As the world’s largest oil exporter looks to cement ties with the world’s second-largest economy, Saudi Arabia’s King Salman oversaw the signing of deals worth potentially $65 billion on the first day of a visit to Beijing.
Embarked on a month-long Asian tour is the octogenarian monarch, who has overseen the launch of an ambitious economic reform plan since his accession two years ago.
With the aim to promote investment opportunities in the kingdom, including the sale of a stake in its giant state firm Saudi Aramco, the visits are being made to countries that are some of world’s fastest growing importers of Saudi oil.
After losing market share to Russia last year and ten by working mostly with China’s top three state oil firms, Saudi Arabia has sought to boost oil sales to China, the world’s second-largest oil market.
“For a long time, China and Islamic countries have respected each other and had win-win cooperation, and have created a model of the peaceful coexistence of different cultures,” Xi said, according to China’s Foreign Ministry.
The ministry added that he hoped China could play an even greater role in Middle East affairs, Salman told Xi.
“Saudi Arabia is willing to work hard with China to promote global and regional peace, security and prosperity,” Salman said.
Involving everything from energy to space, the memorandums of understanding and letters of intent were potentially worth about $65 billion, deputy Chinese Foreign Minister Zhang Ming said.
“President Xi Jinping and King Salman are old friends,” Zhang said. “Practical cooperation between China and Saudi Arabia has already made major achievements, and has huge potential.”
Ranging from exploring investments in oil and petrochemical plants to ecommerce and co-operating in renewable energy markets, Saudi and Chinese companies signed 21 deals besides the MOUs agreed between the two governments.
In its bid to diversify assets and secure long-term agreements for its oil, for Saudi Aramco, the potential investments fit with its strategy to expand its refining and chemicals portfolio.
While Saudi Basic Industries Corp (SABIC) and Sinopec have agreed to develop petrochemical projects in China and Saudi Arabia, an MoU with state-run Norinco will look into building refining and chemical projects in China.
Despite its reliance on the region for oil, China has traditionally played little role in Middle East conflicts or diplomacy. But the Syrian conflict, where Riyadh supports rebels battling President Bashar al-Assad, is one place that it has been trying to get more involved, especially in efforts to end Syria’s six-year-old civil war.
In a war against the Iranian-aligned Houthi movement that controls much of the country, China also offered support for Yemen’s government, which is backed by a Saudi-led Gulf Arab coalition, last year.
Zhang said both leaders agreed that these issues must be resolved politically via talks and both the Yemen and Syria crises were discussed by Salman and Xi.
China visit next week is slated for Israeli Prime Minister Benjamin Netanyahu. As China lacks the historical baggage of the Americans or the Europeans, it was trying to play the role of “honest broker” in the Middle East, one Beijing-based diplomat from a Muslim-majority country told Reuters.
“China does not take sides and that is appreciated,” said the diplomat, speaking on condition of anonymity.
(Adapted from CNBC)