During the three-day visit by Chinese President Xi Jinping to Saudi Arabia (December 7-9, 2022), phrases like ‘strategic partnership’ and ‘investment opportunities’ were frequently used to describe relations between China and Saudi Arabia. What does strategic partnership really mean?
Each party has different understanding of it. For China, it means new markets to export its goods. Beijing also wants to secure reliable energy supplies for its fast-expanding economy. It buys more than 25 percent of the kingdom’s oil, making it the largest market for Saudi black gold.
For the desert kingdom and more particularly for crown prince Muhammad bin Salman (MbS), it means a trading partner who will not raise awkward questions about human rights even if those who have done so already (the US, for instance) are not particularly bothered by the oppression inflicted on Saudi citizens. Further, MbS is looking for security which, alas, the Chinese will not be able to provide. It is not part of China’s approach to global politics.
Thus, China-Saudi relationship and beyond that the Chinese-Arabian relationship are focussed on commercial rather than security aspects. This is what emerged from Xi’s three-day visit with more than $30 billion in agreements in energy and infrastructure sectors signed between Beijing and Riyadh. The joint statement released by the Saudi Press Agency (SPA) at the conclusion of the visit also confirmed the commercial and trade aspects.
The Chinese president’s visit was three summits rolled into one. The first was with Saudi Arabia. Second, a meeting of the Gulf Cooperation Council (GCC) was held to expand China-GCC trade relations. On the final day of Xi’s visit, MbS had gathered some 30 Arabian rulers in Riyadh for a China-Arab summit. This was to show that MbS was the top gun among Arabian potentates. It was all about image rather than substance. Not surprisingly, the Chinese foreign ministry described Xi’s meeting with Arabian rulers as “an epoch-making milestone in the history of the development of China-Arab relations.”
For MbS, it was an opportunity to polish his jaded image that had taken a severe beating following the gruesome murder of Jamal Khashoggi in the Saudi consulate in Istanbul on October 2, 2018. Ample evidence exists that MbS had ordered the murder.
It must be kept in mind that agreements between states are not finalized at the spur of the moment. Months or years of preparations go into making them to work out the details. Visits by heads of state are arranged to preside over the signing of the final documents. This is what happened in Riyadh between December 7-9.
President Xi had last visited the kingdom in 2016. It was during that visit that the Chinese president invited Arab states to join the recently-launched Belt and Road Initiative (BRI). A January 2016 policy report released by Beijing invited the Arab states to join the Chinese vision for development.
China expressed willingness “to coordinate development strategies with Arab states, put into play each other’s advantages and potentials, promote international production capacity, cooperation and enhance cooperation in the fields of infrastructure construction, trade and investment facilitation, nuclear power, space satellite, new energy, agriculture and finance, so as to achieve common progress and development and benefit our two peoples.”
Six years later, many of these proposals have been finalized or put into practice. MbS’ pet project, Saudi Vision 2030, announced with much fanfare in September 2016, links up with China’s BRI. This was given practical shape in early 2017 when Riyadh signed a $65 billion agreement integrating the Saudi Vision 2030 with BRI. It included agreements on petrochemical integration, engineering, refining, procurement, construction, carbon capture, and upstream/downstream development.
China’s trade with Saudi Arabia rose to $87.3 billion in 2021, an increase of 39% over 2020, while US-Saudi trade in 2021 was only $29 billion declining from $76 billion in 2012. The figures for the six-member GCC bloc are even more impressive: total bilateral trade was valued at $161.4 billion. Naturally, the Saudis contributed the largest share.
With talk of a free trade agreement between China and the GCC, these figures will easily increase. There is also talk of expanding the BRICS (Brazil, Russia, India, China and South Africa). Both Saudi Arabia and the UAE have shown keen interest in joining.
On the final day of his visit, Xi again raised the issue of trading oil and gas in yuans. MbS has expressed interest. How serious he is and whether he can actually make the move is difficult to determine at this stage. Should the switch to yuan materialize, it will be a major blow to US dollar hegemony. Is MbS using the threat of trading in yuan to draw US attention to take him and his kingdom seriously?
In the matter of security, an issue that dominates Saudi thinking, the Chinese are not going to be of much help. Unlike the US that operates more than 800 military bases worldwide, the Chinese have none. Further, China’s focus is on trade and connectivity, not sending military forces abroad.
Regardless, China’s deepening ties with the Middle East will be at the expense of the US. For 77 years, Saudi Arabia has been a US-puppet state. Apart from getting weapons at exorbitant prices, the Saudis have gained nothing from their relation with the US. They have not acquired any technical skills—it could be argued that the Saudis did not want to acquire such skills—but the Americans were quite happy to take their oil wealth. This may be coming to an end, or at least will not be at such a massive scale anymore.