Saudi Arabia And China Are Building Closer Economic And Trade Relations

(MENAFN- TimesNewswire ) On the afternoon of July 17th, the Anhui-Saudi investment and Trade Matchmaking conference was held in Riyadh. More than 20 key enterprises from China's Anhui province and over 50 key enterprises and investment institutions from Saudi Arabia participated in this event. This is just a microcosm of the close economic and trade cooperation between Saudi Arabia and China in recent years.

Saudi Arabia is the most influential country in the Middle East region. China and Saudi Arabia established diplomatic relations in 1990. Over the past 30 years, the two countries have maintained close political, economic, and cultural exchanges. When diplomatic relations were established, the trade volume was only $400 million. Since 2001, Saudi Arabia has become China's largest trade partner in the Middle East, a position it has maintained to this day. In 2023, the bilateral trade volume between Saudi Arabia and China reached $107.23 billion, with Saudi imports of $42.86 billion and exports of $64.37 billion. Saudi Arabia's economy is heavily dependent on oil, with the government controlling the country's main economic activities. Saudi Arabia is the world's second largest country with proven oil reserves (owning 24% of global proven oil reserves) and the largest oil exporting country. Saudi Arabia has long been China's largest crude oil supplier. In 2023, the 1.4 billion population of China imported 85.959 million tons of crude oil from Saudi Arabia. In November 2023, the central banks of Saudi Arabia and China signed a currency swap agreement with a scale of 50 billion yuan/26 billion Saudi riyals. In addition to the oil and energy sector, the two countries have also achieved fruitful results in other economic fields. 27% of Saudi oil exports and 25% of chemical exports go to China. China has exported a large amount of machinery, metal products, precision instruments, textiles and clothing to Saudi Arabia since its reform and opening up. The economic structures of the two countries are highly complementary.

Since 2024, Saudi entrepreneurs have invested in Chinese companies by jointly establishing funds; Saudi entrepreneurs' investment directions have expanded from the original mining, jewelry, retail, and biotechnology to various new industries such as transportation services, whole vehicle logistics, food delivery, and online education. Chinese entrepreneurs are also closely watching business opportunities in Saudi Arabia. In May, China's Baosteel announced a collaboration with Saudi Aramco and the Saudi sovereign wealth fund, planning to invest up to $4 billion to build a steel plate production plant in a new economic zone in Saudi Arabia. In June, the 10th Arab-China Business Conference was held in the Saudi capital Riyadh, with more than 2,000 representatives from 23 countries participating, the largest scale ever. The Saudi Investment Minister Khalid Al-Falih said,“Now is the time for China to become the main investment partner in the development of the Arab world.”

The close economic ties are a reflection of the close political relations between the two countries. In recent years, Saudi King Salman has made state visits to China in March 2014 and March 2017. In January 2016, when Chinese President Xi Jinping visited Saudi Arabia, the two countries established a comprehensive strategic partnership. In December 2022, President Xi Jinping attended the first China-Arab States Summit held in the Saudi capital Riyadh. The heads of state of the two countries signed the“China-Saudi Arabia Comprehensive Strategic Partnership Agreement.” The two sides issued a joint statement and signed cooperation documents in areas such as jointly building the Belt and Road Initiative and aligning it with Saudi's“Vision 2030”, as well as energy, investment, judiciary, education, and media.

The Saudi Arabian government's economic plan“Saudi Vision 2030” announced in 2016 has set three major goals for Saudi Arabia: the heart of the Arab and Islamic world, a global investment powerhouse, and a hub connecting Asia, Europe and Africa. As Saudi Arabia tries to transform its economy from energy production to diversification through the“Vision 2030” plan, Chinese companies will benefit from Saudi's massive infrastructure contracts, and the political and economic relations between the two countries will become even closer.

MENAFN30072024006250013577ID1108501414