Riyadh and Beijing spur global economic growth

Saudi Arabia and the People’s Republic of China enjoy a comprehensive and in-depth development of bilateral relations and fruitful economic cooperation, especially in the fields of trade, energy and infrastructure.
The strong relationship is moving forward steadily since the diplomatic ties were established in 1990.
A major diplomatic visit between the Kingdom and China was made in 1999, when Chinese President Jiang Zemin visited Riyadh, which resulted in the mutual signing of the 1999 strategic oil cooperation agreement.
It paved the way for China to open its oil refinery sector to Saudi Arabia if the Kingdom allows for exploration and development opportunities for Chinese investors.
Sino-Saudi diplomatic and economic relations grew closer in the year 2000. Their bilateral trade showed significant expansion.
In 2004, the two countries initiated a series of regular political meetings and in the same year Sinopec, China’s state-run oil company, signed an agreement to explore gas in the Empty Quarter (Rub’al Khali) in Saudi Arabia.
In 2005 alone, trade increased 59 percent, allowing Saudi Arabia to overtake Angola as China’s largest source of oil for the first time. Now oil is the backbone of the relationship.
In January 2006, Custodian of the Two Holy Mosques King Abdullah became the first Saudi head of state to visit China.
He signed five major agreements on energy cooperation during his visit, which was also used as a way to discuss broader economic trade, taxation and technical accords, a vocational training agreement, as well as to finalize an urban development loan for the Saudi Arabian Development Bank in China’s Xinjiang province.
Chinese President Hu Jintao hoped that this bilateral cooperation would “write a new chapter of friendly cooperation between China and Saudi Arabia in the new century.”
The high-profile visit was reciprocated by President Hu Jintao on April 22 in the same year.
The president became only the second foreign leader in history who was granted permission to address Saudi legislative council.
The two leaders were instrumental in signing several agreements regarding further energy exploration and security collaboration.
King Abdullah adopted a pro-Asian Look East trade policy, with more than half of Saudi oil going to Asia.
Saudi Basic Industries Corporation (SABIC) alone exports products such as petrochemicals worth over $2 billion to China on an annual basis.
Consequently, the value of Sino-Saudi bilateral trade rose to €32,500,000,000 in 2008, making Saudi Arabia China’s largest trading partner in Western Asia.
In the first quarter of 2010, Saudi oil export to China reached more than 1 million barrels, exceeding exports to the US.
The Kingdom is expected to remain China’s largest supplier of crude oil in the world and the largest trading partner in West Asia and Africa.
With the huge increase in Sino-Saudi trade, Saudi Arabia has emerged as a significant investor in China as the Kingdom is eager to invest in Chinese oil industry-related projects as a way to secure their status as a major oil provider to the China.
In 2004, Saudi Arabia’s Saudi Aramco Overseas Company invested nearly one-third of the $3 billion in funds needed for the construction of a petrochemical facility in China’s southeastern province of Fujian, which is planned to process 8 million tons of Saudi crude oil.
In 2006, the two countries agreed to jointly construct an oil storage facility on China’s Hainan Island and the Kingdom invited Chinese firms to participate in infrastructure development worth $624 billion.
On April 6, 2012, SABIC announced a new investment plan of $100 million to set up a new technology center in the Kangqiao area of Shanghai.
It was not only oil related companies that ventured into their bilateral relationship cementing the ties further, but major Saudi companies such as the Saudi Arabian General Investment Authority (SAGIA) and Saudi Arabian Airlines also established offices in China by that time.
In 2006, Saudi Arabia invested $1.1 billion in China, the first significant investment since 2000. In 2009, China Railway Company won a $1.8 billion bid to build a monorail in Makkah as a way to help transport pilgrims.
China Railway Construction Corporation Ltd. undertook the Al-Mashaaer Al-Mugadassah metro project Southern Line and completed its work.
The volume of trade exchange between Saudi Arabia and China soared to $73.4 billion.
China imported more than 50 million tons of crude oil from the Kingdom in 2012, and 27 million tons of oil imported in the first half of the current year and the volume of trade between the two countries reached $36.2 billion.
So far as the level of practical cooperation and bilateral relations are concerned, there are more than 140 Chinese companies operating in the Kingdom in the fields of construction, telecommunications, infrastructure, petrochemicals and others, as well as increasing mutual investment between the two countries, which clearly contributes in the economic boom for the two countries.
Cultural cooperation and people-to-people exchanges between the two countries progressed smoothly.
Saudi Arabia took an active part in the Shanghai World Expo spending $150 million on its pavilion.
The Saudi Pavilion was one of the most popular pavilions during the expo and received more than 4 million visitors.
As friends, China and the Kingdom have always been exchanging visits.
In recent years, there have been hallmarks of their increasing friendship through the Kingdom’s participation in the Olympic Games in Beijing, and the generous assistance by King Abdullah to the region affected by earthquakes in Wenchuan County, Sichuan Province, China in 2008.
Moreover, around 15,000 Chinese Muslims make pilgrimages to Saudi Arabia every year.
There are tremendous investment opportunities for both countries to work on further cooperation, especially in the areas of technology transfer and renewable energy, medical technology and certain other segments.
The Kingdom is looking forward to register further growth and China marching ahead with full confidence building a moderately prosperous society in a most comprehensive way.
Their economies have been providing a new impetus to the global financial system.