China and Arab states set to shine together

Precaution needed in Belt and Road cooperation

Ma Xiaolin, a professor at Beijing Foreign Studies University

The Belt and Road Initiative is set to provide an exceptional platform for Sino-Arab cooperation. But three issues require particular attention.

First, security ought to be made the top priority as certain Arab states are embroiled in conflicts, even civil wars, which make investment risky. Over the past eight years, China has had to evacuate its nationals from Libya, Yemen, Egypt and Syria due to security concerns and Chinese investment and projects there have suffered severe losses.

Second, the business environment in some Arab states is not ideal, and these countries need to improve legislation, social services, and support facilities to attract more Chinese investment. For example, many Arab states forbid foreign capital from owning a company and restrict the outflow of foreign capital, which increase the cost of investment. In this regard, Oman has set a good example by allowing the free flow of foreign capital.

Third, some Arab states' militaries exercise too much control over enterprises, making rent-seeking a threat. This reality must be considered to avoid unnecessary troubles for future investment in the Arab world.