The Islamic Cultural Exception of GCC Countries

Journal of Middle Eastern and Islamic Studies (in Asia) Vol.9, No. 1, 2015 The Islamic Cultural Exception of GCC Countries QIAN Xuewen & WU Yihong 1 (Middle East Studies Institute, Shanghai International Studies University; Xinhua Center for World Affairs Studies) Abstract: The Cultural exception policy formulated by a country is to protect its culture not to be invaded by others. GCC is one of the most important economies in the Middle East, and the Islamic cultural exception is the principled position which the GCC countries adhere to in the WTO or FTA negotiations. In 20 years, the FTA negotiations between the EU and the GCC countries have been unsuccessful, and in 10 years the ones between the US and the GCC have experienced the same result. In the WTO negotiations, the GCC countries can make some concessions and cooperate actively. The FTA negotiations between China and GCC have also been carried out for 10 years. At the beginning of this year, the departments of Chinese Ministry of Foreign Affairs and senior officials have made unrelenting diplomatic efforts to promote the resumption of the FTA negotiations with the GCC. Combined with China s One Belt and One Road strategy, China had better launch a more flexible policy of economic and trade cooperation to cope with the GCC countries Islamic cultural exception. The One Belt and One Road strategy has special significance to China s economic development in the future. 1 QIAN Xuewen, professor of the Middle East Studies Institute, Shanghai International Studies University; WU Yihong, researcher, Xinhua Center for World Affairs Studies. This study is supported by the National Social Sciences Fund Project (14BGJ008), and the MOE Key Research Base Fund (2009JJD810010). 54

The Islamic Cultural Exception of GCC Countries Key Words: Cultural Exception ; GCC Countries; Islam; FTA Negotiations between China and GCC The Cultural exception policy everywhere is generally aimed at protecting a country s culture from invasion by other cultures. Cultural differences among diverse countries and different nationalities have resulted in dissimilar business culture, values and so on. In cooperation with foreign countries, some nations have combined the global trend with the specific situation in their nation. They have researched and developed a strategy to protect the interests of their own culture, by adhering to and promoting their own cultural traditions, and to deal with the economic pressure from superpower or dominant cultures, in order to safeguard their national interests in international relations. Currently, when advocating the cultural exception, some countries have their own focus and given different names to this policy. Among Arab countries in the Middle East, GCC countries have a stronger need in promoting the Islamic cultural exception. China is a developing country. In the FTA negotiations between China and the GCC countries, China should be fully aware of and pay attention to the Islamic cultural exception. I. The Origin of the Islamic Cultural Exception The Cultural exception policy has originated in the early 1990s. During the negotiations of the WTO s General Agreement, taking into account the importance of national and ethnic cultural independence, France initially opposed the inclusion of cultural products in the category of general trade and services, in order to protect their own cultural industries. A number of countries followed France in order to 55

Journal of Middle Eastern and Islamic Studies (in Asia) Vol.9, No. 1, 2015 enhance the international competitiveness of domestic cultural industries. They proposed the concept of cultural exception. They used cultural diversity as a weapon against trading partners in international cultural trade, setting up trade barriers to prevent foreign cultural products and investment from flooding into their domestic market in order to protect the interests of the national culture and national traditions. This statement and practices were firmly opposed by the US which insists on the philosophy of liberal market, and does not believe that cultural and other industries should be considered differently. This position is certainly related to the US strong cultural industries and their superpower status in the world today. From the US perspective, the so-called cultural exception is trade protectionism, and must be resolutely opposed. However, UNESCO eventually recognized the cultural exception. Cultural diversity was recognized as a basic human characteristic and common heritage, spreading cultural activities, goods and services of cultural identity, values and meanings has a dual nature--it is economic and cultural, not just commercial value. (Chinese National People s Congress, 2007: February 1). The cultural exception principle therefore has been recognized by the international community. II. FTA Negotiations with the GCC Countries In June 1988, the GCC and the European Community (predecessor of the EU) signed a bilateral cooperation framework agreement. Since then, the GCC and the EU have started negotiations on a free trade 56

