INTHEBLACK August 2025 - Magazine - Page 23
spanning economic, military and other
strategic fields such as food security,
especially given that India, Pakistan
and Sri Lanka are significant international
food producers.
However, he says ongoing tensions between
India and Pakistan highlight how
inter-regional volatility has, at times,
disrupted South Asia’s collective push into
the Gulf.
In addition to Asian construction firms
and their technology partners benefiting from
large-scale urban projects in the Gulf States,
Neve expects renewables infrastructure to be
a boon for Chinese players in particular.
“China is the world’s largest producer of solar
panels,” he says. “The Gulf has large areas of
cheap available land and plenty of sunshine.
So, there’s a natural partnership there.”
Yet there are risks. The Gulf remains
a geopolitically sensitive region. These
dynamics can create uncertainty for trade
routes and investment security.
According to Kateb, security is the biggest
threat to Gulf success and, if not managed,
could hurt the prospects of international
partners and investors in the region.
The possible silver lining is the Chinabrokered conciliation between Iran and Saudi
Arabia in 2023 following years of bitter
rivalry. “It was really a milestone because
it was the first time China played a major
role in settling a crisis in the Middle East,”
Kateb says.
Oil price volatility is also an issue in
the region, where the economies of most
Gulf States remain heavily reliant on
hydrocarbons. Asia’s decarbonisation agenda,
which will feature greater use of electric
vehicles and renewable hydrogen, could cut
long-term demand for Gulf hydrocarbons.
Fluctuations in oil prices can also impact
government revenues and spending on
infrastructure or other public-sector-led
projects that attract foreign investors.
Environmental, social and governance
(ESG) issues remain on the agenda for
the Gulf States. International investors are
increasingly weighing up such factors and
fossil fuel-dependent Gulf States may face
scrutiny from Asian institutional investors
unless they demonstrate meaningful progress
on sustainability targets.
BUSINESS IMPLICATIONS OF ASIA’S
MIDDLE EAST PIVOT
As he ponders the future of Gulf–Asia ties,
Kateb acknowledges that for a long time
GCC countries have enjoyed a “privileged
ACTION POINTS
• Target non-oil trading
opportunities in a Gulf market
seeking to diversify.
• Be conscious of risks in Gulf
trade because of regional
security concerns.
• Forge stronger relationships
in the Gulf region through
face-to-face connections
and participation in business
delegations.
relationship” with the US. However, in a
shifting global landscape, there is an apparent
and growing willingness to explore new
diplomatic and economic alliances.
The unknown factor is the possible impact
of the Trump administration’s global tariffs.
Although it could undermine international
trade and present risks for investors, there is
a chance that it could promote closer
economic ties between the Gulf and Asia as
they push ahead with non-US partnerships.
Acknowledging that Gulf States could be
vulnerable if they are forced to choose sides
between American and Asian partners,
Kateb advocates continuing to adopt a policy
of “multi-alignment” on the global stage.
Ip says that while Asian traders such as
Hong Kong cannot control the moves of the
White House, they can be proactive and seek
new and ongoing business opportunities in
the Gulf States. “We like to have a plan B
and are building more friendships between
Middle East and Asian countries to diversify
our revenues.”
He adds that China has taken action
to strengthen ties with the Middle East and
has policies in place to support companies
with financing and entering new markets.
With the Gulf–Asia corridor no longer
being solely reliant on an oil lifeline as it
turns to alternatives such as green hydrogen,
Bhamidipati believes there is a new
“connectivity corridor” that will serve Asian
nations well in a multipolar world.
“This is going to continue,” he says. “This is
going to be a major bridge that will not shake
because there is ambition on both sides and
there’s political willingness on both sides
to look towards Asia.” ■
LISTEN
to this story
READ
an article on Asia’s
green transition
EXPLORE
CPA Australia’s
range of ESG
short courses
intheblack.cpaaustralia.com.au 23
