Deepening Sino-Saudi Ties

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Deepening Sino-Saudi Ties

A thriving relationship has opportunities for Pakistan too

Muhammad Bilal Butt

In recent years, China and the Middle East have made some impressive diplomatic achievements. The inaugural China-Arab States Summit was successfully held in Riyadh at the end of 2022. China, then, helped bring about a historic rapprochement between Saudi Arabia and Iran earlier this year, sparking a wave of peace in the Middle East. The recently concluded 10th Arab-China Business Conference was another milestone in China’s efforts to engage with this energy-rich region as China and Saudi Arabia announced $10 billion in investments in mining, technology and renewables. This huge deal is being seen as a sign of the shifting power balance in the region which once was considered a US colony. Notably, the Arab-China conference was held just days after US Secretary of State Antony Blinken’s visit to Riyadh.

At the recently held 10th Arab-China Business Conference, Saudi Arabia and China signed 30 investment agreements worth $10 billion across various sectors including technology, renewables, minerals, supply chains, and healthcare. As per the Saudi Investment Ministry, the Saudi government has entered into agreements with various Chinese entities for several projects. These include a joint venture aimed at conducting automotive research, development, manufacturing and sales. Additionally, collaborations have been initiated for the development of tourism-related applications and the production of rail wagons and wheels within the state.
The Conference
The Conference was described as a “mega-gathering” of some 3,500 business leaders, innovators and decision-makers from more than 26 countries — including the biggest-ever delegation from China. The program of the event included plenaries, workshops, special meetings, and side events, all focused on various topics such as environmental sustainability, social responsibility, governance, and supply chain resilience. As part of efforts to enhance trade relations with China, Saudi Arabia has announced the revival of the Silk Route during the event. Saudi Investment Minister Khalid Al-Falih emphasised that the Kingdom can serve as China’s gateway to the Arab world, offering a strategic position as the world’s second-largest economy seeks to strengthen trade ties with the region.
Saudi Foreign Affairs Minister Prince Faisal bin Farhan said during his opening remarks that China was the biggest trade partner for Arab countries as the total commercial or trade exchange between the two sides hit $432 billion in 2022 with a growth of 31 percent compared to 2021.
The foreign minister said Saudi Arabia represented 25 percent of the total trade between China and the Arab states and that the volume of commercial exchange between Saudi Arabia and China saw a 30 percent increase compared to 2021, reaching $106 billion in 2022.
“We are proud of the achievements that we have through our partnership so far,” said Prince Faisal, adding that this “pushes them even further” to enhance these relations based on mutual will.
The Agreements
Several deals were also signed at the key event in Riyadh. The deals include a $5.6 billion agreement between the Kingdom and Human Horizons, a Chinese developer of autonomous driving technologies and manufacturer of electric cars, to establish a joint venture for automotive research, development, manufacturing and sales.
The business deals and great enthusiasm for cooperation seen at the Business Conference offered the latest sign of closer diplomatic and economic ties between China and Arab countries, following a slew of recent major developments, including the first China-Arab States Summit at the end of 2022 and China’s contribution to the resumption of diplomatic ties between Saudi Arabia and Iran.
US influence in the backseat?
Keeping a steady influence among the Arab nations has always been crucial and both the US and China have managed to keep a steady relationship with them, especially with Saudi Arabia. However, China has recently stolen the spotlight after it historically brokered a deal between Saudi Arabia and Iran as they agreed to restore diplomatic relations. Moreover, at a time when Saudi Arabia is following a long-term vision which aims to shift its economic reliance from energy products to other sectors, it sees China as a key partner and the two countries are expected to only come closer as their common interests grow.
From energy trade to Vision 2030
China and Saudi Arabia have strong economic ties for decades, thanks to China’s insatiable appetite for Saudi oil. Trade between the two countries was worth more than $106 billion in 2022, a 30% rise from the previous year, according to Saudi government figures. This compares to $55 billion in US-Saudi trade.
China imports half of its oil from the Middle East and is the top oil customer of both Saudi Arabia and Iran. As Saudi attempts to diversify its economy from energy production via the Vision 2030 plan, Chinese companies are set to benefit from the awarding of huge infrastructure contracts.
A Chinese firm has already built Makkah’s light-rail system, which helps hundreds of thousands of pilgrims to get around the holy city. The 18-kilometer line, with nine stations, was the first to be built by a Chinese company in the Middle East.
Among other deals in the works, a Chinese construction firm won the contract to build a 28-kilometer high-speed rail tunnel to NEOM, the kingdom’s under-construction smart city on the Red Sea.
