Days after welcoming Secretary of State Antony Blinken as part of efforts to reset relations with the US, Saudi Arabia turned its attention to boosting ties with one of Washington’s main competitors: China.
In recent days, the Saudi capital has played host to the largest ever Chinese-Arab business gathering. Under the chandeliers and vaulted ceilings of Riyadh’s grandest conference hall, Saudi officials spoke of integrating China into the Arab region and Chinese executives said they stood ready to “de-Americanize” the world’s top oil exporter. At lunch they mingled over a fusion of dim sum and local mutton.
“The time has come, in my view, for China to be a principal investment partner in the Arab world’s development drive,” Saudi Investment Minister Khalid Al-Falih said in a keynote address on Sunday, suggesting the Arab economic powerhouse act as a “bridge” to the rest of the region.
As the Middle East has become less of a strategic priority for the US, it has left a political and economic vacuum in the region that its rival is rushing to fill.
Crown Prince Mohammed bin Salman, Saudi Arabia’s de facto ruler, began his tenure by courting his traditional allies, embarking on a grand tour of the US and building ties with Donald Trump’s administration. But relations soured after the killing of a Washington Post columnist by Saudi agents in 2018.
President Joe Biden’s poor relationship with MBS, as the prince is known, also contributed to Saudi Arabia rebuffing US entreaties to pump more oil as crude prices spiked following Russia’s invasion of Ukraine. That pushed US-Saudi relations to one of their lowest points in decades.
Relations have since improved, with Blinken’s visit the latest sign of progress. The prince is also visiting France from Wednesday and will meet President Emmanuel Macron later this week at the Elysee palace. Still, deep disagreements remain with the West over issues including China’s forays into the Middle East, particularly in defense and security.
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Having failed to influence American policy on Iran’s nuclear program or elicit much US help in fending off attacks by Iranian-backed militia, MBS turned to Chinese mediation to restore ties with his Gulf rival instead.
Business Next
Business appears to be the next step in that outreach.
“We have been told Saudi is trying to ‘de-Americanize’ and they want to embrace Chinese technology,” said Nuo Shi, senior investment manager at the Hong Kong-based North Beta International Asset Management Limited. “They won’t be able to pull off the grand vision by themselves and that’s why we’re here.”
China, the world’s second-largest economy, is already the number one buyer of Saudi oil, making it the country’s largest trading partner with transactions worth $116 billion last year.
Nevertheless, the Gulf’s top sovereign wealth funds have traditionally tended to deploy their investments in the US and Europe, where markets are deep and rules transparent.
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Since President Xi Jinping’s landmark visit to the kingdom in December, however, Chinese executives have been emboldened to seek out Gulf investment and a potential role in Vision 2030, MBS’s plan to transform the economy.
Nuo traveled to Riyadh with several colleagues and the heads of seven Chinese tech companies in which her firm has stakes. They planned to ask Saudi Arabia’s sovereign wealth fund to invest in a new $200 million fund and explore the possibility of bringing Chinese tech to the kingdom.
Karim AlWadi, co-founder of Beltway Group which co-invests with Chinese companies in Middle Eastern infrastructure projects, came to persuade Gulf sovereign wealth funds to look for opportunities further east.
“My argument is that US money is pulling out of China for political reasons,” said the Syrian-Russian entrepreneur who has lived in China for 22 years. “Now is the best time for Arab money to get into China because Arabs missed the first stage of the Chinese miracle.”
--With assistance from Matthew Martin.
(Updates with crown prince’s visit to France.)
