China’s Xi Jinping promises security, energy cooperation at Saudi summits

The discussions came one day after bilateral sit-downs with Saudi royals yielded a joint statement stressing “the importance of stability” in oil markets - a point of friction with the United States. Washington has urged the Saudis to raise production.

“China will continue to firmly support the GCC countries in maintaining their own security... and build a collective security framework for the Gulf,” Xi said at the China-GCC summit.

“China will continue to import large quantities of crude oil from GCC countries on an ongoing basis,” he said, also vowing to expand other areas of energy cooperation including liquefied natural gas imports.

Oil from Saudi Arabia alone accounted for 17 per cent of China’s imports last year, and last month Qatar announced a 27-year natural gas deal with China.

Earlier on Friday, a joint Chinese-Saudi statement spoke of “focusing on emissions rather than sources” in tackling climate change, the approach championed by the resource-rich Gulf countries.

Crown Prince Mohammad bin Salman addressed both summits on Friday, promising “continuing Arab-Chinese cooperation to serve our common goals and aspirations of our peoples”.

Before the meeting with Xi, representatives of the Gulf Cooperation Council met in a summit chaired by Saudi Crown Prince Mohammad bin Salman.

Prince Mohammed made a point in his opening remarks, aired on state television, to applaud Qatar for its hosting of the World Cup.

Sheikh Hamad bin Mohammad Al Sharqi, Supreme Council Member and Ruler of Fujairah, is leading the UAE’s delegation participating in the 43rd Gulf Cooperation Council Summit. He also participated in the Riyadh Gulf-China Summit for Cooperation and Development and the Riyadh Arab-China Summit for Cooperation and Development.

The GCC includes Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates. Xi and King Salman also agreed to hold meetings between the two countries’ leaders every two years, the state-run Xinhua news agency reported.

On Thursday, he met with King Salman and Saudi Arabia’s Crown Prince Mohammad bin Salman, announcing deals on everything from hydrogen energy to housing, although few details were released.

In a lengthy joint statement on Friday, Beijing and Riyadh pledged to enhance cooperation and stressed principles of sovereignty and “non-interference”, while affirming the importance of a peaceful solution to the Ukraine conflict.

Oil giant Saudi Arabia is a top supplier to China and the joint statement reaffirmed the importance of global market stability and energy collaboration, while striving to boost non-oil trade and enhance cooperation in peaceful nuclear power.

“The two sides reaffirmed that they will continue to firmly support each other’s core interests.” In a nod to Gulf security concerns over Iran, another oil supplier to China and with whom Beijing has good ties, they agreed the need to “strengthen joint cooperation to ensure the peaceful nature of Iran’s nuclear programme” and for Tehran to respect “principles of good-neighbourliness”.

Riyadh voiced support for Beijing’s “One China” policy on the issue of Taiwan. Xi invited King Salman to visit China, Saudi state television reported.

Bilateral meetings

Qatar’s emir, Kuwait’s crown prince and the presidents of Egypt, Tunisia, Djibouti, Somalia and Mauritania are among rulers attending alongside leaders and prime ministers of Iraq, Morocco, Algeria, Sudan and Lebanon.

Ahead of the summits, Xi held bilateral talks with Kuwait Crown Prince Sheikh Meshal Al Sabah, Egyptian President Abdul Fattah Al Sisi, Iraqi Prime Minister Shia Al Sudani, Sudanese leader General Abdul Fattah Al Burhan and Palestinian President Mahmoud Abbas.

Diplomats said the Chinese delegation would sign agreements and memoranda of understanding with several states in addition to Saudi Arabia, which inked an MOU with Huawei on cloud computing and building high-tech complexes in Saudi cities.

The Chinese tech giant has participated in building 5G networks in most Gulf states.

Friday’s agenda was expected to include a summit with the six-member Gulf Cooperation Council as well as a broader China-Arab summit.

“China looks forward to working with Saudi Arabia and Arab countries to make the two summits milestone events in the history of China-Arab relations and China-GCC relations,” Xi said on Thursday in remarks carried by Chinese state broadcaster CCTV.

The Gulf countries, strategic partners of Washington, are bolstering ties with China as part of an eastward turn that involves diversifying their fossil fuel-reliant economies.

Meanwhile China is trying to widen its sphere of influence, notably through its Belt and Road Initiative, in which it is providing funding for infrastructure projects around the world.

‘Prestige’ trade deals

Officials have provided few details about Friday’s agenda, but one potential area of focus is a China-GCC free trade agreement that has been under discussion for nearly two decades.

“China will want to draw the lengthy negotiations to a close, as FTAs with major trading blocs is a matter of prestige for Beijing,” said Robert Mogielnicki of the Arab Gulf States Institute in Washington.

“It’s not as simple for the GCC states, which seem to be more invested in advancing bilateral ties and are engaged in varying degrees of regional economic competition with their neighbouring member states.”

A breakthrough on the trade deal could help Saudi Arabia, the world’s biggest oil exporter and the Middle East’s biggest economy, diversify its economy in line with the Vision 2030 reform agenda championed by Crown Prince Mohamma.

Saudi state media have said that bilateral deals worth about $30 billion were expected to be signed during the visit.

China, Saudi Arabia affirm importance of stable global oil markets

China and Saudi Arabia reaffirmed the significance of global oil market stability and Riyadh's role in maintaining it, a joint statement said on Friday during Jinping's visit to the kingdom, the world's biggest oil exporter.

OPEC+ heavyweight Saudi Arabia is the top supplier for China, the world's biggest energy consumer, and the two sides had pledged in bilateral talks on Thursday greater trade and economic cooperation as they move to deepen relations.

The OPEC+ oil producers alliance that includes Russia kept output unchanged at its last meeting on Dec. 4 as markets struggle to assess the impact of a G7 price cap on Russian oil and a slowing Chinese economy.

"The People's Republic of China welcomed the Kingdom's role as a supporter of the balance and stability in the world oil markets, and as a reliable major exporter of crude oil to China," the joint statement carried on Saudi state media said.

Exploring opportunities

It said the two sides would explore common investment opportunities in petrochemicals and enhance cooperation in renewable energy, including nuclear, and develop projects for energy supply chains, efficiency and advanced technology.

Saudi Aramco (222.SE) and China's Shandong Energy signed a memorandum of understanding that included a potential crude supply agreement and chemicals products offtake deal, Aramco said on Friday.

It added that the two firms were exploring collaboration on integrated refining and petrochemicals in China.

When Xi first arrived in the kingdom, Saudi Arabia's energy minister said Riyadh and Beijing would seek to boost cooperation in energy supply chains by establishing a regional centre in the Gulf state for Chinese factories.

Friday's joint statement touched on enhancing the kingdom's location as a regional centre for Chinese firms in producing and exporting energy sector products. It also raised the prospect of joint investment in energy projects in the region and "energy consuming countries in Europe and Africa".

Crown Prince Mohammad bin Salman has launched an ambitious economic development programme that includes building local capabilities across various sectors and creating new industries to reduce reliance on oil revenues.