The Islamic Cultural Exception of GCC Countries agreement (FTA). 1 The negotiations have lasted for 20 years and can be characterized as marathon negotiations. The two sides were very close to the target once, but due to some insurmountable constraints, they failed to reach agreement. In May 2009, Saudi Arabian Finance Minister Ibrahim al-assaf said that this was the FTA negotiation that starts earliest, but has least effective (Zhou, H., 2010: 75). The United States takes the FTA negotiations with the GCC countries very seriously. In May 2003, US President George W. Bush proposed the establishment of a US - Middle East Free Trade Area, aimed at promoting economic reform in the greater Middle East, through the expansion of bilateral trade and the completion of the Greater Middle East Free Trade Area within 10 years. Accordingly, the United States signed a free trade agreement with the GCC member states of Bahrain (the negotiation started in May 2003, reached an agreement in May 2004, and in September signed an agreement. The agreement entered into force in January 2009) and Oman (reached an agreement in October 2005, signed an agreement in January 2006, the deal entered into force in January 2009), respectively. Prior to this, the United States signed free trade agreements with Jordan 2 (started negotiations in May 2000; the agreement was signed in October, and entered into force in December 2009) and Israel (signing of the agreement in 1985 and being formally effective at the same time) and other Middle Eastern countries. In 2008, the GCC General Secretariat said that the GCC countries were ready to restart the FTA negotiations 1 Free Trade Area, or Free Trade Agreement, referred as the FTA, is a legally binding contract between two or more States which aims to promote economic integration. One of its objectives is to eliminate trade barriers and allow the free flow of goods and services between countries. 2 Jordan and Morocco filed the application in May 2011 to join the GCC; six GCC countries immediately welcomed them and the negotiations are currently ongoing. 57

Journal of Middle Eastern and Islamic Studies (in Asia) Vol.9, No. 1, 2015 with the United States as a whole. Previously, because the individual member states and the United States signed an agreement in private, the GCC once suspended FTA negotiations with the United States. After internal consultations, the GCC agreed that all members should enter the FTA negotiations with the United States as a whole. Apart from the EU and the United States, the GCC countries have also been in FTA negotiations with Australia, Japan, Turkey, China and New Zealand. Currently, only the FTA negotiation with Singapore has been formally completed, and FTA negotiations with the EU, MERCOSUR countries, the Nordic countries and other countries in Asia are still in progress. In early 2008, 27 years after the establishment of the GCC, the GCC announced the official launch of the Gulf Common Market. The common market includes the following 10 areas: personnel flow; government agencies and private sector employment; freelance; real estate; finance; stock; customs union; investment in a company or in the service industry; retirement and social security; health insurance and education services and so on. GCC officials said the launch of the Gulf common market would help promote external FTA negotiations. In particular, the Customs Union can help form a unified strategy mechanism in FTA negotiations and enhance the level of trade for the GCC member states. However, the GCC FTA negotiations are also facing three challenges of rising prices, economic unification and cultural differences (Department of Commerce, 2008: February 5). III. The Existence of Cultural Differences between the GCC Countries and Western Countries Negotiations of free trade agreements between the GCC countries 58

The Islamic Cultural Exception of GCC Countries and many of the world s economies were often interrupted or suspended. An important reason for this inconsistency is that there is a big cultural difference between the two sides: on the one hand, the GCC countries want protect their traditional culture; on the other hand, they struggle against the huge impact and penetration of foreign culture. However, the laws of the market will not cater to the wish of political leaders. The majority of people are welcoming cultural products from Western countries. Western countries cultural products have become an almost irresistible temptation. In order to resist foreign (especially Western) erosion of cultural products, these countries sometimes had to resort to unsuccessful practices, raising the banner of Islamic cultural exception, and refusing all Western products. In the era of globalization, young Arabs prefer products from Western countries, and therefore ideologically open to Western values. In today s Arab world, more than 60% of the population is below the age of 30. Because they have very easy access to cultural products from Western countries, many Arab parents are worried about their children becoming too westernized. In Saudi Arabia, Kuwait, the UAE, Oman and other Gulf Islamic countries, teenagers must strictly abide by the creed of Islam when they accept Western cultural products. In the clash of Eastern and Western cultures, young people often become disoriented (Guancha, 2013: September 24). In Western world, American cultural products have unique influence and impact. They have intangible and subtle cultural penetration to Islamic tradition, but the influence is difficult to estimate. When the delicious Big Mac, comfortable Nike shoes, and explosive Hollywood and other kinds of temptations appear on the Arab market, the younger generation is vulnerable. The youths are 59