Several Middle Eastern countries have signed up for infrastructure projects linked to China’s massive Belt and Road Initiative (BRI), dubbed the New Silk Road, which aims to boost trade between Asia and the rest of the world.
Iran-Saudi detente: a turning point
In March, China demonstrated its growing clout in the Middle East when it brokered a surprise rapprochement between the kingdom and Iran, seven years after the archfoes severed ties.
The end of hostilities also led to the restoration of ties between the kingdom and Syria, which Washington has criticized.
In a further embarrassment to the US, Palestinian leader Mahmud Abbas was recently in Beijing after the Chinese expressed readiness to help facilitate long-stalled peace talks between Israel and the Palestinians.
US-Saudi relations, meanwhile, have deteriorated since the 2018 murder of dissident journalist Jamal Khashoggi, a US resident, inside the Saudi consulate in Istanbul.
They worsened after US President Joe Biden took office in early 2021 and released a US intelligence assessment that Saudi crown prince Mohammed bin Salman approved Khashoggi’s killing, which he has denied.
Other rows have simmered over the Saudi intervention in Yemen’s devastating conflict, human rights and oil prices.
Opportunities for Pakistan
Saudi Arabia and other Gulf countries are interested in economic-investment-oriented and technology-sharing, wide-ranging relationship with China. They all want China’s heavy investment and technological expertise to convert their oil-based economies into industrial economies, combined with infrastructure development.
The Arab/Gulf countries also want alternative sources for acquiring the defence equipment and weapons at competitive prices. These countries also wish to have balanced and good relations with all major powers, like the US/EU, China and Russia to draw equal benefits from all. Hence, Saudi Arabia’s and other Arab/Gulf countries’ growing economic relations with China and their efforts to have balanced relations with all major powers are welcome developments which will also be beneficial for Pakistan. Already, a recent rapprochement between Saudi Arabia and Iran facilitated by China’s mediation is a good development, as it would be now much easier for Pakistan to have friendly relations with both the countries.
Saudi Arabia and Arab/Gulf countries’ deeper BRI-friendly relations with China will also be beneficial for Pakistan in attracting Arab countries’ investment for the CPEC-related projects, as these countries will now have more confidence in doing that. China-Arab countries growing relations will also enhance the CPEC-based trade between China and these countries, including Russia/CARs whose trade to Arab countries will also be routed through this route.
For availing above-mentioned opportunities to Pakistan’s diplomatic and economic benefit, it is important for Pakistan’s major political parties to develop a culture of mutual tolerance and agree on a comprehensive charter of domestic politics to be followed by all. The major political parties should also agree on a consensus based minimum 15 years long economic development charter to be followed by all successive governments to make Pakistan economically a self-reliant country. All the major political parties should also agree on a legal framework for holding transparent elections and arresting corruption in the country. After signing the aforementioned charters by the major political parties, the successive Pakistani governments should focus on an early completion of the CPEC, along with aptly handling the terrorism issue.
In the past decade, China’s strategy has become more mindful and intentional. The diversification of economic ties with Saudi Arabia is one such example. Beijing is no longer content with being just a main customer of the region’s crude oil. Instead, it wants to maximise the region’s potential as a market for Chinese goods, labour and technologies and embed itself in the economic futures of the countries in the region through investment and long-term collaboration. Instead of being purely transactional, China is developing a regional strategy that combines shared visions on domestic governance and connected economic future.
This commitment has effectively boosted China’s credibility in the region as an economic partner and as a diplomatic player. This is in stark contrast to the constant questioning about whether the US is fully committed to the region and Washington’s shifting geopolitical focus. Beijing’s economic buy-in, consistent investment and bilateral relationships are perhaps the most effective instruments in its competition with the US for influence in the region.
The challenge for Washington is tremendous. With a conscious strategy from Beijing to deepen Middle East ties, it will be even more difficult for the US to juggle among its different geopolitical priorities, which include Ukraine, the Indo-Pacific and China. Beijing does not need to achieve the maximum within its capacity. It only needs to show it is doing more and better than the US to win the hearts and minds of the leaders in the region.
China’s deepening strategic engagement also offers the Middle Eastern countries more room for manoeuvre and more bargaining power with the US. The availability of options and alternatives is always a powerful reminder for Washington that the region does not have to follow American principles and guidelines.

The writer is a student at KEMU, Lahore.

Muhammad Ali Asghar

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