BRI & Saudi Arabian’s Eastern Journey: A Way Forward
The Chinese Belt & Road Initiative (BRI) is flourishing in Saudi Arabia and successfully converting sands into high skyscraper eco-friendly state and society alike. It seems that after Saudi’s accession into SCO the China-Saudi strategic partnership has entered into a new phase of immense socio-economic development, greater regional connectivity, infrastructure development, regional security and last but not the least, qualitative development. Thus, the role of BRI is paramount and far-reaching in the further strengthening of Saudi-China bilateral relations and mutual trade, investment, joint ventures and other sectors.
Moreover, the Chinese facilitated Saudi-Iran peace agreement has already changed the socio-economic, geopolitical and geostrategic landscape of the GCC and the MENA. The subsequent meetings between both the states have clearly indicated that “New Oil World Order’ is imminent in the near future which would further strengthen Saudi-China partnership. It would further streamline energy security in the region and globally.
The Syrian President’s rapprochement with the UAE and Saudi Arabia has further strengthened the scope, prospect, utility and importance of China and its mega project BRI in the region Even sincere efforts are underway to resolve the burning issue of Yemen through coordinated efforts among the main stakeholders in the region.
Interestingly, the government of Saudi Arabia has also decided to join China, Russia, India and Central Asian Countries to trade in Chinese RMB which has rattled the US government and its policy makers. It would be the first collective step towards regional “de-dollarization” drive in the days to come. So forces of harmony, friendship, just global governance, peace and stability are making sincere efforts to gear the global economy in the post-pandemic era.
Fascinatingly, Saudi Arabia was the largest recipient of Chinese investment within the Belt and Road Initiative (BRI) during the first half of 2022. Hopefully, it will be further increased after the visit of Chinese President Xi Jinping to Saudi Arabia in 2022 during which projects of strategic importance were signed for the mutual benefit of both the states. The BRI aims to improve interconnection and cooperation across continents and move to jointly establish the Silk Road Economic Belt and the 21st century Maritime Silk Road. The Chinese government has focused on the international community, especially the countries along the initiative’s paths, to further its initiative.
Saudi Arabia was the primary recipient of the Chinese gas investment by about $4.6 billion, followed by Iraq because of its increasing demand of gas supplies in the country which has reached 56% of China’s energy contributions in 2021.
Meanwhile, the Kingdom’s merchandise exports reached $38.4 billion in May, compared to $21 billion during the same month last year, an 83.4% increase of $17.3 billion. The General Authority for Statistics (GASTAT) revealed that oil exports increased in May to $30.9 billion, compared to $15.2 billion during the same month in 2021, a 105.5% rise.
Moreover, the report revealed that the Kingdom’s exports to China last May reached $5.1 billion, 13.3% of the total exports, making it the leading destination for Saudi Arabia, followed by India and Japan, amounting to $3.9 billion.
Furthermore, seven China-Saudi Arabia cooperative projects worth $1 billion were signed at the sidelines of the first China-Gulf Cooperation Council (GCC) summit held recently in Riyadh. The agreements focusing on automobile manufacturing, new material, intelligent equipment and food sectors were signed at an investment conference.
One of the seven projects is the $892 million Shengong Saudi Project which seeks to boost cooperation between Shengong New Materials, a Guangzhou Development District-based enterprise, and Saudi Aramco Development Company, which had set up factories for new material modification and LED lighting in the Kingdom in two phases.
Interestingly, Saudi Arabia and China also agreed on jointly coordinating investment in the countries of the BRI. The proposed cooperation aims to ensure oil supply and demand security to BRI countries. It came in a virtual meeting co-chaired by Saudi Minister of Energy Prince Abdlulaziz Bin Salman and Vice Chairman of the National Development and Reform Commission of China Lian Weiliang. It would also be beneficial for Pakistan and CPEC’s further development in the country.
In the meeting, the co-chairs discussed areas where Saudi Arabia and China look to strengthen their relationship, such as oil and petrochemicals, de-carbonization technologies, electricity and renewables, hydrogen, energy efficiency, civil nuclear energy and supply chain security, in addition to industrial cooperation, the fourth industrial revolution, mining and logistics, civil aviation and aviation security and digital economy.
The Saudi Minister added that the trade exchange between the two countries has been steadily growing in the past five years. China is the number one export destination for the oil Kingdom’s exports. The Kingdom will continue to be its reliable and trusted partner.
To conclude, Saudi Arabia has further enhanced its global outreach by joining the SCO. It has now been granted the status of a dialogue partner in the Shanghai Cooperation Organization (SCO). Hopefully, it would change the map of global geopolitics in the future.
Most recently, Riyadh decided to join this bloc, strengthening Saudi Arabia’s ties with China and Russia. In a session chaired by King Salman, the Cabinet led by Crown Prince Mohamed bin Salman approved the memorandum granting Riyadh the status of dialogue partner in the SCO. Saudi Arabia’s decision to join the SCO reveals the new path Middle Eastern states are taking to the “East”.
According to the latest report of Reuters (2023) Beijing is currently Riyadh’s most important trade partner, with a trade value of nearly US$90 billion expected in 2021. At the same time, China became the main importer of Saudi oil.
The emerging economies especially and developing countries generally are very worried about the budding banking crisis in the USA and various macroeconomic circumstances abound, along with the debt ceiling remaining a concern, international trade is seeking other avenues outside of the US dollar.
Saudi Arabia also significantly strengthened its energy ties with China by announcing on Monday a $3.6 billion deal to buy 10% of China’s Rongsheng Petrochemical, which would see it supply 480,000 barrels per day of crude oil to the company.
It seems that after the Chinese successful diplomatically brokered Saudi-Iran peace agreement the focus of regional as well as world geopolitics has changed towards “East” and China has become a main player in the new “chessboard” which does not promote any power politics, bloc confrontation, socio-economic sanctions and interference in the domestic affairs of other countries.
Obviously, Chinese opening-up, modernization, qualitative development and BRI are transforming dreams into realities through removing elements of uncertainty by promoting unity, solidarity, cooperation and mutually beneficial propositions for all the countries. The Saudi-China partnership would become the new “Middle East Keystone” in the days to come.