Journal of Middle Eastern and Islamic Studies (in Asia) Vol.9, No. 1, 2015 inevitably confused a situation which is bound to generate conflicts and contradictions between different cultural experiences (Wu, Y., 2014). Among the GCC countries, the relationship between Saudi Arabia and the United States is relatively close. However, the American cultural products still suffered an Islamic cultural exception policy in the country: it was mercilessly boycotted and even rejected, and could not find any opportunity in the market. In such cases, businessmen in the Western countries naturally created a new business model that combined Western pop culture and traditions of Arab culture, so that Western countries cultural products could meet the needs of the Arab market, and be in line with Islamic values. For example, in the Arab countries, the Barbie dolls have been de-characterized with Western pop culture color, but start wearing Arab dress and headscarf. They become Arab women who are described as caring girls who are respectful of their parents. Such accommodation and change aim not only at the penetration of the Arab market, including GCC countries, but also to dominate the entire Islamic world market. VI. Cultural Exception in WTO Negotiations Early in the WTO negotiations, due to the special nature of traditional Islamic culture, the GCC countries have invariably adhered to the principles of Islamic cultural exception, emphasizing cultural diversity. After long and arduous negotiations, they eventually joined the WTO; these countries included the United Arab Emirates in April 1996, Oman in November 2000, Bahrain in January 1995, Qatar in January 1996, Kuwait in January 1995, and Saudi Arabia in December 60

The Islamic Cultural Exception of GCC Countries 2005. Because the GCC is the Middle East s largest regional economy, its members have important influence in the WTO. In order to smoothly join the WTO, the GCC countries also made corresponding commitments in the areas other than Islamic cultural exception, such as lowering tariffs, opening up the economy to foreign competition in the service industries, and no transition period to implement the WTO s various rules. This means that the GCC countries have been ready to ensure trade transparency and eliminate trade barriers in terms of intellectual property right protection and foreign investment environment. In the reduction of tariffs, Saudi Arabia has reduced the access standards in some industrial sectors, such as telecommunications, IT industry, pharmaceuticals, the civil aviation and the chemical industry, among many others. Similarly, the WTO has made certain concessions to Saudi Arabia, such as not requiring Saudi Arabia to import pork, alcoholic beverages and other merchandise that are opposed to religious rules; Saudi Arabia is not required to change the attitude towards trade with Israel; it is not subjected to criticisms on human rights issues; Saudization policy is not required to change; it does not have to lower food safety standards; not required to abolish subsidies for domestic energy and chemical raw materials/products; Saudi Arabia is not required to give up the recourse right in the face of foreign goods dumping. These are the concerns of the GCC countries as a whole. In FTA negotiations, the situation should be the same with that in WTO negotiations. The following study will take Saudi Arabia as an example to analyze the whole Arab world. In the FTA negotiations with the United States, Saudi Arabia has taken a principled but flexible Islamic cultural exception strategy: 1. The precondition is no harm to legitimate interests of the 61

