The 2020s have been proving to be in favor of forging stronger relations between Riyadh and Beijing. In May 2024, the Saudi Finance Minister, Muhammad Al-Jadaan, had a series of Saudi-Chinese meetings in Beijing. These talks concluded by putting a strong emphasis on invigorating cooperation between the Kingdom and its economic partner, China. In various fields encompassing Artificial Intelligence, renewable energy and smart cities for bringing up economic transformation and creating new avenues for growth and development. This meeting can be regarded as a follow-up on the building up of a comprehensive strategic partnership in December 2023, between Crown Prince and President Xi.
Moreover, China has also previously served as a mediator for brokering a rapprochement between Iran and Saudi Arabia, in March 2023, marking an important milestone in the Arab world and for China’s relations with Arab countries. In August 2023, BRICS extended an invitation to Saudi Arabia to join the informal BRICS Alliance, which Riyadh formally joined in January 2024.However, some sources say that Saudi Arabia has not yet officially joined and is “still evaluating.” The MBS’s Vision 2030 and the Chinese Belt and Road Initiative (BRI) are complementary, for which both have been investing heavily in various economic projects.
This holds immense significance for Riyadh, as it is putting efforts to expand and diversify its economy while phasing out its oil dependence. There are rising concerns over the oil purchases to be made in Renminbi rather than dollar, that has been a longstanding global currency, and is likewise becoming increasingly controversial. This calls into question the scope of the relations developing between Riyadh and Beijing, and assumptions about the China’s presence in the Middle Eastern region solely as an economic actor.
These opportunities have opened the Kingdom with ample potential for expansion and modernization. In the meantime, Saudi Arabia is attempting to attain equilibrium between China’s short-term economic benefits and its long running strategic partnership with the US, which is critical to regional security and stability.
China’s increasing presence in the Gulf reflects its strategic objectives, which include gaining influence, ensuring energy supplies, and developing stronger political and economic ties with the countries that comprise the Gulf Cooperation Council (GCC). The Gulf plays a major role in the China’s Belt and Road Initiative (BRI), which entails large expenditures in ports, infrastructure, and logistics to boost connectivity and trade routes. Every member of the GCC has endorsed cooperation agreements about BRI. Saudi Arabia has also partnered with Chinese companies focused on industrial and port projects such as terminals at Jeddah ports on Saudi Arabia’s Red Sea coast.
As Saudi Arabia is seeking to diversify its economy away from oil, Chinese firms are taking up the advantage as the China’s Road Fund acquired 49% share in ACWA, a Saudi renewable energy company. Furthermore, Saudi Arabia is also collaborating with Chinese firms in field of electric vehicles, for which both signed a deal of $5.6 billion in June 2023 and prior in 2022 the Chinese firm, EV-startup Enovate also entered a joint venture for establishing a $500 million plant in Saudi Arabia.
Saudi Arabia has also partnered with the Chinese firms Huawei and Alibaba to develop digital infrastructures, which includes 5G technology, smart cities and data centers. Last year, in September, Huawei launched a “cloud region” in the Kingdom, to facilitate AI applications and government services. Chinese academicians are also teaching at top AI research institutions in Riyadh such as the King Abdullah University of Riyadh.
Since 1993, when China became a net oil importer, the Middle East has supplied roughly half of its oil. With 15% of imports, Saudi Arabia ranked as China’s second- largest oil supplier by 2023, Russia being the first. These energy ties have made strong and varied business linkages possible. China’s trade with Middle East have doubled from 2017 to reaching over US $507 billion in 2022.
This cooperation ranging from oil trade to investment projects have fueled concerns within US that the Gulf may act as an affordable pathway for Beijing to access sensitive US technologies. With its strategic relationships and investment agreements with different countries like Saudi Arabia, China seeks to achieve its objectives that could assist in the establishment of a more multipolar global order. Beijing is showcasing a transition from American hegemony to a more diverse variety of global power centers by entering alliance with the Gulf states.
Alongside economic relations, Saudi Arabia has also expanded its political and security relations with China, through organizing visits to China and forging deals. China had minimal security alliances with Middle Eastern states until 2000s. however, after PLA opened its first overseas military facility in Djibouti in 2017, there was an increase cited in PLA navy’s ports and joint exercises. Saudi Arabia and Chinese People Liberations Army (PLA) conduct yearly joint naval exercises, “Blue Sword,” and Saudi Ministry of Defense also hosts Chinese military officials.
Chinese defense industries have begun to gain traction in the Gulf market that was predominantly under western influence. Additionally, in the 2010, Saudi Arabia procured a significant portion of its combat drones, namely the CH4 and Wing Loong, from China, a technology that its western allies are hesitant to share with Riyadh due to fear of violating the missile control regime (MTCR). This year in February 2024, at the World Defense Show, held in Riyadh, China exhibited a wide variety of defense equipment, notably the drones (both armed and unarmed), fighter aircraft models, long-range air and missile defense systems, air-to-air missiles, anti-tank equipment and C4ISR kit. Beyond this, Riyadh has partnered with Chinese defense enterprises to jointly develop ballistic missiles and military drones, which is significant for the country’s aspiration to grow their defense industry.
Keeping in view the evolving Saudi alliances, the Kingdom maintains a historical long-standing strategic alliance with the US that primarily includes military outposts and close collaboration on security and intelligence issues. Since Saudi Arabia’s economy remains bound to the US dollar and its oil transactions are also performed in US dollars. This revenue is the main driver of its economy. Consequently, the status of the global oil market and the value of the US dollar, both have an immediate impact on the Saudi economy. The US continues to have the strongest security footprint in the gulf in terms of both defense and security provider. US weapons accounts for 82% of Saudi’s overall arms imports.
Saudi Arabia’s growing affinity with China represents a profound shift in international relations, with potential ramifications for world geopolitics. Riyadh’s aim to safeguard its political interests and diversify economic alliances in a world that is transforming quickly. While economic ties with China are anticipated to continue and possibly expand, Riyadh’s historic and entrenched relationship with Washington remains unlikely to be replaced. Saudi Arabia may need to maintain harmony in its relation with both to maximize its advantage of economic opportunities and retain vital security partnerships as part of its foreseeable geopolitical standing.
