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Saudi Arabia - China Policy

Beijing and Riyadh normalized diplomatic relations in 1990. China and Saudi Arabia signed the Memorandum of Understanding on Mutual Establishment of Trade Representative's Office on November 11, 1988. Trade representatives from the two countries assumed their posts in 1989. On 21 July 1990, China and Saudi Arabia signed a Communiqu and announced the establishment of diplomatic relations between the two countries. The Chinese Consulate General in Jeddah opened on April 25, 1993. In April 1998 China agreed on the establishment of the Consulate General in Hong Kong by Saudi Arabia.

Saudi Arabia is China's top trade partner in the Middle East. Chinas overriding foreign policy objective now is to secure energy to fuel domestic growth. China imports oil, gas and petrochemicals from Saudi Arabia, while Saudis imports electronics, textiles and food from China. Chinas presence is largely perceived as non-ideological, economically oriented and pragmatic.

Chinese hajj pilgrims have traveled to Saudi Arabia every year since 1955; their number regularly exceeded 6,000 in the 1990s, and by 2003 had ballooned to over 10,000. A total of 11,863 Chinese Muslims made organized pilgrimages to Saudi Arabia during the year 2013.

The Middle East is more important to China than to the United States as an oil supplier. Three of the top four suppliers of oil to the United States are in the Western Hemisphere (Canada, Mexico, and Venezuela), which comprised about 50% of total US petroleum imports, and Saudi Arabia only supplied about 8% of total US demand [as of 2010].

Since King Abdullah's historic visit to Beijing in January 2006, the Saudi-Chinese relationship has focused predominantly on energy and trade. However, the relationship may be showing signs of political evolution. While the Chinese would likely prefer to stay away from political controversy, their economic power and permanent seat on the UN Security Council has made it more and more difficult for them to avoid politics altogether. The incentives for the Saudis to try and leverage their economic relationship with China for political gain with respect to sensitive regional issues, such as Iran and the Israeli-Palestinian conflict, were significant and growing.

Foreign Minister Yang Jiechi arrived in Riyadh on 13 January 2010, the first high-level visit since Chinese President Hu Jintao's February 2009 "Trip of Friendship and Cooperation." FM Yang's visit coincided with the 20th anniversary of Saudi-Chinese diplomatic relations, and followed three days after Chinese Trade Minister Chen Deming co-chaired the 4th session of the Saudi-Chinese Joint Commission in Riyadh.

China had recently surpassed the US as the largest importer of Saudi oil. Saudi Arabia's investments in China have increased significantly over the past few years, including a $3.5 billion refinery in Fujian and a $2.86 billion joint-venture petrochemical complex in Tianjin. Additionaly, President Hu Jintao commemorated the opening of a cement plant when he visited Saudi Arabia in February 2009.

Saudi Arabia's more forward-leaning approach, including large-scale investments in China, indicates a maturing of the bilateral relations and assumes a more pro-active, rather than reactive, role towards economic engagement. China was now the Saudi's number two trade partner after the US Saudi-Chinese bilateral trade was estimated at $40 billion in 2008, while Saudi-US trade was estimated at $67 billion during the same time period.

Saudi Arabia committed significant investments in China, including the $8 billion Fujian refinery. Increased trade has also brought increased friction, including anti-dumping complaints from both sides. Saudi Arabia was thinking through how best to take a leaf from the Chinese playbook and use these expanded trade ties to achieve important political goals. In this regard, Saudi Arabia has told the Chinese that it is willing to effectively trade a guaranteed oil supply in return for Chinese pressure on Iran not to develop nuclear weapons.

Saudi Arabia will continue to develop its ties with China, in part to counterbalance relations with the West. While King Abdullah's preference is to cooperate with the US, he had concluded that he needed to proceed with his own strategy to counter Iranian influence in the region.

In September 2013, China's net imports of petroleum and other liquids exceeded those of the United States on a monthly basis, making it the largest net importer of crude oil and other liquids in the world. Saudi Arabia continues to be the largest supplier of crude oil to China and in 2013 provided 19% of China's 5.6 million barrels per day.

