Yinchuan, China: For anyone who wanted to observe the skill with which China plays on Arab fears about the European debt crisis, the slowdown in the US economy and the effects of the Arab Spring on the economies of Egypt and Libya, last week the remote western Chinese city of Yinchuan was a good place to start.
Exhibitors and government representatives at the five-day China-Arab Trade Forum were keen to offer a range of solutions for Arab governments and businesses sitting on heavy cash chests — not least the opportunity to invest in Ningxia, the western province with a 36 per cent Muslim population, as well as joint trade proposals in areas like halal food and development.
"China is the biggest consumer of energy, [so we have a] highly complementary relationship." Abdullah Ahmad Al Saleh, Director General of the Ministry of Foreign Trade, said in the summit meeting on Wednesday.
"China and the Arab world should make full play of each other's distinctive advantages in culture, geography and featured industries, thereby leading to a greater prospect of Ningxia's economic development and China-Arab strategic cooperation," Jiang Zengwei, Chinese vice minister for commerce, said.
But niceties aside, the most important thing China has on offer for Arab governments and investors is a piece of the action in its western regional development programme, which is politically the most significant milestone in the nine-year rule of Chinese president Hu Jintao.
Hu has set out to uplift the backward western region that includes the border province of Xinjiang and Ningxia, the province where the forum is taking place, and one which has largely been ignored by the rapid development in China since the reforms of Deng Xiaoping began following the death of Mao Zedong.
Since 1989, much of China's development has taken place in the eastern and southern regions, which have emerged as major industrial hubs. In the process, the historically backward western region, also the home of ethnic minorities — and the country's Muslim population — has been neglected.
Which leaves somewhat of a blank slate for Arab investors. Xinjiang and Nigxia may be poor in terms of development and wealth, but the resource rich regions present huge opportunities for mining coal, oil and gas as well as the development of wind and solar power, halal food industry and large-scale agriculture.
At the same time, the Chinese are keen to persuade their Arab friends that not only does China's western regions offer rich financial gains, they also offer the opportunity for Gulf Muslims to bond with their Chinese counterparts, drawing these Chinese minorities away from links with groups from Afghanistan and Pakistan — countries which already have links with China's restive Xinjiang province, the scene of riots and violence over the past few years.
Working both ways
While this has encouraged calls for the setting up of an official Arab free trade zone in Ningxia, the relationship works both ways. Asian investors, who find their investments in Europe and the US, also face the prospect of declining exports as the global economy teeters on the brink of recession. The Gulf, with its huge oil reserves and vibrant economies, offers a more reliable partner in these uncertain times.