Chinese President Xi Visits Saudi Arabia To Build New Trade Relations
Declining ties between Arab states and the US are paving the way for a "new Silk Road" as the Gulf diversifies its alliances, and China seeks to gain influence and greater commercial partnerships
Chinese President Xi Jinping arrived in Saudi Arabia on Wednesday at the invitation of King Salman bin Abdulaziz and will stay for three days to participate in the first China–Gulf Cooperation Council (GCC) summit, China’s Foreign Ministry confirmed on Wednesday morning.
The official Saudi Press Agency (SPA) said on Tuesday that the reunion between the Saudi and Chinese leaders will serve to “bolster the historic ties and strategic partnership between the two countries.” SPA also reported that initial deals worth $29.26 billion will be signed by the two countries during the visit.
Xi will attend the summit in the Saudi capital, Riyadh, joined by leaders of other Arab states as well.
The relationship between China and the GCC countries is defined primarily by energy supply, according to Joe Hepworth, OCO Global’s Middle East director, specializing in trade, investment, and economic development across the MENA region.
China is looking for stable long-term agreements for its oil and gas requirements, while the GCC’s oil-rich countries are looking for the stability of demand that China can offer, Hepworth told The Media Line.
Alessandro Magnoli Bocchi, founder and CEO of Foresight Advisors, an economic advisory company that focuses on the Middle East, Europe, and emerging markets, adds that, besides energy, China and the GCC governments are signing agreements in the fields of infrastructure, education, sports, and environmental protection.
He told The Media Line that these ties come “slowly but surely, as the globe’s center of economic gravity is moving to Asia. This tectonic shift in the world’s economy often gets overlooked, but because of the current crisis, it’s gaining momentum. The East is rising, again.”
Máté Szalai, a Marie Skłodowska-Curie Cofund Fellow at Ca’ Foscari University in Venice, Italy, told The Media Line that China has become the most important trade partner of the GCC, surpassing the European Union. “There is also a potential for a free trade agreement,” he added.
On a geopolitical level, notes Hepworth, China is looking for allies and influence in order “to make headway in a region traditionally tilted toward the West and the US, and the Middle East is probably more open to such approaches than it has been for a long time, with US relations, particularly for Saudi, at a low.”
He adds that the ties between the US and the GCC will not be affected by Gulf-China relations, at least not in the short term. “The Middle East wouldn’t turn its back on the US given the history and the US role as a security guarantor in the region, which is something that China couldn’t undertake, not least given its close ties with Iran,” he said.
Szalai says even though the deepening relations between Iran and China can be worrying for the Arab Gulf countries, “so far China did manage to depoliticize its presence in the region, focusing on mutually beneficial relations.”
Hepworth believes these relations can be seen as a hint to the US not to take the Middle East for granted. It could also serve as a signal that “the historic ties that do currently bind [both China and the Gulf countries] are not indestructible and need love and attention,” he added.
Szalai says it is important to note that from the Gulf perspective, the “superpower rivalry” between the US and China, does not necessarily obligate it to choose one side.
“Previous debates between the US and the Gulf have incentivized GCC states to diversify their relations and seek collaboration with other partners. This, however, does not represent an intention of replacing the US,” he said.
These new ties between the Middle East and China have steady historic roots. “The Arab world and Asia are rediscovering their history, a legacy of trade ties and investment corridors,” Magnoli Bocchi said.
The “new Silk Road” is reemerging as an important East-East corridor, according to Magnoli Bocchi, who noted that, in the past, “Arab dhows sailed the waters of the Indian Ocean, and Asian caravans transported textiles and spices across the desert. Today, Middle Eastern resources, above all, capital and energy, spur East Asian growth, and Asian governments seek in the Arab world supplies for their domestic demand, and markets for their goods.”
He describes the developing commercial relations as “new trade on old routes,” and as “an old phenomenon with the catchy nickname: the new Silk Road. This “road,” says Magnoli Bocchi, is being revived as it is recurrently traveled by a growing number of heads of state paying each other visits, building mutual trust and enhancing economic ties.
