203US$200 billion as against US$120 billion of India. The Sino-UAE trade
is marginally higher than Indo-UAE trade but is higher than India’s trade
with all the Gulf countries especially Iran and Iraq (China 2016 ). The low
oil price has considerably helped both these rivals who depend heavily
upon the region for their hydrocarbon needs. The Gulf countries meet
about 50 per cent of India’s oil needs and 70 per cent of its gas require-
ments and this is 50 and 60 per cent respectively for China (Bender and
Rosen 2015 ). For now, Beijing’s approach towards the GCC states,
according to some observers, is to maintain a “delicate balance” and to
“avoid confrontation with the United States while limiting its regional
hegemony” (Cheng 2016 ). Simultaneously, it seeks to expand the foot-
prints of its interests and influence towards cultivating “a good interna-
tional image” (Cheng 2016 ).
At the same time, any possible energy supply disruptions or price escala-
tion would intensify the Sino-Indian competition and rivalry in the Gulf.
Because of the economic and power asymmetry, the regional and interna-
tional equations are tilted in favour of Beijing. Furthermore, many Chinese
projects in the region are accompanied by the use of Chinese labourers
(Shichor 2017 ) and this would have a long-term impact on the flow of Indian
expatriates to the Gulf Arab countries. In Iraq where the Chinese companies
are involved in various construction projects, there are about 10,000 Chinese
workers (Hayoun 2014 ) and the same holds true for Iran (Azad 2017 ). In
the GCC countries, where the bulk of the Indian workers are employed,
there are about 500,000 Chinese labourers, mostly involved in projects
undertaken by Chinese companies (Teslik 2008 ; Al-Ubaydli 2015 ).
These Chinese engagements in the region manifest in the introduction
of Yuan as the currency of transaction and the first such endeavour was
introduced in Qatar in April 2015 (Staff 2016 ). Iran which faced difficulties
due to the US and EU sanctions, has been switching to Yuan-based trade
(Jegarajah 2017 ). There are suggestions that Yuan could be added to the
basket of currencies in other countries, both for diversification and to
reduce their overdependence upon the dollars and euros (Staff 2016 ).
Such an option would be extremely advantageous to China as it has a
more favourable balance of trade with all these countries; for example,
China had a trade surplus of US$18 billion in 2015 vis-à-vis Saudi Arabia
when India’s total trade with the Kingdom stood at just US$26 billion.
The Sino-Saudi relations which began only in 1990 have progressed
considerably. Saudi Arabia looks at China as a stable market for its oil
exports and seeks closer ties towards maintaining peace and security in the
INTERNATIONAL FACTORS