Contents

Ⅰ　Main Report

1　Low Oil Prices and Impact on Middle East Economy and Geo-politics【Yang Guang】／001

Abstract:International oil prices have collapsed since the second half of 2014. Apparently, this sharp change resulted from the unbalanced demand and supply, as well as from the geo-political situation in the Middle East. The in-depth driving forces however, are related to a game of strategic interests. This game could drive the international oil marked into a new low price cycle that may last for years. A sustained low price cycle may produce more negative than positive impact on the Middle East economy. It may also play a role in promoting the Iranian nuclear negotiation but would not change the multi-polarized geo-political structures in the Middle East.

Keywords:Oil prices；Middle East；Geo-politics

Ⅱ　Special Report

2　OPEC’s Status and Role in the Oil Market【Liu Dong】／015

Abstract:From the perspective of resources, production and exports, OPEC is the world’s most important oil supplier, and its importance in the international oil market is still rising steadily in recent years. However, from the point of view of organizational mechanism, due the reason that production constraint mechanism keep loose, quota observance rate keep falling, OPEC is also gradually losing its cartel glamour. In OPEC, only several core countries led by Saudi Arabia still delivers influences to the international oil market positively at this moment. And for the current oil policies, OPEC devoted itself to keep the oil demand and supply on a “modest” tense balance. Although this policy does not help to dampen short-term fluctuations of oil prices, it is still very important for maintaining and influencing the high oil prices equilibrium formed in the new century.

Keywords:OPEC; Cartel; Oil Prices

3　An Analysis of Saudi Arabia’s Market Behavior【Chen Mo】／029

Abstract:During the low oil price period since 2014, Saudi Arabia did not play the classical role and reduce production. Instead, it earned high profit due to the changes in prices of the international oil market and maximized its market share, which serves the strategic profit of the country and ensures its leading position in the oil market. The way Saudi Arabia relies on its reserves, sovereign wealth fund and liquidity can prevent itself from the shock of low oil price.

Keywords:Saudi Arabia;Oil Price;Market Behavior

4　Impact of Low Oil Prices on the Middle East Financial And Investment Market【Jiang Yingmei】／044

Abstract:Due to differences in natural endowments and economic structure, the impact of low oil prices on Middle East oil-exporting countries and oil-importing countries are not the same. Low oil prices improve the current account balance and fiscal situation of oil importing countries while deteriorate the current account balance and fiscal situation of the oil-exporting countries. Low oil prices increased banking exposure risks, but the banking system still remains resilient. Low oil prices weaken the stock market and other capital market but these markets still remain optimistic. Low oil prices led to the fall of FDI, sovereign wealth funds and project finance market, but market potential is still high. All in all, in the near term, the impact of low oil price on Middle East financial and investment market are controllable. However, if the oil price goes down for longer time, it is not optimistic for Middle East financial and investment market.

Keywords:Low Oil Price；Investment；Finance；Bank；Sovereign Wealth Funds；FDI

5　The Impact of Low Oil Price on the Economy and Nuclear Issue of Iran【Lu Jin】／068

Abstract:From February to November, 2014, Iran and the “5+1” countries held as many as 10 rounds of negotiations for reaching a final agreement on Iran’s nuclear issue. Though more common grounds were achieved by the parties concerned, a big gap remained on some focal issues, which twice caused the deadline of the negotiations to be extended. Both Iran and the U.S. are in need of a comprehensive agreement, the facts that threats from ISIS remain and oil price continues to plummet make both sides render great concessions, and all parties of the negotiation are jointly moving in the same direction. On April 2, 2015, a framework agreement was reached between Iran and the “5+1” countries in Lausanne, Switzerland, which won wide applause among the international society, meanwhile contradictory interpretations of some key concepts of the agreement by Iran and the U.S. caused disputes and doubts. Many obstacles remain before a final agreement can be signed prior to June 30, however, a peaceful resolution of Iran’s nuclear issue is the general trend and popular feeling.

Keywords: Iran Nuclear Talks;Low Oil Price;Lausanne Framework Agreement;Final Agreement

6　Lagged Effect of Global Economic Changes and the Middle-East Economy【Jiang Mingxin】／082

Abstract:In 2014 the world economy underwent many significant changes, such as the consolidation of global economic recovery, the differentiation of economic growth among the major economies, the US normalization of monetary policy as well as the slump of international oil prices, all these factors have made and will make great impacts on the Middle East economy. However, due to the lagged effects of the world economic changes, especially that of the oil price in the international futures market, the Middle East economies followed by and large their trend in 2013 during most of time in 2014, namely, most influenced by the slow decline of international oil price and rapid change of the regional security situation. On the one hand, the fiscal balances in most Middle East oil exporters were weakening while their economic growth remained steady, this underscored their financial dependence on oil and sensitivity of their economies to oil prices, on the other hand, the Middle East oil importers depend much less on oil than those oil-exporting countries do, so that their economic performance varied according to the difference of their major economic partners.

