China's building materials companies should cash in on the opportunities being presented in Saudi Arabia's booming capital construction market, a trade official said.

Xie Zhongmei, director of the department of West Asian and African affairs at the Ministry of Commerce, said there is huge demand for building materials in the largest economy in the Middle East, which is expected to push forward $100 billion of infrastructure projects by 2016.

As an economy dominated by the oil industry, most of the building materials being used in Saudi Arabia, apart from concrete, are imported.

For example, 40 percent of the 12 million metric tons of steel used in 2011 in the kingdom were produced and imported from overseas.

"China's building products have notable comparative advantages in the global market," added Chen Feng, chairman of China Chamber of Commerce of Metals, Minerals & Chemicals Importers and Exporters.

The ministry and the chamber will be actively promoting the country's building materials and other construction-related goods in December at the third China Commodities Expo-Saudi Arabia in the capital Riyadh.

"The fair will help promote brand recognition for made-in-China products and hopefully help us build a future platform for suppliers and buyers," Chen said, adding that he expects more than 3,000 professional buyers to attend the event.

He said Chinese products attracted great interest among local customers during previous trade fairs in the country and there has been considerable interest from some to invest in setting up factories in Saudi Arabia.

The country has been China's largest trade partner in the Middle East for 11 consecutive years, while China is also the second-largest source of imports to Saudi Arabia.

Trade between the two countries grew nearly 30 percent year-on-year to $38 billion in the first half of this year, said Xie. She is confident the annual amount will reach $70 billion this year, with the annual growth rate continuing at 30 to 40 percent.

China has set its overall export growth target at 10 percent this year.

Shi Shiwei, a professor with the University of International Business and Economics in Beijing, said a lot of Chinese companies are expanding their export horizons from solely developed economies to more diversified targets including Latin America, Africa and the Middle East.

"The emerging industrial countries in these regions are enjoying faster economic growth and purchasing power. Chinese products are more suitable for them because of the high performance-price ratio," Shi said.

As an example of such an emerging economy, Xie said: "Saudi Arabia has a stable political situation and the government is carrying out positive fiscal policies relying on its strong financial position benefiting from surging oil prices."

The International Monetary Fund has projected economic growth of 6 percent for Saudi Arabia in 2012. Because of its fast-growing population the country will need 2 million new houses to be built over the next 10 years, creating a potential market worth $210 billion.

Meanwhile, nearly $3 billion will be invested in highway and road projects this year.

To improve their chances of further business in the region, Xie suggested Chinese companies should focus more on high-end products.

He advised that they also consider building production plants in Saudi Arabia to better meet local demand and possibly satisfy further orders from other nearby countries with expanding economies, such as the United Arab Emirates and Qatar.

There has been around $800 million of Chinese investment in Saudi Arabia so far, but investment in the other direction is estimated at more than $6 billion, if third-party investment is taken into account, Xie said.

Trade with India to grow to $100b by 2015

China has promised to allow the import of more products from India to close an existing $23.4 billion trade gap between the two countries, despite a series of trade disputes in recent months.

Officials said that both sides have agreed to work toward a "more balanced" trade model after a Chinese delegation led by Minister of Commerce Chen Deming visited India recently.

Chinese exports to India reached $73.9 billion in 2011, with its Indian imports worth $50.5 billion, according to statistics from the Chinese General Administration of Customs.

A ministry source told China Daily that the Indian government recently submitted a list of more than 900 of its preferred export items to China. But he declined to elaborate on what specific goods China has agreed to allow more access to.

Indian statistics showed it took China 10 years to rise to become the largest source of India's imports, from the seventh.

But trade relations between the two Asian powers have been strained after a series of spats.

Chinese officials were reported by Reuters to have raised India's decision last month to impose a tariff of 21 percent on imported power equipment - a controversial move widely seen as targeting Chinese firms which have emerged as the world's main suppliers.

For its part, India has long complained that its companies, from IT and services to pharmaceuticals and Bollywood filmmakers, are unfairly restricted when trying to enter the Chinese market.

India primarily sells copper and iron ore to China and imports high-end manufacturing and high-tech goods.

The ministry source said the delegation had concluded: "This week's bilateral talks were positive."

Chen met his Indian counterpart, Commerce and Industry Minister Anand Sharma. The two ministers announced they had agreed to grow bilateral trade to $100 billion by the end of 2015.

Chen said the two sides are "committed to meeting that target in a more balanced way".

"There exists a trade imbalance between China and India but China does not purposefully seek a trade surplus and has been actively expanding imports from India," Chen added.

"China expects Indian companies to promote their goods in China through all kinds of platforms and to enlarge their exports to China."

Sharma recently said he planned to press China to import more from India, particularly pharmaceuticals and information technology services, in which he said India enjoys advantages.

Contact the writers at weitian@chinadaily.com.cn and dingqingfeng@chinadaily.com.cn

(HK Edition 09/08/2012 page8)