Furthering Development: Economic Partnerships Between Saudi Arabia and China

*By Prof. Alaa Alghamdi

The 10th Arab-China Business Conference, a high-profile event aimed at strengthening economic and trade cooperation between the Arab world and China, recently came to a close in Riyadh. The conference was marked by the release of the Riyadh Declaration, a joint statement of intent signed by the ministers of investment from 20 Arab countries and China.

The declaration outlines several key commitments, including a pledge to promote investment and trade flows between the two regions and to collaborate on the development of new areas of cooperation. These new areas include renewable energy, infrastructure, and digital technology. Under the sponsorship of Crown Prince Mohammed bin Salman, the conference was also the site of over $10 billion worth of investment deals between Arab and Chinese companies (not the least of which was a US$5.7 billion deal between Saudi Arabia’s Ministry of Investment and China’s electric vehicle (EV) manufacturer Human Horizons). The deal with Saudi Arabia is a major step for Human Horizons, providing the company a foothold in a large and growing market, and it provides access to Saudi’s Private Investment Fund’s (PIF) financial resources.

These arrangements embody a substantial step forward in developing economic and trade relations between the two regions. Overall, the signing of the Riyadh Declaration and the conclusion of the conference are positive indicators that economic and trade relations between the Arab world and China are on the rise, and the agreements signed at the conference are expected to help boost investment and trade flows between the two regions, while the declaration provides a framework for future cooperation.

Saudi Arabia and China have a long history of economic cooperation, dating back to the early 1970s, but in recent years, this cooperation has deepened significantly as the two countries have sought to diversify their economies and decrease their dependence on oil. In 2016, Saudi Arabia and China signed a $60 billion investment agreement, which includes plans for Chinese companies to invest in Saudi Arabia’s energy, infrastructure, and manufacturing sectors. The two countries have also agreed to cooperate on renewable energy, space exploration, and counterterrorism.

There are several reasons why Saudi Arabia and China seek to deepen their economic partnership. First, both countries are facing challenges to their economic growth. Saudi Arabia is trying to diversify its economy away from its dependence on oil, while China is trying to move up the value chain and become a more innovative and diverse economy. Second, the two countries have complementary strengths; Saudi Arabia has oil and natural resources, while China has capital and technology. Third, the two countries have a shared interest in regional stability from a security and economic standpoint.

There are a number of ways in which Saudi Arabia and China can further develop their economic partnership. First, they can continue to invest in each other’s economies; second, they can cooperate on research and development; third, both countries can work together to promote trade and investment between their two countries; fourth, they can cooperate on regional and international issues. The further development of economic partnerships between Saudi Arabia and China would benefit both countries, as It would help boost economic growth, create jobs, and promote regional stability.

*By Prof. Alaa Alghamdi

Saudi Scholar & Writer *

@ayghamd