Not so long ago, trade between the Gulf region and Asia was a fairly simple affair. Energy in the form of oil and gas flowed east, and to pay for it all, capital flowed west.
But in recent years, simplicity has given way to complexity and to greater flows of capital than ever before. Trade between the two regions “is set to soar in coming years, expanding well beyond energy,” according to a May 2 research note written by HSBC’s chief Asia economist, Frederic Neumann.
Neumann’s team believes the annual two-way flow of goods and services will more than double between 2022 and 2035, to $1.9 trillion from $950 billion.
Bilateral corridors with real power and relevance are emerging. China and Saudi Arabia is the obvious example. Saudi-made oil and plastics fuel China’s still-growing economy, while Beijing looks to Riyadh to support the internationalization of its currency, the renminbi.
Another emerging power-corridor links the UAE and India. In its report, HSBC tips annual trade between the pair to hit $14 billion by 2035, against $6 billion in 2022. India is furiously exporting the likes of pharmaceutical goods. In turn, Indian digital services firms are proving an “especially promising” target for UAE investors, the report finds.
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