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Taylah Bland

Rachel Horne

China helped broker a normalisation of long-fraught relations between Saudi Arabia and Iran earlier this month, a deal that came after years of attempted overtures between the two Arab countries.
Beijing’s role in the forging the agreement and its desire to strengthen relations with both Iran and Saudi Arabia shows Chinese President Xi Jinping’s changing calculus. China is looking to move the focus of relations past trade and towards strategic, long-term interests.
Last year’s China-Gulf Cooperation Council (GCC) summit in Riyadh was the highest-level diplomatic event between China and the Arab world since the founding of the People’s Republic.
At the event, Xi said China and GCC countries would work together on issues spanning finance, science and technology, aerospace, language and culture. In response, Saudi Arabia’s Crown Prince Mohammed bin Salman – who chaired the summit on behalf of King Salman bin Abdulaziz Al Saud – praised Xi’s leadership of China, which he said has made “huge development achievements and become a major progressive force steering global governance”.
Historically, the China-Saudi relationship revolved around oil. In 2022, Saudi Arabia reclaimed its position as China’s largest oil supplier. In November, Saudi Arabia exported 1.77 million barrels per day to China, making the oil trade between the two worth US$55.5 billion.
In 2021, bilateral trade reached US$87.3 billion, with China’s crude oil imports accounting for US$43.9 billion of that sum. In the first two months of this year, Russia overtook Saudi Arabia as China’s largest oil supplier after sanctions that followed Russia’s invasion of Ukraine forced Moscow to lower its prices.


But Xi’s visit to Riyadh last year signals a new era in China-Saudi relations. The two countries agreed to enhance the comprehensive strategic partnership they established in 2016, moving past oil to cover green energy, communication technology and infrastructure.
They agreed to deepen coordination across industries to further integrate China’s Belt and Road Initiative and Saudi Arabia’s Vision 2030. Saudi Arabia signed a memorandum of understanding with Huawei – a Chinese tech conglomerate which has become a target of US sanctions – on building hi-tech facilities.
An increase in diplomatic meetings and people-to-people exchanges is also on the cards. Under the enhanced partnership agreement, China and Saudi Arabia’s leaders will meet every two years.
The two sides said they would support each other in maintaining their sovereignty and pledged not to intervene in each other’s internal affairs. Both countries have been criticised by the United States and others for human rights violations. Saudi Arabia also reaffirmed its adherence to the one-China principle.

Both China and Saudi Arabia have much to gain from strengthening their partnership at precisely this moment. The war in Ukraine threatens China’s heavy reliance on Russian natural gas and oil.
While China was able to capitalise on cheaper coal from Russia, it is scanning the horizon for other opportunities. Since Xi’s visit, China has continued to push for the creation of a China-Gulf free-trade zone in the hopes of guaranteeing its oil supply from Saudi Arabia.
But there is more to these developments than energy. In October last year, Opec+, the Riyadh-led coalition of oil producing nations, decided to cut back oil production, angering the Biden administration, which blamed Saudi Arabia for keeping oil prices high and indirectly sustaining Russian revenue. Xi travelled to Riyadh two months later, sending the message that any space left by the US would be claimed by China.
What Saudi SCO decision means for China’s influence in Middle East
Although the US says it remains committed to the Middle East, China has made itself an attractive partner to one of the region’s most powerful countries. With Riyadh’s relationship with Washington under strain, Beijing has seized the opportunity to exert greater influence in the Middle East and showcase what it can bring to the table as a state committed to non-interventionism. Meanwhile, a closer relationship with Beijing offers Saudi Arabia leverage in dealing with the US.
However, whether China and Saudi Arabia can meet each other’s lofty expectations remains to be seen. Saudi Arabia has not made any concrete moves to shift to the petroyuan. And China has maintained close ties with Russia, giving it leverage in negotiating with Riyadh.
Nevertheless, it is clear that the China-Saudi bilateral relationship has broadened, and that beyond energy security, mutual agreement on sovereignty and greater interest in bilateral diplomacy carry weight in regional power dynamics.
Taylah Bland is the current Schwarzman Fellow at the Asia Society Policy Institute’s Centre for China Analysis
Rachel Horne is a researcher at the Asia Society Policy Institute’s Centre for China Analysis, focused on Chinese foreign policy


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Diplomacy

China-Saudi relationship is evolving beyond oil to help reshape the Middle East

Chinese President Xi Jinping (left) shakes hands with Saudi Crown Prince and Prime Minister Mohammed bin Salman outside the al-Yamama Palace, in Riyadh, Saudi Arabia, on December 8, 2022. Photo: Saudi Press Agency/ AP

The Huawei P50 Pro at Huawei’s largest overseas store in Riyadh, Saudi Arabia, on February 2, 2022. Photo: Xinhua

Chinese President Xi Jinping pledges to back further efforts to mend relations between Saudi Arabia and Iran

Chinese President Xi Jinping pictured with Prince Mohammed bin Salman in Beijing in 2019. Photo: Xinhua

China, Saudi Arabia consolidate energy ties amid uncertainty over Russian supplies

Chinese President Xi Jinping goes to shake hands with Crown Prince Mohammed bin Salman, Saudi Arabia’s de facto ruler, upon arrival in Riyadh in December. Photo: Saudi Press Agency via AP

Engineers at work in a Saudi Aramco facility in eastern Saudi Arabia. The Panjin complex could import an estimated US$160 billion worth of Saudi crude over its lifespan. Photo: Saudi Aramco Handout via AFP

Why China’s role as a peacemaker in Ukraine may be limited

 Illustration: Brian Wang

Opinion

News

China

World

Middle East

Both Beijing and Riyadh have much to gain from strengthening their partnership, with Saudi Arabia’s relationship with the United States becoming increasingly strained and China in search of greater diplomatic influence in the Middle East and energy security amid Russia’s invasion of Ukraine


Both Beijing and Riyadh have much to gain from strengthening their partnership, with Saudi Arabia’s relationship with the United States becoming increasingly strained and China in search of greater diplomatic influence in the Middle East and energy security amid Russia’s invasion of Ukraine.


Saudi Arabia

5050

Energy

Trade

Expresses the views, ideas and conclusions of the author. (Eg. Enough of Crazy Rich Asians, think of crazy poor Hongkongers.)
