GCC-China bilateral trade witness upward trend

"IMF's World Economic Outlook update, July 2013, forecasted that the global economy would grow by 3.1 per cent in 2013," said Dr. R Seetharaman, Group CEO, Doha Bank . He was speaking at a knowledge sharing seminar organized by Doha Bank on "Opportunities in Qatar and the GCC" held in Qatar recently. The seminar was attended by Mr. Hassan M Al-Khater, Deputy Head of Mission, Embassy of the State of Qatar-Beijing, along with bankers, economists and other key industry leaders.

Speaking on the occasion Dr. R. Seetharaman gave insights on the Global economy. He said: "Growth has been revised marginally downwards in 2013 in developed economies such as U.S and Euro Region. US economic growth has been brought down by IMF to 1.7 per cent for 2013. In the 1^st quarter of 2013, US economy grew by 1.8 per cent over the previous quarter on account of moderate consumer spending, weak business sentiment and declining exports. However, growth has been revised up by IMF for Japan and UK to 2 per cent and 0.9 per cent respectively for 2013. Emerging economies growth has been brought down by IMF to 5 per cent from earlier forecast of 5.3 per cent for 2013, with growth brought down in all emerging economies."

Dr. R. Seetharaman gave his outlook on Chinese economy. He said "China's GDP for second quarter of 2013 slowed to 7.5 per cent year on year from 7.7 per cent in first quarter of 2013 however was in line with the expectations. China still continues to be the second largest economy in the world terms of GDP at current prices and with the current growth rate still remains the engine for global growth. China's foreign trade neared 2 trillion US$ in the first half year, up 8.6 per cent year on year, with exports at 1.05 trillion U.S. dollars, up 10.4 per cent, and imports at 944.87 billion U.S. dollars, up 6.7 per cent. Drop in exports is mainly to weak global demand, a rising Yuan and higher labor costs. China's banks were caught in a credit squeeze that began in late May 2013 due to factors such as lower capital inflows from abroad, seasonal tax payments and a mismatch of banks' shorter term funding with their longer term lending. Concern over bad loans in the economy led to a spike in interbank rates in May - June 2013 and also sent the Chinese capital markets down."

Dr. Seetharaman highlighted the bilateral trends between GCC and China. He said: "GCC- China trade was at $92.5bn in 2010 and has reached $155bn in 2012. Exports from GCC to China in 2012 were $101bn and imports by GCC from China in 2012 were $54bn. Saudi was the major contributor in GCC trade followed up by UAE and Oman. The trade between China and Saudi Arabia reached the highest level of U.S$ 73.4 billion in 2012. The UAE is China's largest export market in the Gulf - the bilateral trade between the two countries has reached more than US$40 billion in 2012. The use of Yuan has been increasing since 2009, when China launched a programme to internationalise its currency by allowing Yuan to be used to settle cross-border trade. China's trading partners have increasingly been able to use the Yuan when paying for imports or receiving payments for exports. With bilateral trade expanding GCC can expect to increase the usage of Yuan."

Dr. R. Seetharaman gave insights on major bilateral developments between GCC and China. He said: "Aramco and Sinopec Group signed the deal to develop the 400,000-bpd refinery, known as Yasref, in January 2013. Chinese bought properties worth nearly Dh550 million in 2010. China and UAE signed a $5.Adidas Ultra Boost