International relations between states often work on the principle of mutual benefits, thus making these relations dynamic in nature. The flexible nature of constant change in relations can be well understood through the case study of China and Saudi Arabia. Both found trade as a mutual ground amidst previously contradicting interactions.
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Introduction
“We have no eternal allies, and we have no perpetual enemies. Our interests are eternal and perpetual, and those interests it is our duty to follow.”
-Ratcliffe(p.1126, 2017)
As the Riyadh-Beijing partnership clocks over three decades, the tale of their unusual bonhomie has been one for the books. Unlike most bilateral ties, the Sino-Saudi Tango surprisingly started off on the wrong foot. The Arabian camel and the Chinese dragon never saw eye-to-eye until the 1990s, as their initially frosty relations were largely pedalled by ideological quagmires and oppositional alignments during the Cold War. To make matters worse, Chinese support for an anti-monarchical uprising in Dhofar(Oman), in the late 1960s and Saudi Arabia’s vote against the People’s Republic of China (PRC)’s admission to the United Nations in 1971 further exacerbated the pre-existing cracks in their relationship (Behbehani,1981,pg-133-184). As other Gulf countries slowly warmed to China, Saudi leaders remained convinced that the former should have a minimal footprint on the Arabian Peninsula. They thus initiated a trade ban against China in 1972 in an offensive measure to keep Chinese propaganda out of the Kingdom (Fulton, 2019,pg.88).
However, the thawing of Sino-Saudi relations was subsequently ushered by the onset of the Iran-Iraq war when Beijing made a successful sale of fifty Dong Feng-3/ CSS-2 ballistic missiles in 1986 (Al Saud, 1995, pg.137-152,), to help Riyadh build its deterrence umbrella against Tehran. The Saudi Kingdom in a bid to demonstrate its loyalty and fuel reciprocity, downgraded its embassy in Taipei to a representative office, thereby undoing its recognition of Taiwan and cementing its diplomatic relations with China on July 21, 1990 (Ottaway, 2008, pg.66-77). The prospect of Saudi Arabia having Pershing missiles, conventionally armed with a nuclear warhead—was perceived as an unacceptable threat by Washington, thereby eliminating it from the list of possible sellers, forcing Riyadh to look towards Beijing.
Since then, the winds of change driven by mutuality of interests have largely moulded the present-day Sino-Saudi relations and the complementary nature of their policy initiatives. While most geopolitical detractors would be quick to question the future and longevity of Sino-Saudi relations, owing to the distance that separates the two landmasses, the “Loin des yeux, loin du Coeur” (far from sight, far from the heart) (Properce, 1st Century BC Elegy 21, Book III) approach however, has never been an impediment to the strategic resolve that binds the regimes together. With intensified cooperation across energy, minerals, defence security sector and burgeoning trade investments over the years, the recent elevation of Beijing and Riyadh’s bilateral ties to a Comprehensive Strategic Co-operative Partnership (Jin, 2022) suggests that these partners are willing to play the long game.
Utilitarian Cooperation, Intentional Alignment and Conditional Solidarity: The Economics of Engagement in Sino-Saudi Relations
“There is no such thing as a free lunch"
-Milton Friedman
(There is no such thing as a free lunch, 1975)
Saudi Arabia has never shied away from forging international alliances to bolster its economic growth and add to its strategic heft in the Middle East Nations & African (MENA) region; in an attempt to be recognised as an agenda-setter and leader of the Arab nations. China, in this regard, has proven to be a trustworthy partner offering the Kingdom ample opportunities for “utilitarian cooperation, and intentional alignment” since 2014. Given Beijing’s great power ambitions, growing market demands and aspirations to transform into an economic powerhouse (Abeysinghe et Lu, 2003,pg. 164-185), the geostrategic importance of Arab states (Saudi Arabia, in particular) is critical now more than ever. Two of the four main shipping chokepoints impacting Chinese trade – namely Gibraltar, Malacca, Hormuz, and Bab-El-Mandab- are in the Arab world. Nearly half of China’s oil and gas imports transit through the Strait of Hormuz and Bab-El-Mandab remains an important channel for China’s exports to the Middle East, Africa, and Europe and oil imports from Algeria, Libya, and Sudan (Jin, 2022).
By applying Kautilya’s principles enshrined in his masterful treatise, the Arthshastra, “The root of wealth is an economic activity and lack of it brings material distress. In the absence of fruitful economic activity, both current prosperity and future growth are in danger of destruction”; both Riyadh and Beijing have made economic cooperation the fulcrum of their sustained engagement over the past decade.
