Saudi state media and China‘s foreign ministry confirmed separately that Chinese President Xi Jinping will visit Saudi Arabia on Wednesday (December 7) for a three-day state visit. Xi Jinping last visited Saudi Arabia in February 2016.
Xi is expected to hold bilateral talks with Saudi King Salman, who will also be attended by Crown Prince Mohammed bin Salman. It is expected that the amount involved in the agreement between the two parties may reach 30 billion US dollars.
In addition, Xi Jinping will also attend the first China-Arab States Summit and the China-Gulf Cooperation Council Summit to be held in Riyadh, the capital of Saudi Arabia. Reuters quoted people familiar with the matter as saying that China is expected to sign dozens of agreements and memorandums of understanding with Gulf and Arab countries related to energy, security and investment.
China is the largest buyer of Saudi oil. At the same time, the relationship between Saudi Arabia and its traditional ally the United States is at a low ebb. The latter has severely criticized Saudi Crown Prince Mohammed for his involvement in the “murder of exiled journalist Khashoggi”; The ban entered a low tide. However, China and Saudi Arabia have limited cooperation on security and other issues, mainly at the economic and trade level.
China: Intensive Diplomacy and “Divide and Conquer”
The economic and trade relationship between China and Saudi Arabia can be summarized as “a huge volume and a single structure” – the trade volume between the two countries has increased from US$400 million when diplomatic relations were established in 1990 to more than US$87 billion in 2021, accounting for 27% of Saudi oil exports 25% of China‘s exports of Saudi Arabia and chemicals go to China, but 95% of China‘s imports from Saudi Arabia are concentrated in oil and chemicals.
For China, one of the potential gains of this trip is to further expand the economic and trade field.
For example, in the field of infrastructure, Saudi Arabia proposed the “Vision 2030”, which aims to reduce the economy’s dependence on oil, including the automobile industry, military industry, communications industry, and the construction of a future city (NEOM), involving a planning of 500 billion US dollars. China‘s advantages in new energy vehicles, 5G and infrastructure may become part of the expansion of cooperation between the two sides.
For another example, the use of RMB for settlement in some oil transactions will greatly promote the internationalization of RMB. In March this year, the Wall Street Journal quoted people familiar with the matter as saying that Saudi Arabia is considering using RMB instead of US dollars for some of its oil sales to China. However, whenever the relationship between the United States and Saudi Arabia was cold before, similar news would be released, but no further action was taken.
“Petrodollar” is related to the strategic interests of the United States. At the same time, Saudi Arabia is the largest buyer of American weapons. It has a deep relationship with the United States in terms of strategy and security. It may be extremely difficult to promote RMB settlement. In contrast, although many oil transactions between Iran, Russia and China are settled in RMB, both countries are subject to US sanctions.
In the past three years since the outbreak, China has carried out intensive diplomatic activities. Xi Jinping has met with leaders of more than 30 countries in the past month. The Economist Intelligence Unit (EIU) analyzed in an email sent to BBC Chinese that Xi Jinping’s recent intensive diplomatic contacts are aimed at creating a more benign international environment for himself. China’s “divide and rule” strategy has frustrated Western powers and other More cooperation among allies, but the agency doesn’t think that’s achievable.
The United States has a solid foundation and great interests in the Middle East, but some problems have emerged recently. China has few exchanges in the Middle East, but it has a lot of space. It takes advantage of the shrinkage of the United States to seek greater diplomatic breakthroughs. China may break through the scope of existing energy transactions and reach cooperation in a wider range of economic and trade areas. If breakthroughs are made in the internationalization of the renminbi and security cooperation, it will inject new variables into the tripartite relations between China, the United States, and countries in the Middle East.
Saudi Arabia: Balancing and Hedging
When Xi Jinping visited Saudi Arabia, one of the focuses of public opinion was the luxury of the welcome ceremony. When Trump visited Saudi Arabia in 2017, he received a grand welcome, and King Salman personally greeted him at the airport. In contrast, the enthusiasm for Biden’s visit to Saudi Arabia in July this year was described by the media as “muted”.
One of the important reasons for this change is the murder of exiled Saudi journalist Jamal Khashoggi in 2018. After entering the Saudi Consulate in Istanbul, Turkey, Khashoggi was killed and dismembered by a Saudi assassination team. The whereabouts of his remains are still unknown.
U.S. intelligence believes that Saudi Crown Prince Mohammed bin Salman likely approved the murder at the time. During the campaign, Biden called Saudi Arabia facing a pariah state and stressed that there would be consequences.
However, after the outbreak of the Russia-Ukraine war in February this year, oil prices soared. In order to cope with the rising prices, Biden visited Saudi Arabia and hoped that the Organization of the Petroleum Exporting Countries (OPEC), which he led, could increase production and lower oil prices. But in October, OPEC later announced a production cut. In November, the U.S. government said in a court filing that Saudi Crown Prince Mohammad Khashoggi had “immunity” from a civil lawsuit.
Ayham Kamel, head of the Middle East and North Africa region of the Eurasia Group (Eurasia Group), believes that expanding relations with China is of course risky and counterproductive, leading to further deterioration of relations between Saudi Arabia and the United States, but Crown Prince Mohammed is certainly not motivated by Resentment and good relations with China.
Kamel said that after calculating the strategic gains and losses, the Saudi side believes that Beijing must be accepted because China has become an indispensable economic partner.
Jon Alterman, director of the Middle East program at the Center for Strategic and International Studies (CSIS), said that although Saudi Arabia’s relationship with China appears to be developing “much faster” than its relationship with the United States, the actual relationship cannot be compared. “It’s a far cry from the complexity or the intimacy.”