Journal of Middle Eastern and Islamic Studies (in Asia) Vol.9, No. 1, 2015 Islamic kingdom. In order to accelerate the integration in the world economy, in the legal document of 600 pages, which Saudi Arabia submitted to the United States, Saudi Arabia made a series of important commitments to highlight its trade regime of flexibility and freedom. Meanwhile, in accordance with the WTO rules, it agreed to provide a transparent and predictable environment for foreign trade. However, there is one key word in the promise of Saudi Arabia: in order to protect public morality, culture and traditions, life and health of peoples, national security and other interests, Saudi Arabia reserved the right to restrict a certain number of imports and exports of goods and services, emphasizing the imported goods shall not prejudice the Kingdom s legitimate interests, and the legitimacy of the import list should be defined by Saudi Arabia. 2. The flexible use of negotiation strategies to maximize and safeguard their own interests. The Gulf is the world s largest oil producer, and the six GCC States all have abundant oil and gas resources except Bahrain. In response to climate change negotiations, Saudi Arabia and other GCC countries shared the same stand. They emphasized measures to address climate change and their impact of those measures on the world production of oil: they would have a negative impact on these countries domestic economy. However, due to the low influence of the Saudi Arabia-led GCC countries in international negotiations, it is difficult for them to influence the negotiation process. They often express and defend their interests in foreign negotiations through a strategy of synch, emphasizing the negative impact, postponing negotiations and advancing their own interpretation on procedures and rules 62

The Islamic Cultural Exception of GCC Countries 3. Opposition to private action; The GCC member states adhere to the principle of unity in the US-GCC negotiations. In 2003, the GCC announced the establishment of the Gulf Customs Union, and then started the FTA negotiations with some economies. Saudi Arabia is firmly opposed and resistant to private negotiations between the US and some member states, and reported this during the GCC Summit. In January 2008, in the GCC summit, member states reached a consensus after the operation of the Gulf common market. The GCC countries collectively started FTA negotiations with the United States. The United Arab Emirates, Qatar and Kuwait had terminated FTA negotiations with the United States since then. 4. To resist Western cultural infiltration of the Islamic faith. Both American and Saudi Arabian cultures are religious-centered: one is based on the Christian faith and the other on Islam, respectively. Although the United States is a Christian country, due to certain historical reasons, there is religious and cultural coexistence in the United States. Religion is both religion and ideology for American people; it is part of every aspect of people s lives. Similarly, Islam has significant impact on Saudi Arabian people and their lives. As the fundamental law of the country, the doctrine and strict norms of the Koran dominate in people s life. In free trade and foreign business activities, Saudi Arabia insists on the notion that the religious faith is inviolable. The phenomenon that a book or a film causes the wrath of the whole Islamic world is common. Indian writer Salman Rushdi has been threatened with death for over 30 years because he defamed the Islamic Prophet Muhammad. The US ambassador to Libya Christopher Stevens and three other diplomatic staff members were killed in Benghazi because a movie had desecrated Islam. Many 63

Journal of Middle Eastern and Islamic Studies (in Asia) Vol.9, No. 1, 2015 painful lessons from negative cultural events have brought the Americans some unforgettable memories. So, when it was in cultural negotiations with the Islamic countries in the Middle East, the US was very cautious. The United States is a typical multicultural, and multi-ethnic country. 5. To take urgent measures to protect the traditional culture. In the context of economic globalization and the global information technology, the traditional Islamic culture in Arab countries is inevitably affected by the foreign culture, especially Western culture. Although individual countries choose not to build public theaters in order to resist the invasion of Western culture, satellite TV, VCR, CDs and other media, and the Internet have already infiltrated the homes of ordinary people, resulting in vain government s effort to prevent their penetration. In the GCC, Saudi Arabia is a country strictly following the Islamic creed. However, currently, the annual number of students in the United States has risen to 47,000 (of whom female students account for about 30%), accompanied by relatives of nearly 70,000 people. These have presented a challenge to maintain and develop the nation s outstanding traditional culture. Saudi Ministry of Culture and Information established a cultural center dedicated to the protection of traditional culture. In addition, the Saudi Arabian government has taken a series of effective measures, to promote the unique, charismatic Islamic traditional culture, which has achieved remarkable success (Wu, Y., 2014). V. Unfavorable Factors in FTA Negotiations The GCC countries adhere to the Islamic cultural exception 64

