Saudi Arabia China Relations – Xi Jinping on Three-Day Visit to Gulf Nation

China’s President Xi Jinping is about to begin a three-day go to to the Kingdom of Saudi Arabia, the place he’ll attend summits with leaders of Gulf and Arab nations within the hope of deepening commerce and funding ties with the area. We take a look at Saudi Arabia-China relations over time to grasp the importance and potential affect of this high-profile state go to.

Chinese language President Xi Jinping arrived in Riyadh, Saudi Arabia on Wednesday, December 7, for a three-day journey to the Gulf kingdom. As a part of the state go to, President Xi will meet with King Salman bin Abdulaziz Al Saud and Crown Prince and Prime Minister Mohammed bin Salman. 

President Xi final visited Saudi Arabia on a state go to in 2016, throughout which era he held talks with King Salman and Crown Prince Minister Mohammed bin Salman. In the meantime, the Crown Prince final traveled to Beijing in January 2022 to attend the Winter Olympics. The final face-to-face assembly between the 2 leaders in an official capability was in 2019, when the Crown Prince traveled to Beijing to carry talks on issues associated to vitality cooperation, in addition to collaboration on China’s Belt and Highway Initiative (BRI). 

Xi Jinping additionally held a cellphone name with the Crown Prince in April 2022, during which they reiterated their dedication to constructing nearer bilateral ties. This contains “signing agreements to synergize Saudi Arabia’s Imaginative and prescient 2030 with the Belt and Highway cooperation” and “push for an early conclusion of the China-Gulf Cooperation Council (GCC) free commerce space settlement”, based on the readout of the assembly. 

Throughout his go to, which can final till December 10, President Xi will attend the primary China-Arab States Summit and the China-GCC Summit in Riyadh. 

The China-Arab States Summit – the primary such summit to be held – relies on the China-Arab States Cooperation Discussion board (CASCF), a summit first held between China and the Arab League in 2004.  Numerous leaders from the Arab world are anticipated to attend the summit, together with Egyptian President Abdel Fattah El-Sissi, Kuwaiti International Minister Salem Abdullah Al-Jaber Al-Sabah, and Bahraini International Minister Abdullatif bin Rashid Al Zayani. 

The China-GCC Summit will see the gathering of leaders from the GCC, which is comprised of six gulf nations: Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates (UAE). The GCC’s fundamental headquarters are in Riyadh. 

The outcomes of President Xi’s go to to Saudi Arabia stay to be seen, however the two summits, in addition to numerous bilateral diplomatic talks, are anticipated to generate bilateral funding and vitality agreements with Saudi Arabia and different Arab nations, in addition to potential progress on the China-GCC free commerce settlement (FTA) negotiations. 

Saudi imaginative and prescient 2030 

Saudi Imaginative and prescient 2030 (Imaginative and prescient) is a strategic framework geared toward lowering Saudi Arabia’s reliance on oil, diversifying its economic system, and increasing public service areas comparable to well being, training, infrastructure, recreation, and tourism. One of many Imaginative and prescient’s fundamental targets contains selling a softer and extra secular picture of the Kingdom, along with bolstering financial and funding exercise. The plan additionally entails producing weapons and boosting authorities spending on the army sector. 

The Imaginative and prescient was first introduced by Crown Prince Mohammed bin Salman in April 2016. Since then, the Council of Financial and Growth Affairs (CEDA) has been in command of and protecting monitor of funding allocations and different parts obligatory to place the plan in movement. 

The three rules underpinning the Imaginative and prescient need Saudi Arabia to develop into the “coronary heart of the Arab and Islamic worlds,” a worldwide funding powerhouse, and a hub linking Afro-Eurasia. 

The Imaginative and prescient revolves round three key matters that define a number of objectives to be completed by 2030: 

• A vibrant society: Making a energetic group by funding in urbanism, tradition and leisure, sports activities, Umrah, and UNESCO World Heritage Websites. 
• A thriving economic system: Boosting excessive employment ranges, international competitiveness, and non-oil exports. Attracting international direct funding (FDI). Facilitate the doorway of girls within the workforce. 
• An bold nation: Constructing a rustic with excessive ambitions by the growth of areas comparable to non-oil income, authorities effectivity, digital authorities, household revenue and financial savings, non-profits, and volunteerism. 

Beneath we take a look at a couple of key tasks shaping the Kingdom’s future improvement trajectory. 

