Xi Jinping’s Growing Bonhomie with Saudi Arabia: Implications
Prof Rajaram Panda

There is a geopolitical reset centring in the Middle East where the US influence seems to have waned while China’s clout shows sign of growing. This assertion is backed by the development when the Chinese President Xi Jinping after securing an unprecedented third term at the 20th Party Congress in October 2022 visited Saudi Arabia from 7 to 10 December much to the discomfort of Washington, Saudi Arabia’s main security provider. If one compares the manner US President Joe Biden was received when he had visited Riyadh in July 2022 with the way Xi was received, one cannot miss the marked change of priority in Riyadh’s foreign policy outlook.

The invitation to Xi was sent by King Salman bin Abdulaziz Al Saud, King of the Kingdom of Saudi Arabia, within the framework of strengthening strategic relations between the Kingdom of Saudi Arabia and the People’s Republic of China (PRC).

Of late Beijing has shown increased interest in the Middle Eastern affairs and there are reasons behind this. Even the body language of Xi Jinping’s meeting with the United Arab Emirates President Sheikh Mohammed bin Zayed Al Nahyan at the opening of the G-20 summit in Nusa Dua, Bali on 15 November 2022 speaks a lot of Beijing’s growing interests in the Middle East. Indeed, over the past few years, China had made sincere efforts to deepen engagement with the Gulf States and has invested heavily in many infrastructure projects. By visiting Saudi Arabia and having a summit with Riyadh’s strong man, Xi now proves that he is keen to expand Beijing’s footprint in the region. The significance of Xi’s visit to Riyadh may be understood in perspective and against the backdrop of strained US-Saudi Arabia relations over energy supplies that coincide with China’s growing influence in the Middle East.[1]

Even when Saudi Arabia’s decades-long relationship with the US continues to crumble, its alliance with China signals a potential shift in the global order. The US ties with China is already frosty and increasingly growing chilly. China by partnering with Riyadh following a summit with Crown Prince Mohammed bin Salman, Saudi Arabia’s de facto leader, and signing a host of agreements focussing on trade, oil, technology, infrastructure and security, the US discomfort could be easily discernible. The important aspect of the agreements also contained a rider that the two nations would not interfere with each other’s domestic affairs.

In the joint statement issued at the conclusion of the summit, both sides reaffirmed that they will continue to “firmly support each other’s core interests, support each other in maintaining their sovereignty and territorial integrity and exert joint efforts to defend the principle of non-interference in the internal affairs of states, rules of international law and basic principles of international relations”.[2] Saudi Arabia also reaffirmed the one-China principle.

One principal reason for the deterioration of Saudi Arabia’s relations with the US was the latter’s criticism of human rights violations. The US also criticised China’s treatment of pro-democracy activists in Hong Kong and Muslim minorities in the Xinjiang region. These two reasons contributed to both China and Saudi Arabia seeing common ground and this was one factor that brought the two closer.

What Went Wrong in the US-Saudi Arabia Relationship?

The US-Saudi alliance had gained strength during the reigns of seven Saudi monarchs and 15 US Presidents. This dramatically nosedived during Joe Biden’s presidency because of his criticism of the Kingdom and announcement of making the oil-rich Gulf nation a pariah for the murder of Saudi dissident journalist Jamal Khashoggi in 2018 and the Kingdom’s role in the punishing Yemeni civil war in which an estimated 15,000 Yemini civilians were killed. This political factor spilled over to the issue of Saudi oil production as sanctions on Russian energy help drive up fuel prices around the world. Thus the renewed vigour in building a robust relationship between Beijing and Riyadh heralds a shift in the global geopolitical order, away from the US.[3]

The Kingdom’s most powerful Crown Prince, commonly known by the acronym MBS, is no stranger to China. He had met Xi in Beijing 2022 Winter Olympics. Both countries have autocratic leadership, seriously repress dissent and are keen to diversify in order to maintain economic growth with ambitious infrastructure projects.

Because of their mutual economic interests, cementing a strategic partnership was easy. China is Saudi Arabia’s largest trading partner. Though China enjoys an unfavourable balance of trade with Saudi Arabia, with China’s exports to Saudi Arabia totalling $30.3 billion as against its imports of $57 billions, thereby putting its trade in the deficit, for China the composition of trade is more important consideration. Saudi oil makes up 18 per cent of Beijing’s total crude oil import. Between January and October 2022, oil imports only accounted for $55 billion in the total bilateral trade Moreover, there is a strategic angle in Beijing’s relations with the Gulf country.

