Daily Times

Xi Jinping will visit Riyadh for three summits: a China-Gulf (GCC) summit, a China-Arab summit, and a China-Saudi summit. These summits are critical to advance cooperation between China and the Gulf states. The China-Saudi summit is of particular importance because it seems to be heralding new opportunities for Saudi Arabia and China to strengthen their relationship.

According to Helima Croft, managing director of Global Strategy Research for Commodities at RBC Capital Markets in the United States, Saudi Arabia’s economic and strategic cooperation with China projects the country’s recent interest in exploring new avenues in addition to its recent interest in expanding its international reach by hosting the summit. The question arises whether this emerging cooperation portends the emergence of significant new alliances or a step forward in deepening the strategic and economic partnership between the two nations.

These summits signal the expanding partnership of China and the Gulf Arab states in trade, infrastructure, and security. The Gulf states, Saudi Arabia in particular, have become cognisant of the significance of being self-sufficient in technology, manufacturing, and the economic sectors. China offers services and solutions to assist Saudi Arabia in becoming self-reliant in exchange for reducing US clout over the oil-rich kingdom. Saudi Arabia’s long-term goals include shifting from comprehensive reliance on external technology, solutions, labour and limited indigenisation of technology to actively pursuing self-sufficiency in these areas – which China can readily facilitate through technology transfer and investment. On the other hand, China has massive energy demands that need to be met without the threat of enforced supply shortages or dizzying price fluctuations.

Saudi Arabia is interested in establishing a Chinese-centric digital infrastructure, where both countries are focusing on cooperation in technology with data centres and robust 5G networks.

China has grown into a significant economic player in the Middle East over time. China and Saudi Arabia, in particular, seem keen on deepening their relationship. China issued its Arab policy paper in early 2016, based on 1+2+3 Cooperation, which is collaboration on patterns of energy, economics, and technology. Later in 2019, Saudi Crown Prince Mohammed bin Salman visited China and expressed interest in integrating China’s Belt and Road Initiative (BRI) with Saudi Vision 2030 – a vision of a thriving economy and transforming Saudi Arabia into a self-reliant and modern kingdom. Both countries established a high-level joint committee to support their strategic partnership.

In the economic dimension, energy has been the foundation of developing China-Saudi Arabia relations. Out of $33.4 billion in Saudi exports to China, the top product is crude oil, worth $24.7 billion, making Saudi Arabia the largest exporter of oil to China. According to China’s General Administration of Customs, oil shipments from Saudi Arabia increased 12 per cent year-on-year (YoY) in October to 7.93 million tonnes or 1.87 million barrels per day (BPD). In addition, recently, Saudi Aramco, Saudi Arabia’s largest oil company, and Chinese oil giant, Sinopec, signed a memorandum of understanding MoU to focus on joint ventures for strategic cooperation. Both firms would focus on assessing petrochemical and refinery integration, procurement opportunities, and establishing a local manufacturing hub in King Salman Energy Park. This deal is a step in China’s ongoing strategic partnership with Saudi Arabia. The scale and scope of the MoU signify broader cooperation with China, which is likely to spill over into other sectors.

While energy has been the foundation of Saudi-Chinese relations, both are focusing on expanding the partnership. In the technology dimension, MBS has shown interest in collaborating with China on its Digital Silk Road initiative. Saudi Arabia is interested in establishing a Chinese-centric digital infrastructure where both countries are focusing on cooperation in technology and digital infrastructure with data centres and robust 5G networks. In 2019, Saudi Arabian tech giant Zain joined hands with the Chinese technology giant, Huawei. Key Chinese business organisations are collaborating with Saudi Arabian firms to establish advanced artificial intelligence-focused technology parks. At the end of 2021, Pan-Asia PET Resin (Guangzhou), among the largest polyethene terephthalate (PET) manufacturers in Guangdong province, secured a $3.2 billion petrochemical and chemical fibre project in Saudi Arabia. The investment and progress in technology are considered a step toward transforming Saudi Arabia into a digital economic hub. China and Saudi Arabia are working on increasing their technological and energy cooperation, with Saudi Aramco pledging 50 years of energy security.

Furthermore, according to a study published in February by the German Institute for International and Security Affairs, Chinese sales of weapons to Saudi Arabia leapt up 386% between 2016 and 2020. According to the Arms control association, Saudi Arabia had Chinese assistance in the local production of ballistic missiles, which it previously imported from China. China is also exporting its HQ-17AE air defence system to Saudi Arabia. An important element of the China-Saudi Arabia bilateral relationship is their renewed focus on nuclear energy, satellites, and technology.

The Saudi desire for transformation has created a window of opportunity for China to elevate its relationship up a few notches with Saudi Arabia. According to Ian Bremmer, President of the Political-Risk Company Eurasia Group, Chinese-Saudi cooperation goes beyond the recent US-Saudi friction because it is based on long-term economic and strategic rearrangements.

These summits are a milestone for the region, the China-Saudi Arab summit will be a significant step toward strengthening relations between China and Saudi Arabia. This summit also has the potential to benefit Saudi Arabia’s and China’s allies – particularly Pakistan – as there are opportunities for synergy in the implementation of Saudi-Vison 2030 and CPEC under the aegis of the BRI. The BRI has the potential to be a great point of convergence between the three countries and would be a concrete step forward in regional development and partnerships. This partnership could prove to be beneficial to Pakistan’s economy as Saudi Arabia is already one of the major destinations for Pakistani services exports thus making it a major remittance contributor. The new infrastructure projects and intended diversification efforts in the Saudi economy will also provide new employment and business opportunities for Pakistan to explore.

The writer is a Researcher at the Centre for Aerospace and Security Studies, Lahore. She can be reached at casslahore@gmail.com.