In 2013, the strategic friendly relations between the People's Republic of China and the Kingdom of Saudi Arabia maintained sound momentum of growth and their cooperation in various fields made steady progress. The two countries maintained frequent high-level contacts. Military cooperation between the two countries moved forward steadily. In April, Deputy Minister of Defense His Right Honorable Prince Khalid bin Sultan bin Abdul-Aziz Al-Saud visited China and met with President Xi Jinping and Defense Minister Chang Wanquan respectively. China's naval escort fleet made a number of stops at the Port of Jeddah for replenishment. Ethan Meick wrote 16 June 2014 that "In early 2014, Newsweek reported China sold DF-21 ballistic missiles to Saudi Arabia in 2007. Neither Beijing nor Riyadh confirmed the sale, and Saudi Arabia has not publicly stated it possesses any DF-21 missiles. The reported sale would have been Chinas first ballistic missile transfer to Saudi Arabia since the late 1980s and Chinas first ballistic missile export since 1992. The missile deal could indicate a growing willingness in Riyadh to look to China for major weapons purchases. Closer China-Saudi Arabia security relations seem probable given Saudi Arabias growing ties with China in other areas particularly energyand its increasingly strained relationship with its most important security partner, the United States, largely over U.S. policy on Iran and Syria.... According to Newsweek, Central Intelligence Agency (CIA) officers accepted Chinas DF-21 ballistic missile sale to Saudi Arabia following meetings with Royal Saudi Air Force officers during the spring and summer of 2007."

China became Saudi Arabia's largest trading partner in 2015. President Xi Jinping paid a state visit to Saudi Arabia in January 2016, during which the two countries lifted their ties to a comprehensive strategic partnership. Chinese President Xi Jinping embarked on state visits to Saudi Arabia, Egypt and Iran. His first diplomatic trip of the year came amid escalating tensions in the region. It was also his first Middle Eastern tour since taking office in 2012. President Xi Jinping's visit to Saudi Arabia is dominating headlines of local newspapers. His arrival comes as Saudi and Iran lock horns in their worst conflict in over a decade.

Later, Saudi Defense Minister Prince Mohammad bin Salman, the king's son, visited China in August 2016 and discussed defense ties, resulting in joint military exercises in October 2016. King Salman wanted to go further.

Chinese President Xi Jinping and visiting Saudi Arabian King Salman bin Abdulaziz Al Saud agreed the two countries will step up cooperation in all areas and push forward their all-round strategic partnership. In their talks 16 March 2017 in Beijing, Xi recalled his visit to Saudi Arabia last year, during which he reached consensus with King Salman in advancing bilateral ties and cementing cooperation in international and regional affairs.

Xi said he was happy to see that consensus had been implemented by both sides. China supports Saudi Arabia as it advances on a development path suitable to its national conditions, maintains national sovereignty, security and development interests, and plays greater role in regional and global affairs, Xi said. China supports Saudi Arabia in its "Saudi Vision 2030" plan, and welcomes the country to be a partner in the Belt and Road Initiative, Xi said.

China is a reliable and stable market for Saudi Arabia's oil, Xi said, calling for closer cooperation in such areas as energy, communication, aviation, finance and investment, culture, education, public health, technology, tourism, media and security.

King Salman voiced adherence to the one-China policy, and vowed to cement cooperation with China in the areas of trade, investment, finance and energy, in order to upgrade their all-round strategic partnership. Saudi Arabia highly values China's stance of non-interference in other countries' internal affairs, and solving disputes through dialogue and peaceful means, he said. King Salman also appreciated China's role in maintaining international peace and security, expressing his hope for China's greater role in Middle Eastern affairs.

China and Saudi Arabia signed 14 agreements and memorandum of understandings (MoU) on 16 Mrch 2017 in such areas as energy, investment, finance, culture and aerospace. The cooperative documents were signed in Beijing during the state visit of Saudi Arabia's King Salman bin Abdul-Aziz. Among the 14 cooperative documents, one is an MoU on production capacity and investment cooperation, which involves 35 big projects worth $65 billion.

China's choice should be to have independent relations with both Iran and Saudi Arabia. Another level of interaction should be strong relations with all GCC nations. But it would be diplomatic feat to balance things. Saudis are prone to expect preferential treatment, and this may be a problem due to Iran factor.



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Page last modified: 16-03-2017 19:03:40 ZULU