China can play important role in Saudi Arabia's economic diversification

The relationship between China and Arab states dates back to antiquity. More than two thousand years ago, land and maritime Silk Roads connected the two ancient civilizations and fastened them in affinity. The discovery of the primitive port of Jeddah in 2018 during a 20-day Chinese-Saudi joint excavating mission of the ruins of al-Serrian established these historical interactions.

Since the unveiling of Saudi Vision 2030, Beijing has expressed a willingness to help Riyadh chart a new path of economic diversification and synergize the Belt and Road Initiative (BRI), which the Kingdom has already signed up for. The Saudis' strategic framework aims to reduce dependence on oil and transform the Kingdom into a leading industrial powerhouse and global trading and logistics hub.

Mutual interests, the complementary nature of these initiatives and mercurial regional strategic landscape over the last few years have led to expansion in the Saudi-China relationship. The internally conflicted US policy, to limit American engagement in the Middle East and bully the regional allies to choose between Beijing and Washington, has dismayed Saudi Arabia, urging it to benefit from China's growth, enormous market and investment capability.

Riyadh is positioned at the nexus of the East and West, raising the profile to become an epicenter of international trade. This ambitious goal, given building a regionally competitive and sustainable maritime industry is one of the key Saudi objectives, comfortably meshes with China's ocean-going 21st Century Maritime Silk Road and seeks broad-based cooperation with the world's second-largest economy.

In December, King Abdulaziz Port in Dammam was included in the newly launched China Service to ensure direct and efficient connectivity for importers and exporters in the country and region with China. The initiative, aimed at enhancing competitiveness of the port and increasing trade between the two countries, will inevitably shore up maritime links and further build nation-to-nation relations.

Chinese and Saudi firms recently signed a memorandum of understanding (MOU) in innovative space technologies, satellites, artificial intelligence (AI) and geospatial products that would support Saudi strategic space and geospatial industry, and marks a major step forward to realize the country's futuristic ambitions.

Cooperation between China and Saudi Arabia continues to strengthen as Saudi state-owned oil company, Aramco, took the "final investment decision" to develop a refinery and petrochemical complex in Northeast China. The vision to create a modern economy and shared challenge of energy security made Beijing the bedrock of the oil conglomerate's downstream expansion strategy in Asia and turn it into a leader in the global liquid-to-chemical industry.

The deal – which is subject to regulatory approvals and will combine 300,000 barrels per day refinery capacity and ethylene-based steam cracker, a building block petrochemical used to manufacture thousands of everyday products – is the latest example of China-Saudi strategic cooperation. The negotiations, reportedly resumed in February, underscored the Kingdom's "extremely significant shift" from the US to China and described Riyadh's proclivity to better align itself in a fast-changing geopolitical reconfiguration.

In yet another sign of broadening strategic relations, the Saudi Digital Academy last month signed an MOU with Huawei. The consent is intended to sponsor and develop 8,000 local technology talents and will contribute to Riyadh's digital transformation under the Vision. The Chinese tech giant would also coach 100 Saudi trainers on crucial technologies including AI, cloud computing, cybersecurity and 5G uses to provide the Kingdom with future tech leaders.

Riyadh was Beijing's top crude oil supplier in 2021. After replacing the European Union as the largest trading partner of the Gulf Cooperation Council in 2020, China is playing an important role in the development of Saudi and the region's non-oil sector too, such as tourism, telecommunications, smart cities and renewables, among other technology-driven industries. The burgeoning trade as well as a strong compatibility in other sectors has augmented the bloc's general perception about Beijing and eminence as a top strategic ally, paving the way for enhanced engagement.

Over the years, China and Saudi Arabia have steadily matured their trade relationship into intimate friendly collaboration and comprehensive strategic partnership. It is, however, critical not to pair the evolution of bilateral cooperation, based on reciprocity and mutual understanding, with either country's dealings with the US and other states. Such a balanced and pragmatic approach would accelerate each other's growth ambitions and open up new vistas for economic diversification.

Azhar Azam works in a private organization as "Market & Business Analyst" and writes on geopolitical issues and regional conflicts.

The opinions expressed here are those of the writer and do not necessarily represent the views of China Daily and China Daily website.

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