Riyadh is no longer interested in relying on oil money only and wants to diversify its economic activities, for which it needs money. So far, Riyadh has mostly relied on oil money and therefore wants to regulate production keeping in mind the global oil crisis and also to keep to prices of crude high. This was the major reason for the US-Saudi Arabia friction. Such policy choices as Saudi Arabia embarks to diversify its economy with ambitious infrastructure projects, China with its Belt and Road Initiative (BRI) wants to create a 21st century Silk Road international trade route by providing the finances to develop series of ports, pipelines, railways, bridges, and other trade infrastructure to nations across Asia and Africa. China is unconcerned with the criticism for potentially exploiting poor nations by providing loans on concessions terms, which they find tough to refuse but later find difficult to repay, thereby creating a debt trap, ending with China taking over control over those critical hubs. In the global power competition, China thus seizes the opportunity to entice those small states not to align with the US by creating a debt trap for those nations and thus consolidates its control over them. Beijing has successfully used the same strategy compelling some African states and small island states in the South Pacific to switch alliance from Taiwan to China.

Another consideration by Saudi Arabia is that it is now suspicious about the US as a reliable weapons supplier after ties were strained under Biden and it now started seeing China as a viable alternative. In the new situation, as China-Saudi Arabia ties get a boost while ties between the US-Saudi Arabia continue to deteriorate. This adversely impacts the US’ historic position as a leader to maintain an international order. When Saudi Arabia refused to condemn Russia’s military operation of Ukraine in favour of its own economic needs, it was another friction point. When Saudi Arabia and other OPEC+ countries joined Russia to continue a limited production scale, Biden interpreted the move as tacit support for Russia

There is yet another geopolitical twist to this growing US-Saudi partnership. China has been urging the Gulf nations to accept its currency Yuan for its oil imports and not US dollars. So far that has not happened but if Beijing succeeds, it could have economic consequences for the US and devalue the dollar, thereby erode dollar’s standing in the international financial system. For now, there is nothing serious to worry about as a single alliance may not mean the end of the US hegemony in maintaining the global order. It could be a matter of worry if the China-Saudi Arabia ties solidify a major repositioning of the global order. It is premature to draw any conclusive picture of what unfolds in the coming years. It is certain however that surge in China’s power is unstoppable.

Impact on India

Though it would be difficult to discern if there is any immediate impact of Xi’s visit to Saudi Arabia on India’s Middle East policy, there is no denying the fact that India needs to be watchful of China’s intentions and what would transpire in the coming years. After all, India is Saudi Arabia’s second biggest buyer of oil only behind China.

As China grows closer to Middle-Eastern nations, it will be able to wield greater influence on these countries. But what would be more worrying for India is from the security perspective as Beijing has already established its first overseas military base in Djibouti in 2017, just across Arabia. This makes China a player in the Red Sea and the Western Indian Ocean. Given the adversarial relations of China with India, China’s increasing bonhomie with Saudi Arabia could be a matter of concern for India. By engaging with more civil projects with Saudi Arabia and other Middle Eastern countries on economic projects, China may be shrewdly spreading its influence in this region.[4]

With this acquisition of Chinese access to Middle Eastern resources, Beijing has clearly expanded its influence in the region. From the perspective of the Middle Eastern countries, China has grown in stature as not only a reliable partner and lucrative economic and trade partner but also a potential regional balancer and security provider. Seen differently, Xi’s Saudi Arabia visit meant that he has presented a serious challenge to the US.

Endnotes :

[1] “What’s behind China’s growing interest in the Middle East?”, 8 December 2022, https://www.aljazeera.com/podcasts/2022/12/8/whats-behind-chinas-growing-interest-in-the-middle-east
[2] “Joint Statement at the Conclusion of the Saudi-Chinese Summit”, 9 December 2022, https://www.spa.gov.sa/2407997
[3] Ellen Loanes, “China’s alliance with Saudi Arabia signals a potential shift in the global order”, 10 December 2022, https://www.vox.com/2022/12/10/23502903/china-saudi-arabia-united-states-relations-strain
[4] “A New World Order? What Xi Jinping’s visit to Saudi Arabia means for India and the world”, 6 December 2022, https://www.firstpost.com/explainers/a-new-world-order-china-xi-jinping-visit-to-saudi-arabia-means-for-the-world-and-india-11760581.html

(The paper is the author’s individual scholastic articulation. The author certifies that the article/paper is original in content, unpublished and it has not been submitted for publication/web upload elsewhere, and that the facts and figures quoted are duly referenced, as needed, and are believed to be correct). (The paper does not necessarily represent the organisational stance... More >>

Image Source: https://timesofislamabad.com/digital_images/large/2018-12-02/xi-jinping-backs-economic-diversification-social-reform-in-saudi-arabia-1543735883-5872.jpg

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