negotiations, China will continue to be an increasingly important trade partner for the Middle East and vice versa. In 2019, Saudi Arabia became its largest oil supplier, and the Middle East is a growing export market for Chinese businesses.
“The UAE is now China’s 21st largest export market. China exported $33bn to the UAE in 2019. Saudi Arabia was the Middle East’s next-largest export market for China. At 25th place overall, China exported $24bn to the kingdom in 2019. Egypt was in third place for the region. At 37th place overall, China exported $12bn to Egypt in 2019.
“More important than the numbers is the rate of growth. While volumes to China’s three largest export markets – US, Hong Kong and Japan – all contracted in 2019, for the UAE they increased by 12%, while volumes to Saudi Arabia increased by 36%. For Egypt, the growth was 1.6%.
“That trend is expected to continue. This year, Chinese contractors have been active in the region with a string of major project wins despite the pandemic-induced slowdown and Chinese pharmaceutical companies are working with regional partners to develop a COVID-19 vaccine.”