NEOM 

The Saudi Crown Prince Mohammed bin Salman’s introduction of the NEOM initiative in October 2017 highlighted the increasing tendencies of Saudi Arabia’s economic system’s modernization and restructuring within the post-oil age. The mission is an indication of the Kingdom’s steadfast technique to undertake large improvement initiatives that make good use of the Saudi location’s benefits and prospects for collaboration with neighboring nations to transform in direction of a various, trendy, and extra open economic system. 

NEOM is a US$500 billion-worth high-tech metropolis and is commonly thought-about the centerpiece of Saudi Arabia’s post-oil diversification technique. The town, which might cowl a complete space of 26,500 sq. kilometers, is located in northwest Saudi Arabia and can lengthen to the Egyptian and Jordanian borders. Its land protection is anticipated to be greater than 35 occasions the scale of Singapore. Specifically, NEOM will show zones dedicated to rising improvements in 16 industries, together with biotechnology and meals manufacturing. 

The world will probably be composed by inexperienced areas with orchards, vegetable gardens, and flowerbeds, in addition to a wide range of sporting amenities, together with fields for cricket and soccer, gyms, tennis and basketball courts, and extra. 

By 2030, it’s anticipated that the mission could have contributed a minimum of US$100 billion to the Kingdom’s GDP. The mission is anticipated to be accomplished by 2025. 

The Crimson Sea Mission 

The Crimson Sea Mission is a large land and property mission underneath the Saudi Imaginative and prescient 2030 plan, developed in Saudi Arabia and managed by Crimson Sea International. The initiative, which goals to attract vacationers to the Crimson Beach by concentrating on luxurious and ecotourism, was unveiled by the Saudi Crown Prince Mohammad bin Salman in July 2017.   

As soon as accomplished, the mission will cowl 28,000 sq. kilometers of islands, seashores, desert, mountains, and volcanic areas, growing Saudi Arabia’s GDP by US$5.86 billion yearly, as it’s anticipated to draw a million folks every year. 

In line with the builders, the Crimson Sea Mission will rank among the many high sustainable tourism locations on this planet, with a coverage of zero trash to landfills, full carbon neutrality, and a prohibition on single-use plastics.  

Beneath the Imaginative and prescient, the mission will probably be absolutely accomplished by 2030. 

The Center East Inexperienced Initiative 

The Center East Inexperienced Initiative represents Saudi Arabia’s assist for international environmental initiatives. With the purpose of reaching a serious worldwide discount in carbon emissions and implementing the biggest reforestation initiative in historical past, the mission strengthens Saudi Arabia’s cooperation and data switch with regional and worldwide companions.  

The Crown Prince first convened the inaugural Center East Inexperienced Initiative Summit on October 25, 2021, in Riyadh. The occasion enabled a pioneering regional dialog on local weather change, throughout which numerous leaders agreed to push ahead their collaborative efforts in environmental and local weather change initiatives. 

The mission encompasses two fundamental targets: 

• Decreasing carbon emissions by greater than 10 p.c of the present international ranges – specifically, lowering emissions from hydrocarbon manufacturing within the area by a minimum of 60 p.c; and 
• Planting 50 billion timber throughout the Center East area, of which 10 billion will probably be situated in Saudi Arabia alone, accounting for five p.c of the worldwide afforestation purpose. 

The Kingdom has additionally established a Inexperienced Initiative Basis, a non-governmental group (NGO) with the give attention to guaranteeing the implementation of the Inexperienced Initiative. 

Saudi engagement with the BRI 

Saudi Imaginative and prescient 2030 and China’s BRI naturally complement each other. The strategic goal of the BRI is to boost logistical and infrastructure connections whereas selling commerce and funding. However, the Saudi Imaginative and prescient 2030 intends to create a various economic system unbiased from oil commerce. 

In 2022, Saudi Arabia has been the largest recipient of Chinese language investments within the BRI, averaging US$5.5 billion price of offers, which demonstrates Beijing’s dedication and long-term ambitions within the Center East – particularly following a detour from funding in different nations primarily based on geopolitical concerns. 

The strengthening of Sino-Saudi ties has been sparked by this convergence of financial agendas. To be able to additional the BRI and industrial capability cooperation, the 2 nations signed a Memorandum of Understanding (MoU) throughout President Xi Jinping’s go to to Riyadh in January 2016, elevating the bilateral relationship to a complete strategic partnership – from which Saudi’s engagement within the BRI benefited vastly. 

China’s international direct funding (FDI) in Saudi Arabia has proven a sample of sustained development over time following the announcement of the BRI. Though the circulate of Chinese language FDI to Saudi Arabia barely decreased between 2016 and 2017 (as a result of Saudi’s financial reforms and regulatory modifications influencing China’s outbound investments), investments scored a brand new excessive in 2019, reaching US$654 million.  

