Saudi threatens legal action against China

Saudi Arabia has threatened to take legal action against China for its decision to introduce high customs tariffs on the Kingdom’s petrochemical exports for alleged dumping, a Saudi newspaper reported on Tuesday.

Abdul Rahman Al Juraisi, Chairman of the Saudi-Chinese Business Council, said the world’s dominant oil power would first resort to “all positive measures” to persuade China to drop that decision before resorting to legal procedures.

“The Kingdom will resort to the competent judicial institutions if it does not see any response from the Chinese side in dumping accusations against Saudi products,” he told the Arabic language daily Aleqtisadiah.

Juraisi said the issue would be raised at next week’s meeting in Riyadh between Saudi and Chinese officials and businessmen, adding that he hoped the Chinese side would “demonstrate understanding and cooperation”.

“The dumping issue is being tackled at a high level…the Saudi side will present strong evidence showing local products can compete with other products without the need for subsidizing,” he said.

In recent comments, a Saudi official urged Riyadh to take retaliatory measures against China if it pursues that action and also called for support from the Kingdom’s partners in the six-nation Gulf Cooperation Council (GCC).

Abdul Rahman Al-Zamil, chairman of the executive council of Saudi Export Development Centre (SEDC), said the Kingdom could take action against Beijing decision by curbing what he described as fake Chinese products.

Zamil branded China a “friend who has turned against us” and said any Saudi official response must send a strong message to China.

He said that Beijing’s measures came at a time when the GCC countries were close to finalizing a free trade pact with China that will ensure free access to the markets of both sides.

Zamil said China had no grounds to pursue the dumping investigation on imports of methanol and butanediol (BDO), adding that Saudi authorities had not reacted to complaints by local dealers about dumping of Chinese fake products and trade fraud in Saudi Arabia and other regional markets.

Methanol and BDO make up between 10 and 15 per cent of the Kingdom’s $2bn annual petrochemicals exports to China.
China maintains strong political and economic links with all GCC countries and has become a key importer of oil. Its reliance on Gulf oil supplies is set to steady increase in the coming years as its own crude wealth is eroding and the most populous nation on earth is recording rapid growth in energy consumption.

Between 1999 and 2008, GCC-Chinese trade jumped by at least 40 per cent annually to reach around $70bn in 2008, including nearly $42bn worth of exports by the GCC countries and $28bn worth of imports.

Saudi Arabia, the top oil supplier to China, has remained the largest trading partner of Beijing, with exports of around $31bn and imports of $11bn.

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