China's intricate diplomatic dance with Saudi Arabia
China’s intricate diplomatic dance with Saudi Arabia
WRITTEN BY GIDA MALAFONTE
31 March 2020
In the last thirty years, diplomatic and economic ties between Saudi Arabia and China’s have come a long way since relations were first established after 1990. In the last decade however, Saudi Arabia has sought to further deepen ties with Beijing, adopting a ‘Look East’ policy as China becomes the largest market for oil exports from the Kingdom.
President Xi Jingping’s Belt and Road Initiative (BRI), enunciated in 2013, has opened up the prospect of even closer Sino-Saudi ties, with the Greater Middle East becoming an area of increasing geostrategic importance to Beijing as the Chinese economy’s demand for oil continues to grow. With the establishment of a comprehensive strategic partnership in 2016, the focus of this new partnership has been to enhance cooperation across all sectors of the economy but inevitably the focus has fallen on energy.
In August 2017, China and Saudi Arabia signed several deals worth nearly $70 billion in joint ventures which covered investment, trade, energy, transport, communications and other technology sectors. In early 2019, Crown Prince Mohammed bin Salman undertook a two-day state visit of China which saw Saudi Aramco awarded the contract for a new petrochemical plant in Liaoning province, as well as closer cooperation on security. Telling Prince Salman voiced support for China’s security crackdown in Xinjiang on the predominately Muslim Uighur population in the name of ‘counter-terroris’ measures. Perhaps most revealingly, the 2019 visit also opened the door for joint Saudi-China cooperation in Pakistan via the China Pakistan Economic Corridor (CPEC) where Riyadh is already developing an $8 billion oil refinery in Gwadar, a key Indian Ocean port being developed by capital spending from China.
Developing energy relations
The majority of China’s domesitic investments have perhaps unsurprisingly been made in the energy sector, as China’s demand for Saudi Arabia’s oil has largely eclipsed that of the the United States, whose own approach towards Riyadh has been one of decoupling and increasing energy self-sufficiency. This historic shift with regards to Washington has seen Saudi Arabia reduce its overall dependency on US oil exports, protecting itself from further potential economic and security shifts should US popular scepticism of Saudi Arabia and its assertive foreign policy grow.
As U.S.-Saudi ties have waxed and waned since 9/11, China’s ties with Saudi Arabia have only developed further. The two sides have signed 35 economic agreements, to facilitate economic cooperation, worth a total of $28 billion and Crown Prince Mohamed bin Salman agreed in 2019 a $10 billion refining and petrochemical complex in the city of Panjin. The deals have increased economic and trade relations by 32% since and Chinese oil imports from Saudi Arabia rose to over1,800,000 barrells in July 2019. Riyadh is looking to reduce its dependency on oil exports and diversify their rentier-state economy by creating new industries, and it is receiving Chinese investments, and developments with the Belt and Road Initiative.
Sino-Saudi military ties have for the most part been limited as Beijing cannot provide the same level of defense guarantees against external security threats as the U.S. Central Command. However joint counter-terrorism exercises have been conducted in recent years, and are beginning to enhance security ties.
Closer energy ties however have consquences for both states. China’s own lack of resources makes its economy highly dependent on foreign energy sources, as domestic energy production cannot satisfy the country’s overall needs. This is in line with China’s wider over reliance, and some would argue vulnerability, regarding imports generally. Any regional military conflict in the Middle East, such as one between the United States/Saudi Arabia against Iran, or a major disruption of energy supplies via the sealanes of the Persian Gulf would have a major detrimental impact on the Chinese economy. The result is that, perhaps inevitably, Beijing is increasingly at risk of being drawn, whether it wants to or not, into the sectarian tensions of the Greater Middle East.
Indeed the day may come soon where China, like Japan and South Korea more recently, feels compelled to secure its national energy interests in the Strait of Hormuz via more direct means and deploy the People’s Liberation Army Navy.
National Strategies
The trend towards growing Sino-Saudi ties are not however limited to just energy. China and Saudi Arabia as part of their national strategies, with the Vision 2030 plan and the BRI plan respectively are extending their relations to facilitate stronger economic and capital integration between the states.
Saudi Arabia’s Vision 2030 diversification program is aiming to expand sources of national income, restructuring the Kingdom’s economy to reduce its dependency on oil, privatizing to develop the wider workforce and promote wider cultural interactions with China. Beijing sees a role for the Belt and Road Initiative in the Kingdom by building a framework of trade and infrastructure ties.
