A country known for its extensive cuisine, China is only now waking to the mystery of "halal foods" thanks to the high-profile presence of Gulf nations at the Shanghai World Expo.
But China's links with the Arabian Gulf are much more sinewy than a food menu.
Its state-owned energy giants Sinopec, PetroChina and China National Offshore Oil Corp have been raiding desert nations, cash and pipelines in hand.
Recently, China overtook the US as the largest buyer of Saudi oil. The frenzied pace of global acquisitions and deals make these companies a formidable force, but can they remain immune to the vagaries of the Shanghai and Hong Kong markets?
The dual-listed companies have had a phenomenal first quarter. Sinopec, Asia's largest refiner, reported 40 per cent jump in profits and refined 20 per cent more crude oil in the first quarter, compared with a year earlier.
PetroChina's net profit rose 71.2 per cent year-on-year due to soaring crude oil prices and rising domestic demand, while CNOOC's gains more than doubled. But with the People's Bank of China squeezing up domestic liquidity and the Greek debt crisis generating a ripple effect, the energy agents could not remain unfazed. The oil firms slushed about with PetroChina losing 2.4 per cent and Sinopec declining 3.4 per cent. Analysts, however, do not think there is cause for alarm.
According to Halim Ahmad, energy analyst at Standards & Poors, "The weak performance by the China markets should not have any fundamental impact on the performance of Chinese oil companies." Neither does he think that last week's tightening measures like the People's Bank of China hiking the reserve requirement ratio will hit them too hard.
"The policies are aimed at cooling the domestic property market. However, when policymakers run out of options such as raising reserve requirements to mop up liquidity, they will eventually have no choice but to raise borrowing rates, which will impact the energy companies via higher finance costs," he says.
The healthy first quarter results of the three companies and aggressive acquisition plans are pointers to good fundamentals, experts feel. Last year, Chinese companies spent more than $32 billion (Dh117.68 billion) to secure oil, metal and coal fields in Asia, Africa and Australia. PetroChina is planning to invest at least $60 billion for foreign acquisitions in the next decade.
Recently, in one of the largest export deals for Australia, CNOOC decided to buy LNG from BG Group's proposed export terminal in Queensland. The deal is estimated to be worth more than $80 billion. The Chinese shopping list only gets longer.
Ahmad says these aggressive acquisitions are a necessity for China's energy security, given Chinese domestic crude production growth is on average about 1.5 per cent per annum over the last ten years, while demand has grown at a much faster rate.
But with the Shanghai Index closing at an eight-month low of 2,688.38 on Friday, there is the danger of risk appetite declining and this may negatively impact Sinopec's plans to issue its bonds. Sinopec intends to release 20 billion yuan (Dh10.74 billion) worth of 5- and 10-year corporate bonds to repay bank loans and replenish its coffers for overseas acquisitions. The company was expected to issue the exchange-listed bonds on the Shanghai Stock Exchange in May, marking the country's biggest issue of its kind. However, the fund raising plan now awaits better market conditions.
Investor dash for safety at this juncture will mean higher demand for ‘safe' assets like Treasuries and gold and lower demand for emerging market bonds, according to Ahmad. Yield spreads will increase, leading to higher finance costs should companies like Sinopec continue with their plans.
The global market uncertainty will also impact the price movements for energy stocks, given their large market caps. On a fundamental basis, however, analysts believe crude oil price expectations, production rates and domestic pricing reform will drive performance. Little wonder that rating agencies have upgraded CNOOC and PetroChina, while Sinopec is not so hot as its refining margins are likely to be squeezed.
The writer is a freelance journalist based in China