Riyadh summits cap decades of active engagement with China
Over the next few days, Saudi Arabia will host four important gatherings. In addition to the annual GCC summit of heads of state and government, there will be three others — a Saudi-China summit, a GCC-China summit and an Arab-China summit. The GCC-China and Arab-China leaders’ meetings are being held for the first time, reflecting China’s growing interest in the region.
Hosting the summits in Saudi Arabia reinforces Riyadh’s leadership of regional strategic partnerships. Since 2015, the year King Salman ascended the Saudi throne, Saudi Arabia has hosted several such gatherings of heads of state. The latest were the three summits held in Jeddah in July involving the US.
Chinese President Xi Jinping’s official visit to Saudi Arabia this week is not his first visit to the Kingdom and Saudi leaders have also visited China before. However, the regional summits are a first.
The Saudi-China summit will undoubtedly seek to cement the two countries’ growing partnership and expand the scope of their cooperation. China is Saudi Arabia’s top trading partner and Saudi Arabia is China’s top energy supplier, but the two sides aim to grow this relationship further to include greater investment flows in both directions.
Saudi Arabia’s National Investment Strategy of 2021 and National Industrial Strategy of 2022 both stress economic diversification and growing the manufacturing sector. Saudi Vision 2030 seeks to increase non-oil exports and lead efforts to reduce oil dependency. Those goals can benefit from partnering with China.
Growing China’s engagement with the region revives ancient ties and reshapes them for the modern world. Links between China and the Arabian Peninsula, as well as the Arab region in general, go back to at least the seventh century. There was active maritime trade between the two regions and the Arab world figured prominently in the development of the ancient Silk Road on land.
Reliable historical references document visits by Chinese travelers to the Arabian Peninsula starting in 650 A.D., while dozens of official Arab envoys visited China during the eighth century, establishing diplomatic, trade and cultural relations that lasted for centuries. The great traveler Ibn Battuta lived and worked in China for some time and chronicled his life there in his great book.
The Riyadh Summit for GCC-China Cooperation and Development, as the meeting is officially called, also seeks to build on old and modern ties. It comes after nearly two decades of at times active engagement between the organization and China. In 2004, the GCC and China signed a framework agreement in Beijing on economic, investment and technical cooperation, which set the stage for talks on economic and energy cooperation.
In 2010, also in Beijing, they signed a memorandum of understanding establishing regular strategic dialogues at the level of foreign ministers and senior officials, followed by separate memorandums with specialized GCC agencies.
Over the past two decades, in addition to strengthening bilateral ties with GCC member states, China has paid special attention to the organization.
Since 2014, the two sides have adopted joint action plans in all areas, from political dialogue to economic cooperation and people-to-people exchanges. Those plans are getting more ambitious and detailed, contributing to a steadily growing institutionalization of China’s partnership with the region.
Growing China’s engagement with the region revives ancient ties and reshapes them for the modern world
Dr. Abdel Aziz Aluwaisheg
Top Chinese leaders, ministers and others have been keen on cultivating GCC engagement, making a point of meeting frequently with the organization’s representatives and expressing solid support for its regional role.
GCC-China free trade negotiations started in 2006 but were suspended for several years over differences related to trade in petrochemicals. The talks have resumed in recent years and gained momentum during the months leading up to this week’s summit.
China has already established strategic partnerships with most GCC member states individually and the next step is to similarly upgrade its relationship with the organization and expand the scope of their cooperation beyond trade.
China is the GCC’s top trading partner. Last year, two-way merchandise trade reached $229 billion, accounting for about 20 percent of total GCC trade with the outside world. This is quite remarkable in the pattern of GCC trade over the past 30 years.
In 1992, GCC-China trade amounted to just over $2 billion dollars, or less than 2 percent of total GCC trade that year. Meanwhile, the same year, trade with the GCC’s traditional partners, the EU and US, accounted for about 40 percent. Today, China’s share of GCC trade is about equal to the shares of the EU and US combined.
GCC exports last year to China accounted for $131 billion, or about 20 percent of total GCC exports. Imports from China accounted for the rest, about $98 billion, or 21 percent of the GCC total.
Oil dominates China-GCC trade, with the export of 3.5 million barrels to China daily. Oil represents about 83 percent of GCC exports, but China is also the destination of about 25 percent of all petrochemicals and chemicals produced in the GCC.
Plastics and electric equipment represent about 6 percent of exports. China’s exports to the region are more diversified. Electrical equipment makes up about 36 percent, followed by autos, machinery and spare parts, at about 26 percent of total exports.
Both regions are growing fast. For many years, China led economic growth globally, but this year the GCC region has become the fastest-growing. By the end of 2022, GCC gross domestic product will exceed $2 trillion for the first time. While small compared to China’s $18 trillion, the GCC represents a thriving market.
The complementarity between the GCC and China opens doors for a greater economic partnership, especially if China is able to contribute to the GCC states’ drive for increased investment and the diversification of their economies and exports, particularly growth in manufacturing.
While people-to-people contact between the two is still limited, it is growing fast. Chinese tourists appear to be dramatically flocking to GCC countries. A trade group recently forecast that the number of Chinese tourists traveling to the GCC would rise to 2.9 million in 2022, an 81 percent increase over the 2018 level of 1.6 million travelers, with a significant percentage choosing the region as their preferred holiday destination.
Chinese students studying in GCC countries number just over 600, while GCC students in China are also in the hundreds. Although miniscule compared to the number of GCC and Chinese students enrolled in American and European schools, the trend is toward more student exchanges between the two regions, especially after the expansion in the teaching of Chinese in GCC schools and the improved global ranking of both Chinese and GCC universities.
• Dr. Abdel Aziz Aluwaisheg is the GCC assistant secretary-general for political affairs and negotiation, and a columnist for Arab News. The views expressed in this piece are personal and do not necessarily represent GCC views.