During Chinese President’s trip to the Saudi kingdom, a number of agreements were signed between Riyadh and Beijing. The agreements represent a strengthening of ties between China and Saudi Arabia. Washington, a longtime friend of Riyadh, is cautiously monitoring the situation.
As the leading oil exporter in the world, Saudi Arabia is aiming at boosting ties with the global economic superpower and the greatest energy user. The economies of the Arab states of the Middle East and China have been growing together.
A partnership agreement was signed by the two parties in the areas of oil, trade, refining, financing, and security. Following are explanations of the statements of the agreements and memoranda of understanding (MOUs) inked during Xi’s visit to the kingdom.
China’s President Xi inked a comprehensive and detailed partnership deal with the Saudi King. Saudi and Chinese businesses reportedly signed 34 investment projects in cloud services, renewable technology, and IT. The agreements also cover the transportation, logistics, healthcare, housing, and building industries.
The Saudi administration and Huawei have signed an MoU for the construction of high-tech buildings and cloud networking technology infrastructure in Saudi towns. The MoU is also reached between Saudi Aramco and Shandong Energy. It explores cooperation on comprehensive refining and petrochemicals in China, as well as a prospective crude supplies arrangement and a contract to offtake polymers.
According to Saudi ACWA Power, has inked nine MoUs with Chinese organizations. The agreements set the foundation for ACWA’s clean energy finance, investments, and development.
An MOU between the Chinese company ENOVATE Motors and the Saudi company Sumou develops a plant for electric vehicles in Saudi Arabia with a production capacity of 100 thousand vehicles annually.
China Saudi Agreements; Details
The major commercial partner of Saudi Arabia is China, with trade relations valued at $87.3 billion last year. Chinese imports from Saudi Arabia totaled $57 billion, compared to $30.3 billion in exports.
With 18% of Beijing’s ovewrall crude oil imports coming from Riyadh, the country is also China’s top oil provider. from January to Octover 2022, imports totaled 73.54 million tonnes, costing $55.5 billion.
China imported 87.56 million tonnes of oil worth $43.9 billion in 2021. The amount represented 77% of China’s overall imports of goods from Saudi Arabia.
Early in 2022, Aramco decided to move forward with plans to erect a $10 billion oil refineries and petrochemical plant in Chinese soils. That is the company’s single most extensive investment project in the world’s number 2 economy.
A coalition headed by EIG Global Energy Partners, located in the United States, includes the state-owned Silk Road Fund of China. Last year, the firm reached an agreement to pay $12.4 billion acquire 49% of Saudi Aramco’s oil pipes infrastructure division.
A group led by BlackRock Real Assets and Hassana Investment Company includes Silk Road as a member. The consortium said in February that it had paid $15.5 billion for a 49% interest in Aramco Gas Pipelines Company.
Four months ago, Saudi utility development company ACWA Power announced that it had reached a deal with Silk Road Fund. As part of Beijing’s One Belt One Road initiative, the two parties jointly invest $1 billion in a 1.5 GW gas-fueled power plant in Uzbekistan.
A contract was also inked between China Electronics Technology Group and the Saudi Advanced Communications and Electronics Systems Co (ACES). The deal is for the kingdom to produce UAV payload systems. Earlier this year, the UAE announced its intention to buy 12 L-15 light attack aircraft from China.