Saudi Arabia’s Vision 2030 privatization program intends to raise the quality of services, reduce government spending and increase competition, meanwhile attracting fresh foreign direct investments. One risk of Saudi Arabia’s privatization is that it will expose key sectors of the Saudi economy to Beijing. As we have seen in South Asia, Europe and in Africa, the Chinese Communist Party could attempt to convert its economic influence through investments in Saudi Arabia into political influence, by gaining large ownership stakes in key sectors of the economy.
China is already the largest investor in the Middle East region, committing $20 billion in loans for reconstruction in the Arab world and $3 billion in loans in the banking sector. The spread of investments in the technology sector could also enhance China's model of technological censorship, reinforcing, empowering and enhancing the repressive practices of current autocrats in Saudi Arabia.
China’s soft power has also been amplified in Saudi Arabia with the introduction of the Chinese language in schools and universities, which will provide approximately 50,000 new jobs for Saudi citizens. Nonetheless, the United States is concerned about Chinese investments and their impact on the US-Saudi relations, as the US hegemony over the global financial markets is decreasing and Saudi Arabia is reducing its excessive reliance on the US, for budget payments or arm sales.
A growing security relationship
China has also ramped up its military engagement and arms sales to Saudi Arabia due to the low-cost, high-tech weapons systems, and willingness to sell weapons to any actor. Saudi Arabia has relied on Chinese arm sales only for intermediate-range ballistic missiles and long range fuel tanks which are not sold by the US, yet these weapons are used in Yemen . China can therefore sell weapons at attractive prices to any actors and this encourages the continuity of wars.
Saudi Arabia is trying to diversify its economic and military ties with other actors, yet it does not want to permanently damage its military ties with the US by cooperating excessively with China. Saudi Arabia is still very dependent on US arm sales for its geopolitical objectives including countering rival Iran.
Chinese-Saudi military relations have been very limited as China cannot provide the same security against international threats as the US can, but joint counter-terrorism exercises have been conducted to enhance military relations. Additionally, China has agreed to build a manufacturing plant in Saudi Arabia to increase the country’s military capabilities, as the US will not sell killer drones to Saudi Arabia.
A closer foreign policy?
China’s foreign policy has enhanced its economic relations with Saudi Arabia even if it has close ties with Iran, Saudi Arabia’s rival. Saudi Arabia and other Gulf monarchies are losing confidence in the US security guarantee and are seeking alternative security partnerships due to the geopolitical tensions.
China remains neutral in the regional disparities and encourages a policy of non-interference, not wanting to interfere in the domestic affairs of Saudi Arabia or other states, as well as refusing to engage in proxy wars. This has allowed China to stayed on good terms with all conflicting parties, avoiding to intervene in the region as previously done by states like the US, hindering democracy or the wellbeing of civilians.
China is careful about meddling into the domestic and national affairs of Saudi Arabia as it is cautious of criticisms about its detention, mistreatment and persecution of the Muslim Uighurs population, placed in ‘educational-vocational camps’, which are mass internment camps. Saudi Arabia instead of denouncing China’s oppression and human rights violation of the Muslims Uighurs, has turned a blind eye and remained silent, maintaining strong economic ties with China, wary that any criticisms could upset the economic and trade ties.
With the recent COVID-19 outbreak, Saudi Arabia is also delivering support and aid to China providing medical equipment and supplies to combat the outbreak, demonstrating the strong relations and ties between the two states.
Saudi Arabia’s strategic goal by 2030 is to diversify its sources and China’s goal is to become an economic powerhouse with the Belt and Road Initiative. Beijing and Riyadh have pursued cooperation focusing on securing energy resources and trade, prosperous economic relations, investments in transport, security and the technology sectors. Saudi Arabia and China’s relationship demonstrate a mutual respect and policy for non-intervention in the domestic affairs of the other, which has resulted in the abandoning of China's Muslims population due to strong economic interests.
DISCLAIMER: All views expressed are those of the writer and do not necessarily represent that of the 9DASHLINE.com platform.
Author biography
Gida Malafronte is a graduate student of International Relations and Global Studies from Nottingham Trent University, UK. Her areas of interest include the Middle East and North Africa alongside aspects concerning security and economic issues. Image credit: CC BY-NC 4.0/Stuart Rankin/Flickr.