Global Courant
If proof was needed of how fast economic ties between China and Saudi Arabia are growing, just look at two events that took place last month.
The first was the China-Arab Business Conference in Riyadh. More than 30 matches at least $10 billion was reached at the meeting.
The second was the World Economic Forum event held last week in the Chinese city of Tianjin known as the “summer Davos.” The great importance Saudi Arabia attached to the event was reflected in the unprecedented number of prominent figures in attendance.
The kingdom sent one delegation of 24 officialsincluding the Minister of Economy and Planning and the Minister of Communications and Information Technology. While no major deals were announced, it was clear that both countries wanted to use the event to explore deep economic cooperation.
For decades, economic ties between China and Saudi Arabia centered on the kingdom’s crude oil exports. In recent years, however, the relationship has diversified rapidly, reflecting both countries’ desire to develop economic relations beyond the traditional focus on energy resources.
For China, the approach has evolved from purely transactional to much more multifaceted and woven into the economic and political future of Saudi Arabia and other countries in the region.
Consistent commitment
The Chinese buy-in serves as the most compelling assurance to regional powers of Beijing’s commitment to engage and remain in the region. This is in stark contrast to the perceived lack of involvement from the United States and poses a huge challenge to Washington’s efforts to maintain its influence in the Middle East.
Economic ties between Beijing and Riyadh were already strong. Saudi Arabia has been the largest exporter crude oil to China. The kingdom has also been Beijing’s largest trading partner in the Middle East for more than two decades. By comparison, China has been Saudi Arabia’s largest trading partner since 2013.
The clearest milestone that the relationship transitioned into something deeper came during President Visit of Xi Jinping to Saudi Arabia last December. The two governments identified a broad spectrum of future cooperation, including in energy, automobiles, supply chains, communications, transportation, mining and the financial sector.
Beijing and Riyadh have sought to find overlap between China’s Belt and Road Initiative and Saudi Arabia’s Vision 2030 reform program, leading to collaboration on new energy sources, including solar, wind and hydropower, and on the field of digital economy, such as a fifth generation (5G) telecom network.
These areas of cooperation came to the fore again at the China-Arab Business Conference last month. a $5.6 billion deal signed between the Saudi Ministry of Investment and Chinese automaker Human Horizon will focus on the development and production of electric vehicles.
Also a $500 million deal between Saudi ASK Group and China National Geological & Mining Corporation will enable the Chinese company to develop copper mines in the kingdom.
Another area for future cooperation is tourism, referred to as the “new oilof Saudi Arabia. Since restrictions on visitors were eased, the kingdom considers tourism a key area for economic growth and has vowed to invest more than $800 million in its development. At the China-Arab Business Conference, 26 matches were signed between Saudi Arabia and Chinese travel agencies.
Wide range of business interests
The scope and scale of the dealmaking suggest an evolution of China’s purely transactional relationship with Middle Eastern countries.
Previously, what China wanted from the region – energy resources – could be acquired through commercial trade, without the need for long-term strategic investment. The transactional nature of the relations allowed China to maintain good relations with often opposing camps and actors in the region. The approach may have given Beijing flexibility, but it was criticized for lacking strategic commitment or long-term vision.
In the past decade, China’s strategy has become more conscious and focused. The diversification of economic ties with Saudi Arabia is one such example.
Beijing is no longer content with being just a major customer of the region’s crude oil. Instead, it wants to maximize the region’s potential as a market for Chinese goods, labor and technologies; and anchoring themselves in the economic future of the countries in the region through investment and long-term cooperation.
Rather than being purely transactional, China is developing a regional strategy that combines shared visions of domestic governance with a connected economic future.
This commitment has effectively increased China’s credibility in the region as an economic partner and as a diplomatic player. This is in stark contrast to the continued question of whether the US is fully committed to the region and Washington’s shifting geopolitical focus.
Beijing’s economic buy-in, consistent investment and bilateral relations are perhaps the most effective tools in its competition with the US for influence in the region.
The challenge for Washington is enormous. With a deliberate strategy by Beijing to deepen ties with the Middle East, it will become even more difficult for the US to juggle its various geopolitical priorities, including Ukraine, the Indo-Pacific region and China.
Beijing does not have to reach the maximum within its capacity. It just needs to show that it is doing more and better than the US to win the hearts and minds of the leaders in the region.
China’s deeper strategic involvement also gives countries in the Middle East more room for maneuver and more bargaining power with the US. The availability of options and alternatives is always a powerful reminder to Washington that the region does not have to follow US principles and guidelines.
In the meantime, Saudi Arabia’s deepening and diversifying economic ties with Beijing will continue.
This article is provided by Syndication Bureauon which the copyright is based.
Yun Sun is director of the China program and co-director of the East Asia program at the Stimson Center in Washington.
Similar:
Loading…
