Saudi Arabia - China strategic partnership promises no good for US interests in Gulf
    Riyadh's quest for new global powerhouse

    ANALYTICS  08 December 2022 - 14:08

    Fuad Shahbazov

    On December 7, 2022, Chinese President Xi Jinping arrived in Saudi Arabia for a three-day visit to discuss economic and development cooperation prospects with the kingdom and other Arab states, including trade and investment in various industries. While Xi’s visit to the kingdom occurred after seven years of pause, the local media reported that the two leaders discussed an ambitious agreements package worth nearly $30 billion. Reportedly, the contract will be signed during a Saudi-Chinese summit this week.

    The Chinese leader praised Sino-Saudi ties consolidated with a strategic partnership pact signed in 2016 based on "continued mutual trust." In a bid to diversify the economy and boost overseas partnerships, Saudi Arabia enhances partnerships with China. The close partnership with Beijing could enable Riyadh to develop its artificial intelligence (AI) sector and invest in green technology, given China’s enormous field-related expertise. As for Beijing, a close partnership with Saudi Arabia paves the way for deeper engagement with its flagship Belt and Road Initiative (BRI) project. Riyadh has already officially joined the BRI project and invested heavily in several infrastructure projects.

    Moreover, China sees Saudi Arabia as a critical and reliable energy supply hub, as the kingdom is already the biggest crude oil supplier of China, making up 18% of total crude oil purchases of the Asian giant, with imports totalling 73.54 million tons (1.77 million barrels a day) in the first ten months of 2022, worth $55.5 billion. The energy partnership grew sharply when Saudi-owned Aramco and Chinese oil giant Sinopec signed a memorandum in August 2022 to facilitate energy cooperation. As a part of the deal, in 2024, Aramco will inaugurate a $10 billion petrochemical complex in northeast China, which combines a 300,000-BPD refinery and 1.5 million tons per year ethylene plant marking its single largest investment in China.

    Although Saudi Arabia has been a key US ally and partner in the Gulf region for many years, its pivot towards Russia and China stirs anger and debates in the West. However, it did not stop Riyadh from boosting trade turnover with Beijing. According to public data, Saudi exports to China in 2021 consisted mainly of petrochemicals and plastics, while Saudi imports from China were largely electrical equipment, machinery, and vehicles, according to Trading Economics.

    Xi Jinping’s visit came at a time when the kingdom’s authorities seek to fill a global powerhouse gap in the region following the declining influence of the US after nearly 90 years of dominance. Even President Joe Biden’s visit to Riyadh in July to exert more pressure on the kingdom to distance itself from Russia and China did not yield positive results. On the contrary, the US has gradually lost its position as the leading trade partner of the kingdom, while China, along with India and Japan, has surpassed the United States, with which trade was only $29 billion last year.

    Riyadh’s inclination toward China and Russia may be sought in its desire to move away from Washington’s all-out influence and seek powerful alternative partners to diversify its economy and end one-country reliance. Saudi Arabia is joined by the United Arab Emirates (UAE), another major regional state, in a bid to establish economic ties with China in pursuit of foreign direct investment to build new industries and diversify from an oil-dependent economy without Western participation.

    China, in its turn, deepened its military partnership with Saudis, as it supplied the kingdom with some of the artillery and combat drones they have used in their ongoing war against the Houthi rebels in the Yemen conflict. In 2017, Beijing granted the kingdom a license to locally produce Chinese drones, making a room for the Saudi rulers to evade the US pressure, which has long sought to restrain Riyadh’s tactics in the conflict. As such, with the current engagement with Beijing, Saudis may seek assistance to develop also their nuclear capabilities. In 2020, it was reported that China had helped the Saudis construct a facility for processing locally mined uranium ore to extract yellowcake. Though it can be labelled for peaceful uses, the process of boosting nuclear capabilities could be the first step toward uranium enrichment. The kingdom denies allegations about its military intentions behind peaceful nuclear attempts and refuses to cooperate with the International Atomic Energy Agency and grant access for intensive inspections of its nuclear facilities. A few years ago, Riyadh already warned that if Iran acquired a nuclear bomb, it would follow suit quickly.

    In a nutshell, China and Saudi Arabia's proximity promises many prospects for both sides while the Western countries are distracted by the war in Ukraine. The US pressure to stop the kingdom’s pivot toward Beijing will unlikely give positive results in the near future since China is also not going to leave its rivals alone on the pitch.


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