BRI & Saudi Arabia: Emerging Socio-economic and Geopolitical Trends | By Dr Mehmood-ul-Hassan Khan


BRI & Saudi Arabia: Emerging Socio-economic and Geopolitical Trends

One Belt One Road Initiative (BRI) has great success in the Middle East. The Kingdom of Saudi Arabia is one of the biggest recipients of the BRI investments in the GCC and MENA. Most recently, Saudi Arabia and China agreed on jointly coordinating investment in the countries of the BRI.

It seems that rapidly changing socio-economic priorities, geopolitical conflicting realities and geostrategic realignments in the region and around the globe have encouraged both countries to extend their mutual win-win cooperation in the diverse sectors of economy, energy, green initiatives, infrastructure development, joint ventures, ICT, Artificial Intelligence (AI) and education and culture in which BRI would play a vital role in the days to come.

The primarily proposed cooperation between China and Saudi Arabia aims to ensure oil supply and demand security to BRI countries. China has always considered Saudi Arabia as a strategic partner and both countries strive for further alignment between the Saudi and China visions of the future, especially in the energy sphere.

China and Saudi Arabia agree to further 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.

For the further strengthening of bilateral relations, on the invitation of King Salman bin Abdulaziz Al Saud of the Kingdom of Saudi Arabia, President Xi Jinping attended the first China-Arab States Summit and the China-GCC Summit in Riyadh and paid a state visit to Saudi Arabia from December 7 to 10.

The China-Arab States Summit, the China-GCC Summit and President Xi’s state visit to Saudi Arabia have become innovative head-of-state diplomacy of China’s new journey for major-country diplomacy with Chinese characteristics, and a major pioneering undertaking in new China’s Middle East diplomacy.

It seems that with the end of its so-called war mission in Iraq and the complete withdrawal of forces from Afghanistan, the US is pulling back its interests in the Middle East. US President Joe Biden’s recent trip to Saudi Arabia and Israel revealed an indifferent American interest in the region.

The relationship between the US and Saudi Arabia has deteriorated because Saudi Arabia refused to cooperate with the US on the adjustment of oil production, the Russia-Ukraine conflicts and other issues.

Saudi Arabia is the largest source of energy in the world, which finds itself exporting energy to China. It means that Saudi Arabia follows its economic interests and this does not mean at all a shift in strategic relations. Ultimately, it allows China to step-in in the region for a win-win proposition in which its mega project BRI is dismantling all types of socio-economic, geopolitical, geostrategic and psychological barriers to promote greater regional connectivity and immense socio-economic integration.

During his state visit to Saudi Arabia in 2016, the Chinese President Xi China-Saudi Arabia relations were upgraded to a comprehensive strategic partnership. Now China has become Saudi Arabia’s largest trading partner which contributes to the development of this relationship.  In the past few years, cooperation between China and Saudi Arabia has reached its peak and Saudi Arabia and China have succeeded in establishing several successful companies in energy projects, advanced industries, etc.

Unfortunately, China’s economic relations with the Middle East are often projected by the Western media as “China poses a challenge to the US’ dominance in the Middle East. It is baseless propaganda because the Chinese presence in the region merely focuses on the economy, while the US presence is a security presence based on strategic and economic alliances along with a long history of direct relationships. As for the Chinese presence, it is focused on economic development emanating from the BRI. Saudi Arabia has taken steps toward the revival of the Silk Road project by establishing the Saudi Silk Road Company in the Jizan region, in which there are many Chinese companies. These companies work in energy, contracting and other fields.

To conclude, hopefully, bilateral cooperation between China-KSA in the field of energy will also be modernized, such as establishing basic infrastructure and facilitating trade and investment as two important aspects of this cooperation and the exchange of high and new technologies in the fields of nuclear energy, renewable energy and space satellite technologies.

It is suggested that China and the GCC and MENA countries should look forward to closer and deeper cooperation in the future through several important areas, for example: mutual political trust and security cooperation; development, economic and trade cooperation; communication and mutual benefit between civilizations.

It seems that Saudi Vision 2030 and China’s BRI naturally complement one another. The strategic objective of the BRI is to enhance logistical and infrastructure connections while promoting commerce and investment. On the other hand, the Saudi Vision 2030 intends to create a diverse economy independent from oil trade. Thus both create win-win propositions.

In 2022, Saudi Arabia has been the largest recipient of Chinese investments in the BRI, averaging US$5.5 billion worth of deals, which demonstrates Beijing’s commitment and long-term ambitions in the Middle East. In order to further strengthen the BRI and industrial capacity cooperation, the two countries signed a Memorandum of Understanding (MoU) during President Xi Jinping’s visit to Riyadh in January 2016, elevating the bilateral relationship to a comprehensive strategic partnership from which Saudi’s engagement in the BRI benefited greatly.

One of the largest deals between China and Saudi Arabia on the BRI is that signed between Saudi Arabian Oil Company (Saudi Aramco) and China Petroleum & Chemical Corporation (Sinopec). According to the MoU, the companies will jointly assess refining and petrochemical integration opportunities; engineering, procurement and construction; oilfield services, upstream and downstream technologies and in the areas of carbon capture and hydrogen processes.

China is Saudi Arabia’s largest trade partner. Bilateral trade reached a total of US$87.31 billion, according to China’s National Bureau of Statistics (NBS). This was a year-on-year growth rate of 30.1 percent. Of this, Chinese exports to Saudi Arabia reached US$30.32 billion, up 7.9 percent year-on-year, while Chinese imports from Saudi Arabia reached US$56.99 billion, up 46 percent year-on-year.

It seems that the future of economic cooperation between China and Saudi Arabia is promising and full of opportunities. In this regard, both countries should harmonize their national development strategies, the “Economic Belt and Silk Road” initiative and mutually work for the completion of the Kingdom’s Vision 2030.

It is hoped that BRI investment and projects in Saudi Arabia would bring green revolution, infrastructure development, energy & food security, AI, space & cooperation and last but not the least health cooperation between the two countries.

In this connection, the most recently signed “comprehensive strategic partnership agreement” would be a value addition for the BRI. It will cover several sectors pertaining to green energy, green hydrogen, photovoltaic energy, information technology, cloud services, transportation, logistics, medical industries, housing and construction factories.