1.3 Literature Review. 10

1.4 Study Problem Statement and aims 11

2 Theories and research PHIL osophy 12

2.1 Theoretical Background 12

2.1.1 Views on economic impact. 12

2.1.2 China and Yemen Trade Background 16

2.2 Research Philosophy 17

2.3 Study Area Background 18

2.3.1 Economy 20

2.3.2 Imports 20

2.3.3 Exports 21

2.3.4 Trade Balance 21

3 Research findings 22

3.1 Foreign Investment 22

3.2 Currency and Exchange Rate 22

3.3 Background of Yemen and China trade 22

3.4 Products exported from China to Yemen since 2009 to 2014 23

3.5 Products exported from Yemen to China since 2009 to 2014 26

3.6 Trade balance between Yemen and China 27

3.7 Yemen and China Trade Relationship Explanation 28

3.8 Trade balance between Yemen and China and favored products 29

3.9 Middle East and China trade ties 29

3.10 Conclusion 30

3.11 Recommendations 32

Acknowledgement 33

References 34

1 Background and literature reciew

1.1 Introduction

The trade balance studies between two or more countries encourage the specialists and interests to more understand the virtual situation of economic and political relationships of those investigated countries. Besides that, knowledge of the most preferred products between studied countries lighting the importance of friendship relation of those studied countries which facilitate the way to preserve and ameliorate that economic and friendship relations. According that, the trade balance and most preferred products between Yemen and China needs to be focused and evaluated academically because most of interests in this field were just short and rare reports, but the detailed data still needs more attention to be collected and analyzed. Recently, Yemen was considered as the 97th largest export economy in the world. The exports and imports during 2014 were counted $8.12B and $13.7B respectively [1]. The most exported products in 2014 of Yemen were Petroleum Gas $3.92B, Crude Petroleum