Saudi Arabia's Public Investment Fund has signed partnerships worth up to $50 billion with six major Chinese financial institutions, aimed at strengthening its global co-operation strategy.
The initial agreements were signed with Agricultural Bank of China, Bank of China, China Construction Bank, China Export and Credit Insurance Corporation, Export-Import Bank of China, and Industrial and Commercial Bank of China, the PIF said on Thursday.
The deals cover areas including two-way capital flows through both debt and equity, and allows Saudi Arabia to tap into China's banking sector, whose assets grew at nearly 10 per cent in 2023, reaching 417.3 trillion yuan ($57.6 trillion), according to BBVA Research.
The agreements “demonstrate the PIF’s strong and deepening relationships with leading financial institutions and accentuate PIF’s commitment to enhancing partnerships globally”, Fahad Al Saif, the PIF's head of global capital finance, said.
Saudi Arabia has been embarking on a major economic transformation under its Vision 2030 programme, which seeks to diversify its economy away from dependence on oil.
The PIF, along with its related entities, is one of the main driving forces, pouring investments into key areas including finance, health care, sports, renewables, technology, automotive, real estate, aerospace, defence, entertainment, leisure, retail and mining.
This push is being extended overseas, as the Arab world's largest economy seeks to grow and diversify its investments in key regions through the PIF.
The PIF's moves are aimed at “driving transformation at a scale never seen before, sparking a new era of economic growth and opportunity”, according to its website.
By far, the PIF has about $925 billion of assets under management and formed 95 portfolio companies that has resulted in the creation of about 763,000 direct and indirect jobs, it said.
Relations between Saudi Arabia and China, meanwhile, have continued to expand, maintaining the long trade ties between the Arab world and the world's second-largest economy that has dated back 1,500 years.
Today, China is Saudi Arabia’s largest trading partner: latest available data shows that trade between the two countries hit $87.3 billion in 2021, growing to $95.46 billion between January and October 2022.
Energy is one of the key industries linking the two countries, as China is Saudi Arabia's largest importer of oil from the kingdom, buying about 1.75 million barrels of oil per day in 2022.
They are also continuing to strengthen investments in the sector. In April, Saudi Aramco, the world’s largest oil-producing company, said it was exploring the formation of a joint venture in the Saudi Aramco Jubail Refinery Company with China's Rongsheng Petrochemical as it seeks to attract new investment to the downstream sector.
Chinese exports to Saudi Arabia jumped more than 13 per cent annually to nearly $43 billion in 2023, according to UN's Comtrade database.
