China and Saudi Arabia to sign deals worth $29.3bn at summit

Chinese President Xi Jinping will also attend a China-Arab summit and a Beijing-GCC conference in Riyadh

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Saudi Arabia and China plan to sign deals worth more than $29.3bn when President Xi Jinping arrives for a two-day visit on Wednesday to bolster Beijing's relations with the kingdom, state media agency SPA reported.

In his first visit to the kingdom in six years, Mr Xi will meet King Salman and Crown Prince Mohammed bin Salman. He will also attend a China-Arab summit and a China-Gulf conference in the capital Riyadh that other regional leaders will fly in to join.

The meetings mirror a visit to Saudi Arabia earlier this year by US resident Joe Biden who met with regional allies in Saudi Arabia in a bid to reassure partners of America's commitment to the Middle East in terms of security, the economy and investment.

The Saudi state news agency on Tuesday said that King Salman had 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 China-Arab summit and the China-Gulf summit, the statement from the royal court said, will “enhance joint relations in all fields and prospects for economic and development co-operation will be discussed.”

Saudi Minister of State for Foreign Affairs Adel Al Jubeir has said trade and regional security will be the top priorities during Mr Xi's visit — only the Chinese leader's third international visit since the start of the pandemic.

Mr Xi's visit comes at a time when relations between Saudi Arabia, the biggest oil exporter, and the US have deteriorated over crude oil prices and US concerns about the increasing co-operation between Gulf countries and China, the top oil-importing economy.

Saudi Arabia has sought to play down the significance of the visit.

Mr Al Jubeir said that the meeting between the leaders is only “natural”, as China is Saudi Arabia's largest trading partner, and these visits are not “uncommon”.

“The same with our other trading partners and strategic partners, whether it is the US, the UK, France, Germany, this is what countries do,” he said.

He added that the kingdom has huge investments in China and “the Chinese have huge investments in Saudi Arabia”.

In September alone, China's exports to Saudi Arabia reached $3.43 billion, while imports were $6.81 billion in total.

Crude oil was Saudi Arabia's main export to China, which shipped the most cars to the kingdom last year.

In 2020, China became the GCC’s top trading partner, and Saudi imports from China rose by 18 per cent in 2020 to $28.1 billion, according to Chinese customs data.

In October, the kingdom's investment minister told the Future Investment Initiative in Riyadh that Saudi Arabia and the US would settle their “unwarranted” disagreement over oil supplies.

While Saudi ministers have avoided any remarks about the US-China relationship, analysts believe that the meeting will be a signal to Washington.

“Both sides will play up the geopolitics,” Rafaello Pantucci, senior fellow at Singapore’s S Rajaratnam School of International Studies, told The National.

“Both like the idea of demonstrating they have options other than the West.

“China can say, 'so what, America, you are trying to freeze us out [but] we still have great powers that will engage with us.' And Saudi Arabia can say 'we have options, we are not dependent on you.'

“In reality, for both, there’s great dependence.”

Sana Hashmi, a postdoctoral fellow at the Taiwan-Asia Exchange Foundation, told The National that Mr Xi's decision to put Saudi Arabia near the front of destinations to visit now that he is travelling again after the pandemic was also important.

“As Xi has resumed foreign visits, his choice of countries is strategic and safe,” she said.

“Saudi Arabia is safe because there are fewer chances of diplomatic faux pas and strategic because amid Saudi’s somewhat fraught relationship with the US, Xi’s visit could be a way to establish an anti-West-grouping in this part of the region.

“The China-Arab summit could be a platform to showcase that China isn’t alone, the Belt and Road Initiative has takers, and that not every country is endorsing the US view of the Indo-Pacific.”

The Belt and Road Initiative is China's flagship infrastructure investment programme that aims to connect the globe through transport and production hubs.

Oil prices

Opec+ announced it would cut its November output by two million barrels per day, its most significant reduction since the start of the pandemic in 2020.

The cut led to a jump in oil prices.

US President Joe Biden vowed to “take action” against Saudi Arabia after the Opec+ announcement.

With a meeting between the biggest player in the oil market and one of the biggest buyers, this will be a major part of the conversation says Mr Pantucci.

“The message coming out of China is it is betting heavily on hydrocarbons, that it doesn’t plan to wean itself off in the medium or even the long term,” he said. “And this is a region that is very rich in them, so there’s clearly an appetite to make sure you’ve got good first dibs on these.”

In July, Mr Biden attended the GCC+3 summit of Arab leaders in Jeddah where he said, “the US will not walk away from the Middle East … and leave a vacuum to be filled by China, Russia, or Iran … the US is not going anywhere”.

While the US is the region's top supplier of military hardware and protection, that has not deterred Saudi Arabia and other Gulf nations from developing ties with Beijing in trade, technology and hardware from ballistic missile technology to armed drones.

Updated: December 07, 2022, 6:36 AM
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