As per estimates, China in 2021 was distinguished as Saudi Arabia’s largest trading partner, with total bilateral trade amounting to $87.3 billion. While Chinese exports to Saudi Arabia stood at $30.3 billion, 18% of Beijing’s total crude oil purchases from the Kingdom totalled $55.5 billion in 2022. These export earnings are expected to help the Saudi government maintain its “social bargain”, as explained by John Calabrese, Director of the Middle East-Asia Project at the Middle East Institute, in an interview with Al Jazeera.(Al-Makahleh et Cafiero, 2022). Additionally, these earnings shall prove to be extremely crucial for harmonising Saudi Vision 2030 with China’s One Belt One Road (OBOR) initiative; in the fields of hydrogen energy, Chinese language education, housing, direct investment, radio and television, digital economy, economic development, standardisation, news coverage, tax administration, and anti-corruption.
Reliance on energy as a primary force multiplier and the subsequent streams of income it generates has been instrumental in driving the economic engine of both regimes. The Kingdom-run oil conglomerate ARAMCO, in early 2022, agreed to build a $10 billion refinery and petrochemical complex in northeast China, thereby marking its single largest investment in the world’s second-largest economy. Expected to be operational by 2024, the project shall combine a 300,000 bpd refinery and a 1.5 million tonnes per year ethylene plant, with ARAMCO supplying up to 210,000 bpd of crude oil. (Al-Jazeera, 2022).
The deepening of economic ties executed through the diversification of Riyadh and Beijing’s dependence portfolios can be further witnessed through ACWA Power’s (partly owned by the Saudi Sovereign Wealth Fund) joint investment of $1 billion with Silk Road Fund towards the construction of a 1.5 Gigawatt (GW) gas-fuelled power plant in Uzbekistan, under China’s One Belt One Road (OBOR) initiative and state-run China Energy Engineering Corp (CEEC)‘s plan to establish a 2.6-GW solar power station in Al-Shuaiba in Saudi Arabia. In further evidence of the variegation witnessed in the Sino-Saudi co-operation matrix, the Saudi Advanced Communications and Electronics Systems Co (ACES) signed a deal with China Electronics Technology Group to manufacture unmanned aerial vehicle (UAV) payload systems in the Kingdom, in March 2022, thereby consolidating its presence in the military and securitisation domain. (Indian Express, 2022). Although Saudi Arabia does not view China as a replacement for its leading supplier of weapons, the Kingdom does, in part, see China as an alternative option whenever the U.S.A. refuses to sell specific types of systems.
Source: OEC. World, Al Jazeera https://www.aljazeera.com/news/2022/12/9/china-saudi-arabia-strengthen-partnership-on-energy-defence
This strategic, utilitarian and highly functional barter between China and Saudi Arabia has been largely successful, despite the geopolitical contestations in the latter’s neighbourhood. The fruits of shared economic prosperity and intentional alignment of their respective goals pivoted towards the manifestation of the “1+2+3” cooperation pattern emphasised in China’s Arab Policy Paper, where “1” represents energy, “2” represents infrastructure construction, trade & investment and “3” represents nuclear energy, satellite technology and renewable energy (Teizzi, 2016); continues to fuel the bilateral relationship as it moves from strength-to-strength with every passing year.
President Xi Jinping's historic multi-day visit to Riyadh earlier in December 2022 resulted in the signing of 35 Memorandums of Understanding (MoUs) and deals worth $30 billion (Saudi Press Agency, 2022), thereby highlighting the continued centrality of the economic engagements between the two countries. The two sides also sealed the Comprehensive Strategic Partnership Agreement (CSPA), reaffirming their commitment to support each other’s core interests by – expanding manufacturing in the automotive industry (electronic vehicles), building resilient supply chains, exploring common investment prospects in the petrochemicals sector, incentivising research in sources of renewable energy (photovoltaic cells, wind, solar, hydrogen energy), promoting innovation in artificial intelligence, water desalination, ensuring localisation of energy sector components and cooperation in the peaceful uses of nuclear energy. (Saudi Press Agency, 2022).
It is, however, interesting to note that the areas of future cooperation, identified by both regimes stand fulfilled only if the stakeholders are willing to support each other in maintaining their sovereignty and exert joint efforts to defend the rules of international law and the principle of non-interference in the internal affairs of their respective states. This aspect of “conditional solidarity” was brought into action post the enforcement of the CSPA, with the Saudi side reaffirming its adherence to the one-China principle and the Chinese holding their end of the rope by expressing support for the Kingdom in maintaining its security, stability and condemning actions that stand to interfere in with the core security interests of Saudi Arabia.
