Initial agreements worth $29.26bn will be signed during a Saudi-Chinese summit this week, official Saudi agency said.
Chinese President Xi Jinping will make a three-day visit to Saudi Arabia this week, meeting the king and de facto ruler of the world’s biggest oil exporter.
The Chinese leader will arrive on Wednesday for only his third trip abroad since the coronavirus pandemic began and his first to Saudi Arabia since 2016.
The visit came upon an invitation from Saudi King Salman “to bolster historic ties and strategic partnership between the two countries”, said the official Saudi Press Agency (SPA) on Tuesday.
Initial agreements worth $29.26bn (more than 110 billion Saudi riyals) will be signed during a Saudi-Chinese summit this week, SPA said.
Xi, head of the world’s number-two economy, will also attend a summit with rulers from the talks with leaders from elsewhere in the Middle East, strengthening China’s growing ties with the region.
Xi will also attend a Gulf-China summit for cooperation and development and an Arab-China meeting with the participation of the leaders of the six-member Gulf Cooperation Council (GCC), including Saudi Arabia, United Arab Emirates, Qatar, Bahrain, Kuwait, and Oman.
The bilateral summit, chaired by King Salman and attended by Crown Prince Mohammed bin Salman (MBS), the kingdom’s de facto ruler, comes after Xi secured a historic third term in November.
Xi’s visit reflects “much deeper relations developed in recent years” between the two countries, said Ali Shihabi, a Saudi analyst close to the government.
“As the largest importer of Saudi oil, China is a critically important partner and military relations have been developing strongly,” he said, adding that he expected “a number of agreements to be signed”.
The visit also coincides with heightened tensions between Saudi Arabia and the United States over issues ranging from energy policy to regional security and human rights.
The latest blow to that decades-old partnership came in October when the OPEC+ oil bloc agreed to cut production by two million barrels a day, a move the White House said amounted to “aligning with Russia” on the war in Ukraine.
On Sunday, OPEC+ opted to keep those cuts in place.
Shihabi said the timing was “a coincidence and not directed at the US”.
In from the cold
China sees Saudi Arabia as its key ally in the Middle East due not only to its importance as an oil supplier but also a shared suspicion of Western interference, especially on issues such as human rights.
Foreign Minister Wang Yi said in October that Saudi Arabia was a “priority” in China’s overall and regional diplomatic strategy.
China buys roughly a quarter of Saudi oil exports.
The oil market was thrown into turmoil with Russia’s invasion of Ukraine in February.
The G7 and European Union on Friday agreed on a $60-per-barrel price cap on Russian oil in an attempt to deny the Kremlin revenues to keep up the war, stoking further uncertainty.
“Oil will probably be higher up the agenda than it was when Biden visited,” said Torbjorn Soltvedt of the risk intelligence firm Verisk Maplecroft.
“These are the two most important players in the oil market – Saudi on the supply side, and then China on the demand side.”
There is potential for the two sides to ramp up cooperation in developing infrastructure like refineries.
Beyond energy, analysts have said leaders from the two countries are expected to discuss potential deals that could see Chinese firms become more deeply involved in mega-projects that are central to the crown prince’s vision of diversifying the Saudi economy away from oil.
Those projects include a futuristic $500bn megacity known as NEOM, a so-called “cognitive” city that will depend heavily on facial recognition and surveillance technology.