Relations between Saudi Arabia and China rise to high levels of cooperation as reflected in the declared positions and the volume of agreements and deals recently concluded during the Arab-Chinese conference in Riyadh.
The announcement by Saudi Investment Minister Khalid Al-Falih during the opening of the tenth edition of the Arab-Chinese Business Conference about the Kingdom’s intention to launch a “modern and new Silk Road” between China and the Arabs reflects Saudi Arabia’s keenness to strengthen economic and trade ties with Beijing.
Falih told CNBC that the kingdom considers China a key partner in a multipolar world.
“We would like to believe, and I think it has been proven, that the Kingdom is an important part of this multipolar world that has emerged. We will do our part, not only in developing our economy but also in developing our region, spreading what we have in terms of development opportunities, also in Africa, Central Asia, and the Indian subcontinent. We believe that economic cooperation between China, Saudi Arabia, the GCC, and the entire Arab region will be an important part of that.”
Falih sees opportunities for Chinese and Saudi companies to invest internationally in third countries in ways that will bring development to other developing countries.
Saudi Energy Minister Prince Abdulaziz bin Salman said the kingdom was seeking cooperation with China rather than its rival, saying he was not heeding Western criticism of growing Sino-Saudi ties.
Prince Abdulaziz said oil demand in China, the world’s biggest energy consumer, was growing, so Saudi Arabia wanted to tap into some of that demand. He called for cooperation with China rather than competition with it.
The first day of the Arab-Chinese conference, which was held shortly after a visit by US Secretary of State Antony Blinken to Riyadh, saw the conclusion of 23 deals worth a total of more than $10 billion in many fields between the public and private sectors of Arab countries and China.
The Saudi Ministry of Investment also signed a $5.6 billion (21 billion riyals) agreement with Human Horizons, a Chinese company specializing in the development of autonomous driving technologies and the manufacture of electric vehicles.
Read: China’s Silk Road initiative pushing its way through the Gulf
The deal represents more than half of the volume of investment agreements signed on the first day of the conference.
During the China-Saudi summit held in Riyadh in December 2022, the Kingdom signed investment agreements with China worth $50 billion, coinciding with the visit of Chinese President Xi Jinping to Saudi Arabia, to attend the first China-Arab summit.
Beyond silk roads: Saudi and China have strong economic ties
China and Saudi Arabia have enjoyed strong economic ties for decades, driven by China’s high demand for oil. Trade between the two countries was worth more than $106 billion in 2022, up 30 percent from the previous year, according to Saudi government figures.
In contrast, China’s foreign direct investment in the Arab world markets amounted to $23 billion in 2021, of which $3.5 billion was in Saudi Arabia.
China also imports half of its oil from the Middle East and is the biggest oil customer for both Saudi Arabia and Iran. As Saudi Arabia tries to diversify its economy from energy production through Vision 2030, Chinese companies are preparing to benefit from the award of massive infrastructure contracts.
A Chinese company has already built a light rail system in the city of Mecca, which helps hundreds of thousands of pilgrims get around the holy city. The 18-kilometer line with nine stations was the first to be built by a Chinese company in the Middle East.
Among other deals underway, a Chinese construction company has won the contract to build a 28-kilometer high-speed rail tunnel to NEOM, the kingdom’s under-construction smart city on the Red Sea.
Many Middle Eastern countries have also been involved in infrastructure projects linked to China’s massive Belt and Road Initiative, which aims to boost trade between Asia and the rest of the world.
Saudi and the “BRICS”
Saudi Arabia is in talks to join the BRICS Group’s New Development Bank, a prelude to joining the group that includes Brazil, Russia, India, China, and South Africa.
The Saudi foreign minister, who participated in the ministerial meeting of the Friends of the BRICS group earlier this month, stressed that the Kingdom is keen to develop future cooperation with the BRICS by taking advantage of the capabilities and capabilities possessed by the Kingdom and the BRICS countries in order to meet common interests and achieve prosperity for all.
He said: “The Kingdom remains the largest trading partner of the BRICS Group in the Middle East, and trade relations with the BRICS countries have witnessed significant growth that reflects the growing and developing relations with the BRICS countries, as the total bilateral trade with the countries of the group increased from $81 billion in 2017 to $128 billion in 2021, and exceeded $160 billion in 2022.”
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