Keywords：International Oil Price；Security；Middle East；Economy

Ⅲ　Regional Situation

7　The Issues of “Islamic State” and its Regional Influences【Wei Liang】／108

Abstract: In recent years, the “Islamic State” has made big progresses and achievements in Iraq and Syria. All the successes can be attributed to its policies in different aspects and the whole regional chaos. At the same time, the growth of “Islamic State” also affects the Middle East policy of the United State and global fights against terrorism. Although military actions have made obvious scores, but the roots of its survival still remain, and ISIS can be easily contained but hard to be destroyed.

Keywords: ISIS；Developing Progress；Policies；Regional Influences

8　Interpretation of the Yemen Crisis in 2015【Wang Jinyan】／130

Abstract:Since September 2014, Houthi armed group in Yemen launched an armed uprising to expand the scope of control, which raised the domestic crisis after its regime change in 2012. During 2015, the crisis is deteriorating and expanding: Houthi militia fought for more rights and controls of the country, while the government retreated one step after another. Because of sectarian conflict, geopolitics and some other factors, Saudi-led coalition carried out air strikes on Houthi’s positions in Yemen. Now the crisis is still continuing, its future has not yet been clear. This crisis was caused by many reasons from both in and out of Yemen, and it will exert an all-round and deep influence on Yemen and the region.

Keywords: Yemen；Houthi Armed Group；Crisis

9　The Situation in Egypt: Fragile Stability【Wang Lincong】／143

Abstract: Since the constitution was promulgated and Abdel Fattah Al-Sisi was elected as president in 2014, Strongman leadership returns to grip Egypt, the political transition is slow, and the political situation is relatively stable; through broadening the sources of income and reducing expenditure, Egypt has gradually resumed growth in the economy; Egypt’s diplomacy is proactive to rebuild regional power status. However, on the other hand, Egypt faces an increasing threat of terrorism, the extremist thoughts keep spreading, and the public security condition is grim; the economic development lacks driving force, and the structural problems of Egypt’s economy remain unchanged. Therefore, although Egypt has embarked on the road of stabilization, it is still facing a long-term and complex challenge. The current stability of Egypt is still fragile, and a prospect for the future remains uncertain.

Keywords: Political Stability;Transitivity;Resumed Growth;Extremism;Fragility

10　Reflection on the Sources of Turmoil and Industrialization Path of Egypt【Tong Fei】／159

Abstract: The development of Egyptian industrialization is full of bumpy, different Presidents made different strategies of the industrialization. Because lacking of suitable strategy of industrialization, the outbreak of popular movement in Egypt overthrow the regime in 2011. Egypt should strengthen its’ Labor-intensive industries, to give full play to the advantages of demographic dividend and location advantage, and make Egypt become the world-factory in the future, and lay the foundation of the sustainable development of industrialization. At present, there are many new opportunities and challenges for the cooperation of China and Egypt.

Keywords: Egypt；Industrialization；China-Egypt Cooperation

11　Succession in Saudi Arabia and Outlook【Tang Zhichao】／171

Abstract: The throne Succession problem has been long plagued the Saudi royal family, and is also an important sensitive issues of national stability. As time went on, “old brother eventually end, young brother up” traditional inheritance pattern is facing increasingly severe challenges. After King Abdullah died, prince Salman ascended the throne smoothly. By now, transition to the throne looks smooth, king Salman’s status is stable. But Salman will face many challenges, including succession issue, a drop in oil prices, and the growing deteriorating regional security situation.

Keywords: Saudi Arabia; Throne Succession; Challenge

12　Governing Ideas of the New President of Turkey【Zhang Bo】／188

Abstract: Erdogan is one of the most influential statesmen of the Republic of Turkey. He served as the President of the AKP party and Turkish Prime Minister for a long time. Turkish politics has undergone a transition from liberal conservatism to authoritarianism.The AKP government has taken control of the military. The AKP party has promoted many amendments to the Turkish constitution. The reconciliation process of the Kurdish issue has made great progress. The AKP government gave an iron-handed response to the Taksim protests and the Gülen movement.In March 2014 The AKP party won the local election. In August 2014 Erdogan was elected president of Turkey. President Erdogan is making efforts to amend the constitution, empower the presidency and build a New Turkey.

Keywords: Erdogan; the AKP Party; New Turkish Model; New Turkey

13　Presidential Election and Policy Orientation of Afghanistan【Wang Feng】／201

Abstract: With the withdrawal of the US troops, the third presidential election has been held in Afghanistan in 2014. Political crisis has ever been resulted from large quantities of fraud cases, yet been relieved with the help of the US, and Ghani has finally been elected as the new president. The new government has facilitated its ties with the US and the NATO, repaired the bilateral relations with Pakistan and gained the needed aids from other neighboring countries. However, the struggle for political powers within the new government will persist and therefore might have negative impact on the stability of Afghanistan in the future.

