Xi pledges $27b in loans to revive Middle East

Chinese President Xi Jinping greeting Saudi Arabia's Foreign Minister Adel bin Ahmed Al-Jubeir at a China-Arab forum in Beijing yesterday.
Chinese President Xi Jinping greeting Saudi Arabia's Foreign Minister Adel bin Ahmed Al-Jubeir at a China-Arab forum in Beijing yesterday.PHOTO: REUTERS

China also providing extra aid to region set to play a vital role in its Belt and Road Initiative

BEIJING • Chinese President Xi Jinping yesterday pledged a package of US$20 billion (S$27 billion) in loans, and about US$106 million in financial aid, to Middle East nations, as part of what he called an "oil and gas plus" model to revive economic growth in the region.

Beijing has ramped up engagement in the Middle East in recent years as Arab nations play an important role in Mr Xi's signature Belt and Road Initiative, a US$1-trillion infrastructure programme billed as a modern revival of the ancient Silk Road that once carried fabrics, spices and a wealth of other goods between Asia, Africa, the Middle East and Europe.

The Arab states' position at the centre of the ancient trade route makes them "natural partners" in China's undertaking, Mr Xi told a meeting of representatives from 21 Arab nations in the Chinese capital.

Development was also key to resolving many security problems in the Middle East, he said.

"We should treat each other frankly, not fear differences, not avoid problems, and have ample discussion on each aspect of foreign policy and development strategy."

China would offer aid worth 100 million yuan (S$21 million) to Palestine to support economic development, besides providing 600 million yuan to Jordan, Lebanon, Syria and Yemen, he added.

A consortium of banks from China and Arab nations, with a dedicated fund of US$3 billion, will also be set up, he said.


It was unclear what the relationship between the bank consortium, financial aid and the overall loan package would be.

The loans will fund a plan of "economic reconstruction" and "industrial revival" that would include cooperation on oil and gas, nuclear and clean energy, Mr Xi said.

He also urged "relevant sides" to respect the international consensus in the Israel-Palestine dispute, and called for it to be handled in a just manner.

China, which traditionally played little role in the Middle East conflicts or diplomacy, despite its reliance on the region for energy supplies, has been trying to get more involved in resolving long-standing disputes.

China says it sticks to a policy of "non-interference" when offering financial aid and deals to developing countries, which, coupled with development, can help resolve political, religious and cultural tension.

Beijing has already provided vast sums to Arab countries, with Arab League state Djibouti - where China opened its first overseas military base in 2016 - alone owing some US$1.3 billion, according to estimates from the US-based China Africa Research Initiative.


A version of this article appeared in the print edition of The Straits Times on July 11, 2018, with the headline 'Xi pledges $27b in loans to revive Middle East'. Print Edition | Subscribe