File photo: Xi Jinping and King Salman Bin Abdul Aziz Al Saud shake hands during a signing ceremony at the Great Hall of the People in Beijing, China. Image Credit: Reuters

Jeddah: Saudi Arabia and China plan to establish and operate jointly a $20 billion (Dh73.4 billion) investment fund, sharing costs and profits on a 50:50 basis, Saudi Energy Minister Khalid Al Falih said on Thursday.

Al Falih was speaking on the sidelines of an economic conference of senior officials and businessmen from the two countries.

He said that in addition to the fund, he expected 11 business agreements worth about $20 billion to be signed between the two sides on Thursday. He did not give details.

In March, Saudi Arabian Oil Co. announced that it may deepen investment in China’s oil industry as part of $65 billion (Dh238.7 billion) worth of potential deals signed between the two countries in everything from energy to manufacturing and a theme park. 

Saudi Aramco, as the company is known, is already a partner in refineries and petrochemical plants in the country. 

Foreign investments

Saudi Arabia is courting foreign investors as it seeks to diversify its economy and gears up for what may be the largest-ever initial public offering. 

The country plans to float a 5 per cent stake in Aramco.

Saudi Arabia also needs new markets and economic partners to help the country with its economic transformation from its dependence on oil, and China is a perfect target as a major economy with huge demands.

Total trade between China and Saudi Arabia more than doubled to $54 billion dollars between 2006 and 2015, according to IMF data.