Analysts say Beijing can significantly help with kingdom’s economic growth
Photo taken on July 12, 2022 shows the Mecca light rail operated in the Hajj season in Mecca, Saudi Arabia. (HAN XIAOLIN / CRCC / HANDOUT VIA XINHUA)
China is set to play a key role in Saudi Arabia’s quest to attract quality investments for its economic diversification, analysts say.
Apart from being Saudi Arabia’s biggest trading partner, China can offer its technical and technological capacities, which will contribute greatly to Riyadh’s industrial powerhouse ambitions and supply chain infrastructure, they said.
“When we look at the relations between China and Saudi Arabia, we see that both countries have entered a new era in this period,” said Gokhan Ereli, Gulf Studies coordinator at the Center for Middle Eastern Studies in Turkiye.
Ereli cited Xi Jinping’s election as general secretary of the Communist Party of China Central Committee on Oct 23 and Saudi Arabian King Salman bin Abdulaziz Al Saud’s appointment of his son Crown Prince Mohammed bin Salman as Saudi Arabia’s prime minister in September.
Ereli said one of the “shared agenda items of both leaders” is the sustainability of economic development, and having a thriving economy is one of the key goals of Saudi Arabia’s policy of economic diversification.
“China will be crucial in this regard for Saudi Arabia since China and Saudi Arabia both see their key goals for the future as growing and building commercial partnerships in a fully integrated manner with the global economic system,” Ereli told China Daily.
During his meeting with the press on Oct 23, Xi pledged to be steadfast in China’s deepening reform and opening-up across the board and in pursuing high-quality development.
“Just as China cannot develop in isolation from the world, the world needs China for its development,” Xi said.
This month, Saudi Arabian Crown Prince launched the National Industry Strategy that aims to turn the kingdom into a leading industrial power with $226 billion in investment opportunities. He highlighted the nation’s potential to achieve a competitive and sustainable industrial economy, including its talented youth, geographic location, natural resources and national pioneer companies.
His launching of the Global Supply Chain Resilience Initiative on Oct 23 is aimed at pushing Saudi Arabia to become a top 15 global economy by 2030.
According to data from CEIC, which curates economic, industry and financial data, Saudi Arabia’s total exports to China reached $5.891 billion in July 2022, compared with $5.567 billion the previous month.
The figure hit an all-time high of $6.558 billion in March this year and a record low of $1.732 billion in March 2020 in the wake of the COVID-19 pandemic’s outbreak.
Mohammad Salami, an associate researcher at the International Institute for Global Strategic Analysis in Pakistan, said the Saudi government’s industrial powerhouse initiatives are based on three strong pillars of industry: oil and gas, petrochemicals and plastics, and extraction of metals and minerals.
“In this way, oil and petrochemical industries will play the biggest role in Saudi Arabia’s industrialization process, despite pressures to reduce its production due to its role in global warming,” said Salami.
“Riyadh needs the investment and technical assistance of foreign countries such as China in the oil and gas industries due to the low-skilled domestic workforce and the need for high tech,” he added.
According to Saudi Arabia’s General Authority for Statistics, the non-oil sector expanded by 8.2 percent in the second quarter of this year, exceeding the agency’s initial estimate of 5.4 percent.
“Saudi Arabia is preparing for the post-oil ecosystem,” said Deniz Istikbal, an economic researcher at the Foundation for Political, Economic and Social Research, a policy think-tank based in Ankara, Turkiye.
“The technology capacity of China is also among the needs of the Saudis. As a result, China can contribute greatly to Saudi Arabia’s economic transformation. Both parties will benefit from this transformation politically, economically and socially.”
Xinhua contributed to this report.
