Saudi Arabia’s non-oil exports leaped by nearly 33 per cent in the first half of 2010 following a sharp rise in exports to China and other fast-growing Asian markets, the Gulf Kingdom’s largest bank has said.

The surge in exports to China more than offset the slackening supplies to Europe because of slow growth in the continent following Greece’s debt crisis, National Commercial Bank (NCB) said in a brief study sent to Emirates 24|7.

Plastics and petrochemicals remained the dominant component of the country’s non-hydrocarbon exports and the increase supports the goals defined in Saudi Arabia’s ninth development plan that has just been approved, it said.

“The increase is in line with goals set by the government in its Ninth Development Plan challenge with the aim of broadening and diversifying the economic base to decrease its dependence on oil,” NCB said.

“All throughout the first half of 2010 there was a noticeable increase in non-oil exports, up around 33 per cent to SR63.1 billion from the previous year.”

The report showed plastics led the way, accounting for nearly 30 per cent of the total non-oil exports this year, compared to 20 per cent last year. Petrochemicals however, maintained their share in exports this year to roughly 30 per cent.

“The Kingdom’s major trading partners for this year have not changed from last year. Non-oil exports to China jumped by about 58 per cent from last year, taking up almost 32 per cent of export share,” the study said.

“As for the European Union, exports maintained their low level of around five per cent in the first quarter, given the uncertainty over sovereign debt crisis and the continued uncertainty over global recovery…… but initial numbers indicate a slight pick-up in the second quarter from 2008.”

The upsurge in projects in the petrochemical sector, combined with a rise in emerging market demand for petrochemical products, particularly in Asia, also played a major role in export performance, according to NCB.

“Given that Asia’s economy is leading the global economic recovery, there are increasing expectations of rising demand in non-oil exports, particularly petrochemical products.”

Saudi Arabia, which controls over a fifth of the world’s recoverable oil deposits, approved the latest 2010-2014 development plan early this month, setting an ambitious non-oil sector growth target of around 6.6 per cent.

The plan involves investment of nearly SR1.44 trillion (Dh1.42 trillion) and also aims to raise the Arab country’s GDP per capita income.

In a study released after the approval of the plan, a key Saudi bank said the Kingdom would rely on the non-oil private sector to attain its targets.

“Saudi Arabia is counting on the private sector to grow by 6.6 per cent during the ninth development plan…achieving this target is difficult and constitutes a big challenge because the Kingdom’s economy has not recorded such growth rates since 2006, when it grew by 6.1 per cent,” Banque Saudi Fransi (BSF) said, adding the private sector grew by 5.1 per cent in the previous plan.

 “Although achieving the private sector growth target in the current development plan is not easy, setting this target is important because it could constitute a motivation for this sector to expand and improve its performance.”