Chinese President Xi Jinping arrived in Saudi Arabia on Wednesday on an official visit to forge closer ties with Riyadh and Arab states.
He will stay until Saturday to attend the inaugural China-Arab States Summit and to meet GCC leaders at the China-Gulf conference in the capital, Riyadh.
He said he was "happy" to visit the kingdom for the first time since 2016 and extended his "sincere greetings and best wishes" to the government and people.
"King Salman and I are leading bilateral relations to achieve great development and have strongly contributed to the promotion of peace, stability, prosperity and development in the region," he said, adding he was looking forward to the coming summits.
It is only his third overseas visit since the outbreak of Covid-19, which has heavily affected China's international trade due to strict entry requirements to the country. The measures are part of a wider policy known as zero Covid, which has involved sweeping, last-minute lockdowns that in some cases lasted weeks and even months.
But China's coronavirus rules were eased significantly on Wednesday, restoring some confidence to international investors.
Saudi jets spewing white and green smoke accompanied the Air China flight carrying Mr Xi as it approached Riyadh. Later, seven more jets conducted a fly-past in China's colours of red and yellow.
Mr Xi smiled gently as he waved from the door of the plane, then slowly descended the carpeted steps to meet the welcoming committee. Many of the dignitaries and staff at the airport wore masks as protection against Covid-19.
Mr Xi was met by Riyadh governor Prince Faisal bin Bandar Al Saud, Foreign Minister Prince Faisal bin Farhan Al Saud and the governor of sovereign wealth fund PIF, Yasir Al Rumayyan.
King Salman invited Mr Xi “in order to strengthen the historical relations and distinguished strategic partnership that unites the Kingdom of Saudi Arabia with the People's Republic of China”, the state-run Saudi Press Agency said before the visit.
Economic and development co-operation will be discussed, it added.
Chinese flags were hoisted along major roads in Riyadh, while Mr Xi was pictured on the front pages of newspapers that highlighted the trip's potential economic benefits.
Mr Xi’s attendance at the China-Arab States Summit marks the “largest and highest-level diplomatic event between China and the Arab world since the founding of the People’s Republic of China”, Foreign Ministry spokeswoman Mao Ning said on Wednesday.
The summit marks a turning point for bilateral relations with Saudi Arabia, the ministry said.
The two countries will sign deals worth more than $29.3 billion during the visit, said SPA.
A number of agreements are already in the works, including the signing of a memorandum of understanding between King Abdullah Petroleum Studies and Research Centre and China’s Economics and Technology Research Institute.
The think tanks will exchange information and conduct research together around energy, economics and climate change.
“We see a lot of common interest and alignment between China’s and Saudi Arabia's position when it comes to energy and climate. We both understand and reiterate the idea of common but differentiated responsibility when it comes to climate change,” Kapsarc’s president Fahad Alajlan said in a statement.
“As important energy producers and consumers in the world, China and Saudi Arabia play an important role in maintaining the stability of the international energy market, addressing climate change and promoting the realisation of energy green transformation goals,” added Etri's president Yu Guo.
China's ambassador to the kingdom has said the Riyadh summits, chaired by the leaders of the kingdom, China, the Gulf and Arab countries, will “enhance the interests of humanity”.
China's consul in Jeddah, Tan Banglin, said China's commitment to developing relations with Arab countries was based on five principles: Non-aggression, non-interference in internal affairs, mutual benefit, equality and peaceful coexistence.
"It is certain that the three summits will result in decisions that contribute to advancing and supporting joint Chinese-Arab co-operation in the fields of oil and natural gas [and] renewable energy," he said.
"China will also push for the implementation of the Global Security Initiative, through which it works with Arab countries to adhere to the concept of integrated and sustainable common security, and adhere to the principle of resolving disputes and conflicts between countries through peaceful means."
The US has commented on the visit, saying that Beijing is attempting to grow its influence around the world, describing the visit as "certainly not a surprise".
"We are mindful of the influence that China is trying to grow around the world," John Kirby, the National Security Council's co-ordinator for strategic communications, said in a statement. "The Middle East is certainly one of those regions where they want to deepen their level of influence,
"We believe that many of the things they're trying to pursue and the manner in which they are trying to pursue it are not conducive to preserving the rules based international order that the United States and our vast network of allies and partners are trying to preserve.
"We remain focused on our national security interests and our partnerships in the Middle East. That hasn't changed," he added. "Saudi Arabia is one of those strategic partners, it has been for 80 years and that partnership continues.
"We are not asking nations to choose between the United States and China."
THE BIO
Born: Mukalla, Yemen, 1979
Education: UAE University, Al Ain
Family: Married with two daughters: Asayel, 7, and Sara, 6
Favourite piece of music: Horse Dance by Naseer Shamma
Favourite book: Science and geology
Favourite place to travel to: Washington DC
Best advice you’ve ever been given: If you have a dream, you have to believe it, then you will see it.
Who's who in Yemen conflict
Houthis: Iran-backed rebels who occupy Sanaa and run unrecognised government
Yemeni government: Exiled government in Aden led by eight-member Presidential Leadership Council
Southern Transitional Council: Faction in Yemeni government that seeks autonomy for the south
Habrish 'rebels': Tribal-backed forces feuding with STC over control of oil in government territory
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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Countries recognising Palestine
France, UK, Canada, Australia, Portugal, Belgium, Malta, Luxembourg, San Marino and Andorra
The Sand Castle
Director: Matty Brown
Stars: Nadine Labaki, Ziad Bakri, Zain Al Rafeea, Riman Al Rafeea
Rating: 2.5/5
The five pillars of Islam
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