Saudi Arabia invites China’s Xi to form energy partnerships


*Mohammed bin Salman with Xi Jinping

London — Two months after snubbing U.S. President Joe Biden’s pleas for oil, Saudi Arabia is rolling out the red carpet for his Chinese counterpart, Xi Jinping.

Xi will visit Saudi Arabia from Dec. 7-9, when he will take part in a regional summit with Saudi Crown Prince Mohammed bin Salman and other Arab leaders, the kingdom’s SPA state news agency said Tuesday, promising agreements worth some $30 billion. Energy and infrastructure deals will top the agenda, according to two people briefed on the plans.

China has yet to confirm: Foreign Ministry spokeswoman Mao Ning said at a regular press briefing in Beijing that she had no information about the trip.

While Xi has own problems that might explain any potential no-show, having faced recent protests against his Covid Zero policy and the death of former leader Jiang Zemin, Saudi expectations are of a summit that will showcase the Gulf’s deepening ties with Beijing. That fact alone underlines just how far US-Saudi relations have sunk.

“This visit is the culmination or crowning of a deep strengthening in relations over the last few years,” said Ali Shihabi, a Saudi commentator and advisory board member for the kingdom’s Neom megaproject. “The U.S. is concerned about this but cannot slow this already strong relationship down.”

A low point in U.S.-Saudi ties came in October when Biden accused Riyadh of allying with Russia on oil production cuts and vowed “consequences.” However, relations have been fraying for some time as the U.S. shifts its global focus to the competition with China.

It’s a decade since the U.S. was Riyadh’s biggest trading partner, and in that time not only has China leapfrogged America, but so too have India and Japan. Total U.S.-Saudi trade shrank from some $76 billion in 2012 to $29 billion last year.

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That’s in part because the U.S. shale industry means it no longer imports much Middle-Eastern oil; China is Saudi Arabia’s top crude customer now — and regional oil exporters will be keen for information on China’s plans for lifting Covid restrictions.

Yet Washington has also riled Saudis with its attempts — now all but dead — to return to the nuclear deal with Iran, a regional Saudi rival, while Riyadh’s powerful alliance with Russia and other oil exporters in OPEC+ is another point of friction.

“It’s high time we stopped seeing this as being purely about economic and commercial relations,” said Cinzia Bianco, a visiting fellow at the European Council on Foreign Relations, who focuses on the Gulf. “For the Arab states, it’s about alternatives, in all possible ways.”

In the past six months, Janes IntelTrak Belt & Road Monitor reported a surge of activity across the Middle East by U.S.-blacklisted telecoms firm Huawei Technologies Co.; that State Grid Corporation of China was looking at investment opportunities in regional electricity transmission and distribution; and Saudi Arabia and China agreed to coordinate their investments in Belt and Road Initiative participating nations.

Talks on a free trade agreement between China and the six-nation Gulf Cooperation Council are entering a “final stage,” China’s ambassador to the United Arab Emirates Zhang Mingyi said last month. Zhang even mentioned a memorandum on moon exploration signed with the UAE.

*Ben Bartenstein and Sylvia Westall, Bloomberg – Bloomberg



This article was originally posted at sweetcrudereports.com

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