The growth of collaboration between Chinese language and Saudi companies is mirrored within the enhance in funding and commerce linkages. This collaboration encompasses not simply standard infrastructure and utility constructing but in addition rising financial areas like digital innovation and new vitality improvement. Chinese language companies have progressively elevated their presence within the Saudi petrochemicals business – this growth, nevertheless, has been relatively gradual compared to the exercise of Saudi companies in China. 

One of many largest offers between China and Saudi Arabia on the BRI is that signed between Saudi Arabian Oil Firm (Saudi Aramco) and China Petroleum & Chemical Company (Sinopec). In line with the MoU, the businesses will collectively assess refining and petrochemical integration alternatives; engineering, procurement, and development; oilfield companies, upstream and downstream applied sciences, and within the areas of carbon seize and hydrogen processes. 

Different areas of cooperation and BRI engagement embrace (however aren’t restricted to): 

• Enabling vitality transition; 
• Integrating hydrogen provide chains; and  
• Constructing native capability in renewable vitality investments. 

China-Saudi Arabia bilateral commerce  

China is Saudi Arabia’s largest commerce associate. Bilateral commerce reached a complete of US$87.31 billion, in accordance the China’s Nationwide Bureau of Statistics (NBS). This was a year-on-year development charge of 30.1 p.c. Of this, Chinese language exports to Saudi Arabia reached US$30.32 billion, up 7.9 p.c year-on-year, whereas Chinese language imports from Saudi Arabia reached US$56.99 billion, up 46 p.c year-on-year. 

The majority of imports from Saudi Arabia was crude oil and petrochemical merchandise. Saudi Arabia stays China’s largest provider of crude oil, and in 2021, China imported 87.57 million tons of crude oil from the dominion, a year-on-year enhance of three.1 p.c. The whole worth of Saudi exports of mineral fuels, oils, and merchandise thereof reached US$44.87 billion in 2021, based on ITC Commerce Map. 

In the meantime, the primary Chinese language exports to Saudi Arabia have been equipment and electrical elements, metal merchandise, and clothes and textiles. In 2021, China exported a complete of US$7.79 billion price {of electrical} equipment and gear to Saudi Arabia. 

Non-oil commerce between the 2 nations has been rising as Saudi Arabia’s total proportion of non-oil commerce continues to extend. In line with knowledge from the Saudi Basic Authority for Statistics, the nation’s non-oil exports grew 27.5 p.c from the identical month in 2021 to achieve SAR 24.1 billion (US$6.4 billion). Saudi Arabia’s fundamental non-oil commodity is plastic and rubber articles, and in 2021, China imported US$4.8 billion price of this commodity. 

China-GCC negotiations 

China has been actively engaged in deepening relations with the six member nations of the GCC. The connection has, for essentially the most half, been primarily based on the commerce of vitality sources, with the area being considered one of China’s fundamental sources of crude oil and liquified pure gasoline (LNG) imports. The economies of Oman, Kuwait, and Saudi Arabia are extremely reliant on oil exports to China. On the similar time, China stays reliant on the Gulf nations for its vitality safety – Saudi Arabia alone accounted for 17.4 p.c of its crude oil imports in 2021.

Nevertheless, non-oil commerce between China and the GCC states can be more and more vital, and as Gulf nations search to diversify their economies, that is set to develop. Industries comparable to high-end expertise, telecommunications, renewable vitality, and tourism, seeing vital potential. 

In opposition to this backdrop, each China and the Arab Gulf nations will probably be eager to come back away from the summits and conferences with some inked agreements and offers. 

Over the previous twenty years, China and the GCC have held a number of rounds of negotiations on a possible FTA. Nevertheless, talks have stalled on quite a few events since they started in 2004. Beforehand, negotiations have been dropped as a result of disagreements over oil tariffs, responses to the Syrian civil conflict, in addition to diplomatic crises inside the gulf area. 

Latest efforts have been made to revive talks, with China internet hosting a delegation of international ministers from GCC nations in Wuxi as not too long ago as January 2022. In line with experiences from the discussions, the diplomats agreed to conclude discussions on the FTA as quickly as potential. 

It’s at present unclear whether or not the ultimate particulars of the FTA could be hashed out throughout the China-GCC Summit, however it’s nonetheless more likely to be an vital subject of dialogue all through Xi’s go to. The conclusion of comparable to settlement would offer a fantastic enhance to bilateral commerce and funding, and should assist to safe deeper bilateral relations for years to come back.