A Growing Partnership

Chinese and Saudi ‘strategic partnership’ is likely to be a game-changer in Middle East and beyond

The glowing highlight of the last week undoubtedly was the visit of Chinese President Xi Jinping to Saudi Arabia for promoting bilateral cooperation in strategic fields, while also attending China-Gulf Cooperation Council (GCC) and China-Arab leaders’ summits. The international observers are attaching great importance to this visit, particularly against the backdrop of intensifying rivalry between China and the United States, which is also being characterized by many as Cold War 2.0.

The last visit of President Xi Jinping to Riyadh was in 2016. However, in these six years, rifts have developed and widened between Saudi Arabia and its strategic ally in the past eight decades – the United States. Differences have emerged between crown prince and key strategist for Saudi future plans Muhammad Bin Salman (MBS) and Democrats, particularly because of the Khashoggi episode. MBS’s retaliation towards the Biden Administration was also evident in the Ukraine war, where by not paying heed to US advice for increasing oil production, he refused to take measures that could damage Russia. As a result, the visit of President Biden to Saudi Arabia five months ago was without much traditional fanfare or warmth as used to be the case during the past visits of the top US leadership.

During the bilateral talks, President Xi and MBS relayed meaningful messages of their partnership “heralding into a new era” with “deepening of strategic cooperation in multiple areas”. The comprehensive talks between the leaders as well as the joint statement clearly signaled that these two important countries are ready to move forward into a new alliance in a world of shifting balances. This is signified by a holistic agenda covering topics from space research, digital economy and infrastructure development to Iran’s nuclear programme, the Yemen issue and the Ukraine war, conveying that the two sides agreed on key priorities in crafting a future relationship. Chinese giants like Huwaei have entered into agreements for exploring and expanding share in the lucrative Arab and GCC markets.

Riyadh, which has for the past eight decades depended on US security guarantees in return for ensuring secured oil supplies to the United States and its western allies, has lately been getting suspicious about Washington’s commitment of protecting the key Saudi interests viz-a-viz Iran and generally in the region. During a summit between China and countries of the Gulf Cooperation Council (GCC) in Riyadh, Xi said China wants to build on current GCC-China energy cooperation and will continue to “import crude oil in a consistent manner and in large quantities from the GCC, as well as increase its natural gas imports” from the region. China is the world’s biggest buyer of oil which met 17 percent of its oil needs from Saudi Arabia in 2021, accounting for more than 25 percent of Saudi Arabia’s total crude exports. Consequently, last year bilateral trade was $ 87.3 billion, with a surge of 30 percent over the previous year.

As a result of the visit, Saudi national oil giant, Aramco, and Chinese Shandong Energy Group have announced they are exploring collaboration on integrated refining and petrochemical opportunities in China. Reportedly, Saudi Arabia has already made one of its largest investments in China with Aramco’s $10 billion into a refinery and petrochemical complex in China’s northeast.

During the Summit the two sides also agreed to cooperate in the fields of security and defense, a domain which was previously an exclusive hallmark of the US-Saudi Arabia cooperation. The security engagement would assume greater importance in the coming years especially in view of Saudi Arabia’s threat perceptions from Iran and such other regional challenges in the wake of waning US security presence in the region. Arms purchases from Saudi Arabia and its Gulf neighbors are likely to increase their tilt towards China and Russia.

China and Saudi Arabia have agreed to adopt non-interference into each other’s internal political matters as a cardinal pillar of the engagement. This is anticipated to be mutually beneficial. In the past, Saudi Arabia despite its strategic relations with Washington and the west received constant pressure on its human rights record, Yemen issue and conservative religious values. On the other hand, China has also been facing western criticism on Taiwan, human rights and Uighur issues. Thus, developing the China-Saudi Arabia equation seems to nourish an understanding of non-interference on these sensitive issues so that cooperation in substantive areas can grow in an unabated manner.

In the interaction with GCC leaders, President Xi Jinping explored the way forward for the use of Shanghai Petrol and Gas Exchange as a platform for oil and gas transactions in Chinese Yuan. Oil and gas purchases as well as pledges for investments in oil production in the Arab and GCC countries emanate from the fact that China has become leading importer of oil as well as largest source of overseas investments, but the two sides have not made a formal announcement to switch their oil transactions to Yuan and have decided to undertake more preparations before taking such measure to avoid any unforeseen implications.

Despite the momentous profile of this visit, the overall US official reaction has been cautious, muted and downplaying its significance. The Strategic Communications coordinator at the US National Security Council John Kirby observed that the visit was not a surprise for the United States and that President Xi has been traveling to different parts of the world, including the Middle East and that “the US is mindful of the influence that China is trying to grow around the world”. Notwithstanding such routine-like comments, the general sense among the analysts is that the visit has generated considerable anxiety in the relevant US circles and serious assessments are being made on real implications of the visit.

Saudi Arabia on its part too rejected notions that the visit portrayed heightened polarization. At a press conference, while commenting on the visit outcomes, Saudi Foreign Minister Faisal bin Farhan Al-Saud stressed that his country was keen to increase cooperation with all parties. He remarked that “competition is a good thing and I think we are in a competitive marketplace”. The Saudi Foreign Minister added that his country felt “it was important that it was fully engaged with its traditional partner, the US, as well as other rising economies like China”.

The visit also created an impression that in their enthusiasm for achieving substantive future partnership and conveying signals to the US for a shift, both China and GCC partners could not anticipate Iran’s reaction. Iran is an important country of the region and its relations with China and Russia have made meaningful progress particularly on regional matters as well as Iran’s nuclear issue. Some explicit expressions regarding these issues in Xi’s visit perturbed Iranians and they also have given a reaction. China, however, immediately moved to address these concerns and assured Iran that these matters would be thoroughly discussed during the forthcoming Chinese Deputy Premier’s visit to Tehran. More balancing would be required as China deepens its cooperation with the Arab world.

For the past four decades, China has made enormous transformation from a backward overpopulated country to a well-resourced forward-looking major economic and military power of the world. In doing so, it has threatened US-dominated post-World War II global order. Strategic re-alignments are, therefore, a recurring theme of the contemporary global and regional equations. President Xi’s Summit interaction with Saudi Arabia and GCC is a momentous development in this power play with long lasting consequences. Pakistan also needs to keep itself abreast with the changing geo-political scenario in our region and be ready for adjustments in future that could be beneficial for our geo-economic interests.

The writer is a former ambassador of Pakistan to Afghanistan