The Islamic Cultural Exception of GCC Countries principle, which is subject to the domestic economy, foreign trade law and domestic as well as the external environment. These are the external negative factors of the GCC countries in FTA negotiations that cannot be avoided. 1. The asymmetry in the economic system compared to the Western countries. The GCC countries are essentially under a feudal type of economic system, with semi-capitalist features. They also have a mix of public and private characteristics. The economy in these countries is based on ties of kinship: big companies are semi-official, semi-tribal or semi-family businesses, and are both state-owned and private. The form of most companies is a combination of state and private ownership. Internally, they are filled with nepotism or kinship. Such companies often are subject to special care and protected by national policy. 2. Influenced by the Islamic tradition, trade laws and regulations are not mature. Although some of the GCC countries have joined the WTO, they have not been widely recognized by the international community as having a full market-economy status. The reason is that although these countries have implemented trade and open economic policies, there are still large gaps between the governments in economic management functions and WTO requirements of the market economy (Liu, X., 2010: 35). Most of the GCC countries have not built up a complete set of the Foreign Trade Laws, such as international service trade law, the law of the origin of import and export goods, import and export commodity inspection and quarantine laws, safeguard measures, anti-dumping, anti-subsidy law, market access, intellectual property rights, environmental law, and lower level 65

Journal of Middle Eastern and Islamic Studies (in Asia) Vol.9, No. 1, 2015 industrial protection law. 3. The insecurity in investment environment. Due to the incomplete laws and regulations related to foreign trade, the investment environment in the GCC countries still lacks effective legal protection. The local courts fail to deal with commercial disputes properly, thus harming the legitimate rights and interests of foreign investors; their rights are not fully protected. During the WTO negotiations, a number of related laws and regulations had been revised to meet the requirements of the WTO, but poor implementation of these laws and regulations have led to many problems. For example, some countries removed the requirement of agent companies in the provisions of the Foreign Investment Law in the first place, conditionally allowing foreign-owned companies, and then announcing the cancellation of the foreign-owned license. These practices have a negative impact on the future FTA negotiations. VI. Necessary Concessions and Self-improvement in Laws and Regulations In the FTA negotiations with Western countries, while adhering to the Islamic cultural exception, the GCC countries in some ways have made the necessary concessions and self-improvement in laws and regulations. 1. The maximum proportion of foreign investment in local banks has been raised up to 60% from the previous 49%. The United States and other Western countries usually require foreign investment ratio of at least 68% in the negotiations, but they conceded when dealing with the GCC countries. 2. To allow foreign insurance companies in the GCC countries 66

The Islamic Cultural Exception of GCC Countries with foreign direct investment or a joint venture with a local insurance company. Although the proportion of foreign investment is limited to 60%, it allows 10% of profits to be returned to investors, and the rest 90% retained as an asset. 3. In the area of services, lawyers, accountants, architects, consultants, engineers, doctors and other staff personnel are allowed to enter the GCC market. For companies in the service industry, foreign stockholders are allowed to own 75% of the stock; in the IT industry, pure foreign companies with 100% foreign money are allowed. 4. Retail industries are gradually opening up to foreign investment, allowing foreign wholesale and retail to occupy 51% of the share at the beginning, and increased to 75% after three years, and endowed them with national treatment at the same time. 5. They revised the Foreign Investment Act to further improve the investment environment and provide more incentives for foreign investors, especially in high value-added industries, in order to encourage foreign investment in the GCC market, and to promote the healthy development of the regional economy. Under the Act, foreign-owned enterprise or joint ventures can start a business only if they meet the requirements of the relevant legal provisions. The minimum investment amount is approximately $500,000 for service projects, approximately $1.5 million for industrial projects, and approximately $6 million for agricultural projects. Foreign investors do not need to look for a local agent before they own the company s property, and they can also apply for a loan from the country s Industrial Development Fund. 6. In terms of the establishment of a registered trade companies, the law of the GCC countries stipulates that foreign companies must 67

