Over the past decade, relations between China and the Gulf have evolved from transactional energy trade into an emerging strategic partnership grounded in shared decarbonization, economic diversification, and development goals. Once centered on fossil fuels, this relationship now increasingly pivots around renewable energy, green technology manufacturing, and the mutual imperative to adapt to economic pressures and changing energy demands.

This transformation reflects deeper structural changes in both economies. China’s domestic decarbonization agenda and slowing post-COVID growth have spurred a strategic turn outward, driving investment in renewable energy manufacturing and overseas industrial partnerships. At the same time, Gulf states are confronting declining long-term oil revenue projections and the need this places to accelerate economic diversification from their present rentier fossil fuel export-led economies. In this context, Chinese technology and manufacturing capacity offer the Gulf a pathway to accelerate economic diversification and strengthen its renewable energy industries, whilst the region provides China with fast-growing markets, reliable investment destinations, and strategic footholds in global energy transition value chains.

The convergence of these interests marks a shift in the political economy of Sino-Gulf relations. No longer defined solely by oil supply and demand, the partnership increasingly spans co-production, research collaboration, and high-level diplomatic coordination, anchored by strong alignments and synergies between the Belt and Road Initiative (BRI), Vision 2030 agendas, and new institutions such as the Shanghai Cooperation Organization (SCO). Collectively, these mechanisms are institutionalizing a more permanent and politically consequential relationship between China and Gulf countries.

The relationship is heterogeneous across the Gulf states, with variations in political engagement, investment scale, and areas of cooperation. Saudi Arabia is pursuing large-scale renewable manufacturing under Vision 2030. The United Arab Emirates (UAE) is emerging as a global clean energy financier and project partner through its solar company, Masdar, whilst Oman is positioning itself as a hydrogen exporter. 

Meanwhile, Bahrain and Kuwait’s engagements with China are characterized by logistical and financial partnerships, and Qatar has announced renewable energy cooperation initiatives with China.  

The different trajectories are distinctive to the Gulf states’ own market and industrial conditions and shape the patterns of engagement with China. Yet, this deepening engagement also exposes both sides to vulnerabilities. The growing dependence of Gulf states on Chinese technology and supply chains risks constraining their industrial sovereignty. Additionally, alignment with China could potentially complicate compliance with European Union (EU) trade and carbon regulations such as the Carbon Border Adjustment Mechanism (CBAM) and compromise market access for Gulf-manufactured low-carbon technologies. Meanwhile, the intensifying rivalry between China and the United States (US) places Gulf states in an increasingly delicate balancing act between their leading energy investor and their longstanding security guarantor.

To manage these interlocking opportunities and risks, Gulf policymakers must adopt a deliberate, regionally coordinated strategy that leverages Chinese engagement to build domestic capacity, enhance renewable supply chain resilience, and align with global carbon standards, without overexposure to geopolitical or market risks. For China, sustaining credibility as a long-term investment partner in the Gulf will require openness to reciprocal investment and to technological and research exchanges that support joint innovation and capacity building in the region.

The China-Gulf relationship is no longer confined solely to energy, but encompasses a broader convergence in climate diplomacy, technological innovation, and sustainable development. If harnessed wisely, it could position both China and the Gulf as pivotal actors in shaping the global energy transition. If not effectively managed, it risks reinforcing new dependencies.