A free trade agreement (FTA) between the Gulf Cooperation Council (GCC) countries and China might become a reality next year, local Gulf News daily reported Thursday.

The GCC countries have begun FTA negotiations with China and the two parts expect this would be completed by the end of 2005, said the report.

The free trade agreement will help both the GCC and China unlock opportunities and expand the commercial relationship, it added.

There is a large untapped potential in energy cooperation that could benefit both the GCC and China, an unnamed UAE top official was quoted as saying.

The GCC groups Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates.

The FTA deal is expected to include tariff reductions, simplification of the flow of goods and facilitation of mutual investments between China and Gulf nations.

The UAE is one of China's most important trading partners in the Middle East. During the first ten months of this year, trade between the two countries crossed 6.4 billion dollars.

Dubai's Chinatown, which was opened Tuesday, is expected to contain more than 4,000 small and medium enterprises.