Journal of Middle Eastern and Islamic Studies (in Asia) Vol.9, No. 1, 2015 cooperate with domestic foreign trade companies, and should register the new enterprises and open bank accounts in the name of the domestic commerce companies. The commerce company will be an agent to guarantee the foreign company s various economic and trade activities. Foreign companies can operate technology services and customer service projects, but are not allowed to be directly involved in commodity trade (Xinhua, 2004: December 7). 7. Free trade policy for general merchandise, and there is no restriction on the number or price of imported goods. However, products that do not comply with the provisions of Islamic doctrine are prohibited in trade, such as narcotics, alcohol, weapons, pornography, pork, wine and alcoholic products, etc. Imported foods must also be strictly under the national Health and Health Act, which requires both origin marking and the shelf life of food. In addition, some of the items must be approved by the relevant departments before being imported, such as natural bitumen, a variety of live animals, agricultural seeds, a variety of drugs, fresh meat, frozen meat, chemicals or dangerous goods, wireless equipment, horses, all kinds of alcoholic goods and a variety of books, magazines, films and tapes (Ministry of Commerce, 2007: April 5). 8. Improve or modify the laws and regulations in order to meet the needs of foreign trade negotiations. This includes: (1) Anti-Money Laundering Law, aiming at combating crime, illegal earnings, cash flow of illegal income, black market foreign exchange and other money laundering activities, and also combating terrorist organizations and terrorist financing. (2) Joint Anti-dumping, Anti-subsidy Law and the Protection of the GCC Member States, aiming at combating dumping of the external economies towards the GCC market policy to protect 68

The Islamic Cultural Exception of GCC Countries domestic industries from industrial dumping of similar products. (3) Financial Market Law is an important milestone in the GCC countries in the field of financial markets, whose goal is to regulate financial markets with a new concept of development, enhances the attractiveness and confidence in the GCC financial markets through norms and transparency, protect operation of a fair financial market. (4) Company Law, covering all matters, including the establishment, reorganization, merger, liquidation, and dissolution for all types of companies. (5) Patent Law clarifies patent registration system. Regardless of nationality, all natural or legal persons can apply for patent protection for manufacturing process or product of the invention. The patent is valid for 15 years, and can be extended for five years. (6) Trademark Law provides a unique trademark that is clearly different from the other commodities in terms of the name, the expression, language, numbers, graphics, etc. Trademarks that use words, styles, and pictures contrary to the doctrine of Islam will not be allowed in the country. It also prohibits the use of flag and emblem of the Kingdom or another country s flag and emblem as a trademark; trademark law allows anyone whose trademark registration was rejected to file the complaint with the Minister of Commerce and Industry within 60 days after the notice date on receipt. (7) Anti-Fraud Law, aiming at protecting public health, products and merchandise quality and safety, and protecting citizens from being deceived. It requires all merchants to comply with religious rules and creeds of Islam in all their business activities and avoid fraud and deception. (8) Competition Law, which is designed to protect and encourage fair business competition and discourage behavior that 69

Journal of Middle Eastern and Islamic Studies (in Asia) Vol.9, No. 1, 2015 may harm legitimate competition, in addition to public institutions and state-owned companies, all practitioners in the Saudi Arabian market, including commercial organizations and companies, are required to follow this law. (9) Catalog of industries that foreign investment is prohibited, including military manufacturing, weaponry, explosives production (including for civilian use), uniform production and oil exploration and production. In addition, foreign investors may not participate in 16 services areas including real estate investment, security and detective services, insurance, publishing, telecommunications services, army catering, real estate brokers in Mecca and Medina, the investment (Ministry of Commerce, 2007: April 5). However, as time goes on, some of these projects are gradually opening up, such as oil exploration and exploitation. VII. Islamic Cultural Exception and Its Implications for China The China - Gulf Cooperation Council Free Trade Area negotiations (referred to as the China-GCC FTA negotiations) started in July 2004. In April 2005, the first round of negotiations was held in the Saudi capital Riyadh. At that time, such negotiations were mainly based on the economic and trade relations between China and the GCC states which are experiencing rapid development, with an average annual growth of bilateral trade of more than 40%. The two sides have highly complementary economies. They have tremendous trade potential, as well as potentials in mutual investment and a series of favorable conditions for cooperation in the energy sector. The trade negotiation covered the areas including trade in services and 70

