On July 9, 2018, President Xi Jinping pledged a package of US$20 billion in loans and US$ 106 million in aid to Arab countries of the Middle East. He announced that financial aid will be distributed to Palestine, Jordan, Lebanon, Syria and Yemen. Xi added that a “consortium of banks from China and Arab nations, with a dedicated fund of $3 billion” will be set up (Reuters, 2018).
This was part of what Xi described as the “oil and gas plus” model to revive economic growth and expand cooperation “on oil and gas, nuclear and clean technology” (Reuters, 2018). The announcement was made during the eighth China-Arab Cooperation Forum in Beijing, which brought together foreign ministers from 21 Arab Countries, as well as the General Secretary of the Arab League Ahmed Aboul Gheit.
In 2015, China consumed nearly 10 million barrels of oil and 52 million cubic meters of natural gas a day. According to a British petroleum report, China’s demand for oil is expected to increase by 61% and natural gas by 186% by 2035 (B.P., 2016). Given its readily access to China and proven hydrocarbon reserves, the Middle East has been the largest supplier of petroleum resources to China since 1995, currently supplying, as of 2016, 57% and 33% of China’s total crude oil and natural gas consumption, respectively (MIT, 2018).
While China has made significant advances in reducing its reliance on oil and natural gas, the country’s dependence on these resources is not expected to decline significantly in the near future. China’s renewed commitment to Middle East oil and gas highlights Beijing’s continued interest in sustaining its current energy supply chains and expanding China’s role in the Middle East’s energy sector.