Keywords: Afghanistan；Presidential Election；Withdrawal of the US Troops；Taliban

14　Tunisia’s Political Transition: Completion and Inspiration【Dai Xiaoqi】／214

Abstract: Many Arab countries have faced drastic changes, only Tunisia has achieved smooth transition. In 2014 Tunisia ended its transition and established a new political system after the landmark political process for 4 years, which includes 3 stages: the establishment of a new constitution, the parliamentary election, the presidential election. The paper explains why Tunisia gets rid of the turmoil first, introduces its political stages and potential changes, analyzes its new administration program and predict the opportunities and challenges.With the new government facing many problems in security, economy and society, it still has something to do in these fields. Under the leadership of the new government, Tunisia is expected to restore its economic competitiveness and achieve social stability.

Keywords: Tunisia; Political Process; Secularism

Ⅳ　Market Trends

15　FDI Trends in West Asia【Xu Qiang】／226

Abstract: Till 2014 the value of inwards-FDI flow of West Asia Region has been decreasing continuously for 6 years, whereas the M&A investment value in 2014 of several countries in the region increased vigorously after a sharp declining in 2013. The values of the stock and flow of China’s direct investments in West Asia all grew in high speeds in 2013. The varieties of China’s investment industries included energy, manufacturing, construction, communication, etc. International institutions gave negative accessions for the future prospecting of West Asia investment environment whereas only few economies there will improved marginally. Nevertheless, the growth status and future trends of China’s investment in West Asia will be rather hopeful. Through consolidating energy areas, exploring manufacturing area, urge with engineering project contracting mutually, carefully coping with risk and difficulties, the China’s FDI in West Asia will have a brighter future.

Keywords: Inwards-FDI-value; China’s Investment; Investment Environment; Future Prospecting

16　Construction Markets in West Asia【Jin Rui】／238

Abstract: 2014 West Asian governments invested heavily in large-scale infrastructure construction projects, and will be playing host to the World Expo in Dubai, Qatar world cup and other favorable factors drive, resist the low oil prices situation in some areas and the impact of the construction market turmoil, infrastructure construction has become an important part of Western Asia in international project contracting market. International engineering contracting enterprises in China firmly grasp the “along the way” the implementation of the strategy and infrastructure investment banking in Asia establishing favorable opportunity, the implementation of territorial management, to overcome the shortage of labor etc. difficulties, performance in the western region increased steadily. Looking to the future, the influence of West Asia building market economy and market adjustment is still large, the security and political factors influence to further improve, will further intensify competition, but infrastructure construction especially cross-border infrastructure construction will remain the West Asia region construction market is an important direction of development.

Keywords: West Asia; Construction Market

17　Foreign Trade Development in West Asia【Zhou Mi】／249

Abstract: Due to changes of different factors, the international trade of West Asian countries declined in whole. The gap among the countries is reducing. The trade structure is also adjusted with the low price of oil in the international market. Gulf Cooperation Council (GCC) and Organization of Petroleum Exporting Countries (OPEC) have guaranteed the harmonization of trade and economy and promote the trade in this region. The low price of oil promotes the development of non-oil trade and speed up the transformation of trade in this region. The bilateral trade between China and Western Asian countries keeps its track to develop with larger volume and less imbalance. Export from China is more diversified. With the promotion of the Belt and Road (B&R) strategy and resumption of China-GCC negotiation’s expectation, the bilateral trade between China and Western Asian Countries will move into a stage of better structure, more fields and innovation of cooperation modes under promotion and protection of better mechanism.

Keywords: West Asia; Foreign Trade; The Belt and Road

Ⅴ　Documentation

18　Developments of Middle East Studies (2014-2015)【Wang Jinyan,Tong Fei and Ma Wencheng】／265

Abstract: During the year 2014, the turbulence in the Middle East is going on, the future of the region is still vague, the hot issues have not been solved. Under these circumstances, the Middle East research communities all over the world have made a rapid-enhancement and yield plentiful results on politics, economics, culture, society and other respects. The characteristics of the studies in this year are as follow: Chinese scholars do their studies relevant to “One Belt and One Road Initiative” which was unveiled by Chinese president Xi Jinping in 2013; Western scholars pay attention to trace to the source of the turmoil in the region; most of the studies from the local scholars turn to geopolitics; while the scholars in the institute of West-Asian and African Studies raise more valuable suggestions based on its research, which highlights the role of a think-tank.

Keywords: Middle East Studies; Discipline Building; Progress Development

19　Chronology of the Middle East in 2014【Cheng Hong】／278