The Islamic Cultural Exception of GCC Countries economic and technical cooperation and other goods. Subsequently, the China-GCC FTA negotiations have gradually entered a marathon mode, so far, China and the GCC have held five rounds of FTA negotiations and two working group meetings, but then negotiations suspended after 2009. At the beginning of 2014, the China-GCC FTA negotiations have become the focus of efforts to promote bilateral cooperation. On January 17, President Xi Jinping met with the GCC delegation that was attending the third round of China-GCC strategic dialogue and said the China-GCC FTA negotiations had been going on for 10 years, and both sides had done a lot of basic work. He hoped that both sides could speed up the signing of the agreement, and promoted construction of the Silk Road, the 21st century economic zone and maritime Silk Road together (Xinhua, 2014: January 18). On March 13, when President Xi Jinping met with the Saudi Arabian Crown Prince, Deputy Prime Minister and Defense minister Salman, he again highlighted that China was willing to make joint efforts with Saudi Arabia to accelerate FTA negotiations (Xinhua, 2014: March 14). The next day, when Prime Minister Li Keqiang met with Crown Prince Salman, he also said that China was willing to restart negotiations as soon as possible on a free trade area with Saudi Arabia and other GCC member states, based on the current foundation and progress. China would like to see a high level of cooperation, reaching agreements of mutual benefit, and win-win situation in order to enhance trade and economic cooperation comprehensively between China and the GCC states (Zhai, L., 2014: March 14). On June 3, at the Great Hall of the People, Premier Li Keqiang held talks with Prime Minister of Kuwait Jaber. He emphasized that China attached great importance to developing relations with Arab 71

Journal of Middle Eastern and Islamic Studies (in Asia) Vol.9, No. 1, 2015 countries, including the GCC countries. He appreciated Kuwait s effort in deepening China-GCC and China-Arab relations as rotation Chairman of the GCC and the Arab League summit. He insisted that China supported Kuwait s effort for an early resumption and completion of the FTA negotiations, as well as promotion of the construction of the China-Arab forum. He hoped bilateral strategic cooperative relations would make new achievements (Li, H., 2014: June 3). On November 3, at the People s Great Hall, President Xi Jinping held talks with Qatari Emir Ertamimu. He said that China hoped Qatar could push to accelerate China-GCC FTA negotiations (Zhang, S., 2014: November 3). In addition to the top-level diplomacy, the Chinese Foreign Minister, Vice Minister of Foreign Minister and ambassadors in the GCC countries have also made a positive contribution to promoting FTA negotiations. However, knowing about the FTA negotiations of the European Union, the United States and other powerful economies with the GCC countries, the path of negotiations between China and GCC states may not be too long, though they may not be easily achieved. China may learn from the experience of the United States and the European countries. 1. The context of China-GCC cooperation is different from that of Western countries. China and states on One Belt and One Road have a long history of exchanges and profound traditional friendship. They share a common history of colonial and other similar experiences. Geographically, these states are closer to China. They all belong to the Oriental culture and have similar cultural and religious background with those in the Western part of China. Looking from eastern China, the Middle East is very far away; however, looking from western 72