As international clarion calls necessitating punishment for extra-judicial killings, human-right violations and instances of xenophobia committed by both regimes gain decibel; the pact of conspicuous silence and conditional solidarity agreed upon by Riyadh and Beijing shall ensure that accountability eludes the company and the terms of their economic engagement remain air-tight.
The way forward: Can Saudi Arabia continue to balance tacit tolerance with strategic equivalency in its bilateral relations with the USA and China?
“Is China a better friend to Saudi Arabia than the United States is? Not necessarily a better friend, but a less complicated friend.”
-Former Saudi Ambassador Prince Turki bin Faisal Al Saud (USA Today, 2006, A13)
Strategic hedging as a concept is not unique to Saudi Arabia in the Middle East, as “Gulf countries have progressively been diversifying their strategic option, by ‘hedging’ against the risk of a U.S. retreat and building ties with Asian powers (Samaan, 2019).” Intensifying bilateral cooperation with like-minded allies like Beijing enables Riyadh to project its prowess as an able negotiator, elevate its standing amongst fellow MENA region nations as a lucrative investment destination and leverage the multiplicity of hedging options available at its disposal viz-a-viz the United States of America (USA); to select the ‘best possible trading partner’ to guarantee the attainment of its developmental goals. Additionally, building closer ties with China will also help Saudi Arabia to balance against its regional rival—the Islamic Republic of Iran (MacGillivray, 2019, pg.61-80) and provide it a net advantage while trumping Iran’s pursuit of international legitimacy (Marks,2022).
Saudi Arabia and its Gulf allies have been defiant in the face of the USA’s pressure to break with fellow OPEC+ oil producer Russia over its invasion of Ukraine and to limit dealings with China; as they try to navigate a polarised world order with an eye on their national economic and security interests (Saudi Press Agency, 2022). Refusing to succumb to USA’s arm-twisting tactics, OPEC+ decided to cut oil production by two million barrels ahead of the 2022 midterm elections, much to the dismay of the Biden administration. As the Saudi Foreign Minister Prince Faisal bin Farhan Al Saud continues to deny the allegations of polarisation upon being questioned about Riyadh’s relations with Washington, Saudi Arabia admittedly doesn’t view its bilateral relations with USA and China as a ‘zero-sum game’.(Saudi Press Agency, 2022).’
Manoeuvring through the slippery slope of Saudi-American bilateral ties hasn’t necessarily been a cakewalk. Relations between both countries, especially at the leadership level have reached a low point, since the killing of Washington Post journalist Jamal Khashoggi; reportedly sanctioned by the Saudi Crown Prince. However, there is the wider trend of GCC countries being unhappy with the USA’s’ changing posture in the region — described as retrenchment, divestment or recalibration, among other names — without consideration of the needs of its partners, particularly security needs (Barron et al, 2022). While the Kingdom of Saudi Arabia has never intended to drive the USA out of its strategic calculus, it does wish to gain a ‘first-mover’s advantage ‘and a greater say at the international stage, beyond the contours of the GCC, to usher its ‘national rejuvenation’ (Jin, 2022)’ by competing for progress and renaissance.
Thus, the limits of Riyadh’s tolerance and the parameters for ascertaining the extent of strategic equivalency accorded to the USA and China shall largely depend on the ‘charm offensive’ unleashed by both players which can yield predictable, stable, and high-return investments across diverse cooperation portfolios with limited risks for the Kingdom.
“There is a tide in the affairs of men, which taken at the flood, leads on to fortune. Omitted, all the voyage of their life is bound in shallows and miseries. On such a full sea are we now afloat. And we must take the current when it serves, or lose our ventures.”
-Shakespeare (Shakespeare, 1599, Julius Caesar Act-IV, Scene-III)
Touted to become one of the world’s fastest-growing economies this year with sweeping pro-business reforms, a sharp rise in oil prices and production power recovery from a pandemic-induced recession in 2020 (Mati et Rehman,2022); it seems like an opportune moment for China and the USA jump onto Saudi Arabia’s train of prosperity. As the attainment of national interests gains primacy, Beijing and Washington hold the key to their respective partnerships with Riyadh, where mutuality of interests and minimisation of threat perceptions shall help the stakeholders dictate future conversations on economic engagements with Riyadh.
This article represents the views of contributors to STEAR's online digital publication, and not those of STEAR, which takes no institutional positions.
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