Xi's Visit to KSA and a New Alignment

On 7 December 2022, President Xi Jinping landed in Riyadh, the capital of the Kingdom of Saudi Arabia, for a landmark visit to the Arab state, with bilateral cooperation and investment as his top priorities. Saudi Arabia also hosted the first-ever China-Arab and China-GCC (Gulf Cooperation Council) summits on the last day of President Xi’s three-day visit. The visit had substantial fanfare in the Kingdom, while the US warned that China’s attempts to expand its sphere of influence were “not conducive” to the international order. China is heavily dependent on foreign oil and gas imports. In 2021 it imported 72 per cent of its total oil and 44 per cent of its total gas demand, mainly from Gulf states. In the same year, a total of 43.9 billion USD worth of crude oil was imported by China from Saudi Arabia, which amounts to 77 per cent of trade between the two states in that year. This level of trade underlines the importance of both countries for each other.

During the visit, many deals were signed between China and Saudi Arabia. One of the most important of these was the approval of an alignment plan between the Kingdom’s Vision 2030 and China’s Belt and Road Initiative. Numerous other deals and memorandums of understanding (MoU) were signed between the two governments pertaining to various fields, such as the MoUs signed regarding the field of hydrogen energy and another to encourage direct investment between China and Saudi Arabia. The Kingdom’s government also signed a deal with Huawei; the company will bring its cloud services to the Kingdom and undertake the construction of high-tech complexes. This is another instance of the Chinese tech giant undertaking agreements with Gulf states aligned with the US. While the US was objecting to the deals citing security risks, Huawei is already working to bring 5G networks to most of the Gulf states.

During the visit, many deals were signed between China and Saudi Arabia. One of the most important of these was the approval of an alignment plan between the Kingdom’s Vision 2030 and China’s Belt and Road Initiative.

The deals and MoUs signed on this trip are said to be worth around 30 billion USD and are building upon previous investments undertaken by China and Saudi Arabia in each other’s economies. Earlier this year, Saudi Arabia made one of its largest investments in China, a petrochemical plant worth 10 billion USD in the country’s northeast, thus showing that the investments are being undertaken by both states. An understanding or agreement of non-interference in each other’s internal or domestic policies is important to Saudi Arabia as they have in the past had such problems with the West. Their war in Yemen and the recent policy of oil pricing are just some examples. China has also faced criticism from the West, mainly for their treatment of Uyghurs and other ethnic groups in China’s western Xinjiang region.

President Xi said at the first China-GCC summit that the GCC states and China were natural partners for cooperation. He also urged the GCC states to use the Shanghai Petroleum and Natural Gas Exchange for payments of delivered oil and gas to China in yuan rather than dollars while stating that China will continue to purchase large quantities of oil from GCC states in the long term and increase the share of LNG purchase as well. He also stated that cooperation would be increased in oil and gas development, storage, transport and refinement processes. President Xi also mentioned that China would also cooperate in the fields of nuclear energy, nuclear security and space exploration with the GCC states. Moreover, five areas for cooperation were established, energy, finance and investment, new tech and aerospace, and lastly, understanding and learning each other’s languages and culture. The GCC states reaffirmed their support for the One China Policy, while China reaffirmed its support for the two-state solution to the Palestine issue.

The China-Arab summit was attended by no fewer than 14 Arab leaders and monarchs and the head of the Arab League. The Crown Prince of Saudi Arabia, Mohammad bin Salman, said that the kingdom was working to enhance cooperation with China to “serve international stability”. He also appreciated President Xi for his stance on the Palestine issue. President Xi stated at the summit that China will help the Arab countries and will support them with development, food security, health, energy, and the environment. He also said that Islamophobia and extremism should be confronted all over the world. President Xi highlighted that the trade between the Arab states and China had crossed 300 billion USD in the last ten years and would only increase in the coming years. The President offered the Arab states 5 billion yuan (718 million USD) worth of developmental aid, sending 500 agricultural experts to help with the previously mentioned food security problem. Military and security exchanges will also be increased with the Arab states, and he offered to train police and cybersecurity experts.

Although there were no defence deals undertaken on this visit, which could be due to prying eyes from the US, the Kingdom has been purchasing defence equipment from China. Just this November, there were reports of sales worth 4 billion USD to Saudi Arabia during China’s Zhuhai Air Show, the biggest arms show in China. The deal reportedly included TB-001 Medium Altitude Long Endurance drones, YJ-21 anti-ship ballistic missiles and anti-drone laser systems. Saudi Arabia has previously bought weapons from China, including other types of drones and ballistic missiles, and artillery pieces.

With China looking to expand its influence in the Middle East and, at the same time, Saudi Arabia looking to reduce their reliance on the West and particularly the US, the space for cooperation between China and the Kingdom will only increase in the coming years.

Syed Zulfiqar Ali

Syed Zulfiqar Ali has completed his Masters in Defence & Strategic Studies from Quaid-i-Azam University, and is currently serving as a Research Assistant at the Centre of Strategic and Contemporary Research.

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