The Islamic Cultural Exception of GCC Countries China, the Middle East at its doorsteps. The development of economic and trade relations between friendly neighbors are both blessed and unalterable. 2. In July 2014, the government officials of the Ningxia Autonomous Region expressed a wish to learn from financial opening of Shanghai FTA experience, and build the channel for the economic and trade cooperation between China and the GCC countries. This is a useful experience from Ningxia s exploration in recent years. Based on the development of the China-Arab States Expo, the Arab countries are more willing to cooperate with China, and look forward to receiving Chinese investments (Li, B., 2013: September 25). China s western region has some advantages in the China-Arab economic cooperation, so that in an attempt to restart the China-GCC FTA negotiations, Ningxia and other areas, which have more cultural advantages, can be area model for exploring the road to China-GCC cooperation. 3. The construction of a free trade zone is the common aspiration of both sides. The leaders of six countries of the GCC have already expressed the willingness to cooperate with China on numerous diplomatic occasions. They are willing to strengthen friendly cooperation with China in various fields and actively participate in the One Belt and One Road construction. Arab countries appreciate Chinese efforts to advance FTA negotiations. They believe that obstacles cannot stop the establishment of a free trade zone, and are willing to play an active role to promote the early resumption of negotiations on a free trade area (Ministry of Foreign Affairs). 4. The GCC countries are all Muslim countries. They will inevitably insist on Islamic cultural exception during the FTA negotiations. Islamic doctrine is the basis of life for Muslims by which they must abide. Therefore, there is no room for negotiation on this 73

Journal of Middle Eastern and Islamic Studies (in Asia) Vol.9, No. 1, 2015 part. Based on the various laws and regulations in Islamic countries, strict compliance with the fundamental law of Islam is the basic criterion. This is a fact which China must objectively face. Islamic traditions in the Arab countries must be given respect. If China treats them with a chauvinistic attitude, the result would likely be counterproductive. 5. Adapting to the times, accommodating the international community, cooperating with other countries in the world, and participating in the global village, are true wishes of the GCC countries. The GCC countries are also trying to be more flexible with respect to their principled stance. They continue to improve laws and regulations for international economic cooperation, even make concessions in order to respect the concept of economic and trade in contemporary world. In sum, they also want to advance with the times. In this regard, China can fully use the advantage in factors such as geo-economic and political history, cultural traditions and other aspects of the cultural advantages to go further than the United States and Europe. 6. FTA negotiations with developing countries like the GCC states are different from negotiations with developed countries. The balance of strength is different, so does the role of China. With respect to that the GCC countries may adhere to the principles of Islamic cultural exception in the FTA negotiations; the Chinese side may also be more understanding and tolerant, patient and flexible, with more respect and mutual benefit and win-win considerations. 7. The One Belt and One Road strategy is extraordinarily significant for the development of China s economic future. In terms of the geopolitical environment of the One Belt and One Road, the vast majority of Islamic countries, followed by the Buddhist countries, 74

The Islamic Cultural Exception of GCC Countries surround the PRC. In order to better implement the One Belt and One Road strategy, the government needs to be prepared to deal with the Islamic cultural exception and even the Buddhist cultural exceptions and introduce appropriate foreign trade and economic cooperation policies with greater flexibility. In terms of specific steps, China can start from the experimental areas or local trials, which is more flexible and easier to control. It is also more significant and steady for coordinating the overall situation of both domestic and foreign affairs. In a nutshell, the GCC countries are in the convergence zone of the western end of the One Belt and One Road, which are the natural and important partner for China to promote the One Belt and One Road construction. Both sides can cooperate based on this, contributing to effective docking of resources, and capital, market potential, to optimize the allocation and promotion of free and orderly flow of resource elements between China and the GCC countries, so that the Middle East economies can be more closely linked with the East and Southeast Asian economies, and then further promote the overall development of the economies along the One Belt and One Road (Chinese Embassy in Saudi Arabia). Reference Chinese Embassy in Saudi Arabia. Chinese ambassador in Saudi Arabia Li Chengwen introduced One Belt and One Road in the Middle East Report, Retrieved May 1, 2014 from http: //www.fmprc.gov.cn/mfa_chn/wjdt_611265 /zwbd_611281/t1148199.shtml. Chinese National People s Congress (2007: February 1). Convention on the Protection and Promotion of the Diversity of Cultural Expressions (Passed by the 33rd 75

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