News in Depth
January 21, 2006

King Abdullah Prepares for China Visit

Saudi Arabian King Abdullah will begin a state visit to the People's Republic of China on Sunday, January 22, 2006. The journey is the first for a Saudi ruler to China since diplomatic relations were normalized in 1990. The visit comes at a time when Saudi-Sino economic cooperation is booming. Bilateral trade was up 59% for the first eleven months of 2005 compared to the same period a year earlier and China's rapid industrialization has spawned a growing energy appetite. Against this backdrop King Abdullah will meet Chinese President Hu Jintao.

This SUSRIS NID provides for your consideration a selection of articles from current reporting and background material from SUSRIS and elsewhere to bring you up to date on the visit of King Abdullah to China and the status of Saudi-Sino relations.

Abdullah Visit to Boost Sino-Saudi Relations
P.K. Abdul Ghafour, Arab News 

JEDDAH, 21 January 2006 � Custodian of the Two Holy Mosques King Abdullah�s three-day visit to China that begins tomorrow is expected to strengthen political, economic, commercial and cultural ties between the two Asian economic giants.

China has warmly welcomed news of Abdullah�s forthcoming visit, his first to a foreign country since ascended the throne in Riyadh on Aug. 1 and first by a Saudi king since the two countries established diplomatic relations in 1990.

The talks between King Abdullah and Chinese President Hu Jintao are expected to focus on energy and security issues. Saudi Arabia is China�s main oil supplier as Beijing oil imports 14 percent of its total oil requirements from the Kingdom.

�The Chinese government places great importance on this visit,� Chinese Foreign Ministry spokesman Kong Quan said, adding that King Abdullah and President Hu Jintao would review the development of bilateral relations over the past 15 years and explore ways of further expanding cooperation between the two countries in all fields.

Kong said the two leaders would also discuss bilateral cooperation in the field of energy resources, but added that it was not yet clear whether the two sides would sign any agreements in the area. The king is scheduled to visit only Beijing, where he would meet with other Chinese leaders, Kong said.

Trade between China and Saudi Arabia has been growing rapidly in recent years, with trade volume reaching $14.5 billion in the first 11 months of 2005, led primarily by oil exports to the Asian giant. Kong called the figure �an astonishing growth� since it is far higher than the national average of 23 percent.

China imported 20.01 million tons of crude oil from Saudi Arabia during January to November last year, Kong said. Cooperation and exchanges between the two countries in such fields as culture, public health, science, technology and telecommunications are also active, he pointed out.

Saudi Arabia, on the other hand, has offered Chinese businessmen and companies investment opportunities worth $624 billion in vital sectors such as petrochemicals, gas, desalination, power generation and railways.

Chinese Muslims, who appreciate Saudi Arabia�s efforts in the service of Islam and Muslims all over the world, are eagerly waiting the royal visit. Muhammad Mayon, deputy chairman of Chinese Muslim Association, remembers the generous donation given by the king to the association when he visited China in 1998 while he was crown prince.

A record number of Chinese pilgrims � around 7,000 � performed Haj this year, according to Guo Chengzhen, deputy director of the department in charge of Muslim affairs with the State Administration for Religious Affairs.

Source: Arab News

Saudi Arabia seeks big business from Asia tour
RIYADH (Reuters) - Saudi Arabia, the world's top oil exporter, aims to raise its economic and political profile in booming Asian countries when senior officials start a tour of the region next week that will include China and India.

King of Saudi Arabia to visit China 
BEIJING, Jan. 17 (Xinhuanet) -- King of the Kingdom of Saudi Arabia Abdullah bin Abdul-Aziz will pay a state visit to China from Jan. 22 to 24 at the invitation of Chinese President Hu Jintao..

Saudi King to Visit China to Discuss Oil
BEIJING � Saudi King Abdullah will visit China and is expected to discuss possible cooperation in oil and energy security, the Chinese Foreign Ministry said Tuesday. Next week's visit will be the first to China by a Saudi ruler since the two countries formed diplomatic relations in 1990, said Foreign Ministry spokesman Kong Quan.

China- Saudi Arabian oil deal on the rocks
Shanghai. January 19. INTERFAX-CHINA- A 20-mln-ton oil depot project between Saudi Arabia and China in the southern province of Hainan has been suspended, due to hesitation on the Saudi side, an official with the Hainan provincial government told Interfax on Thursday. In the run up to an official visit by Saudi King Abdullah speculation has been rife as to the future of the deal.

[Chinese] Foreign Ministry Spokesman Kong Quan's Regular Press 
Conference on 17 January 2006
Q: Will the Energy Minister and other Ministers of Saudi Arabia accompany their King in his visit to China? Will any agreement be signed, especially on energy cooperation? We know that many oil companies of China want to make investment in foreign countries. Will you talk about something on this? 
A: ..I am not quite clear about whether any agreement on energy cooperation will be signed, but I would like to make a double check for you. To make it up, I would like to share with you some information I have. From January to November, 2005, the bilateral trade between China and Saudi Arabia enjoyed very rapid development, amounting to around 14.5 billion US dollars, a striking growth of 59% compared with the same period of the year before last. You know in the same period, the foreign trade of China grew by around 23%, so you can see that the bilateral trade between China and Saudi Arabia overrun by a large margin the growth speed of China's overall foreign trade. We imported 20.01million tons of crude oil from Saudi Arabia last year. At the same time, China maintains very good exchanges and cooperation with Saudi Arabia in the fields of culture, health, science and technology and communication. 

Saudi Economic Performance: A Conversation with SAMBA Chief Economist Brad Bourland - SUSRIS - Feb. 27, 2005
"SUSRIS: The SAMBA 2004 report highlighted shifts in Saudi Arabia's trading patterns. While the US remained the top source of imports to the Kingdom, China has shown strong gains in this regard, jumping from seventh to fourth largest source for Saudi Arabia. How will the changing trade landscape impact US-Saudi relations?
Brad Bourland: I don't know how the trade patterns themselves will affect relations more broadly -- maybe it is the reverse that is true -- but it is clear that the trade relationship is in decline. China is gaining globally, so that is a challenge for the US that is not unique to Saudi Arabia. I was struck that even with the strength of the Euro in 2003, imports into Saudi Arabia from the Euro area showed strong growth in both volume and value."

Insight on the Kingdom - from the Author of Inside the Mirage -- A Conversation with Thomas Lippman - Mar. 30, 2005
"..Those changes are now occurring and it's only natural that if Saudi Arabia breaks away from or grows out of its dependent relationship on the United States for advise and technology it would begin to look around. I like to tease people and stir up trouble here in Washington by saying, "Well, look at this from the Saudi perspective, they've always wanted a close relationship with a country that is a big importer of oil, is a nuclear power and has a permanent seat on the UN Security Council. That sounds like China to me." People look at me kind of funny. And, by the way, "A country with no track record of supporting Israel." Well of course, I don't think the Saudis are going to propel themselves into a strategic alliance with China, but there's a certain logic to the Saudis wanting to increase their options.."

Crossroads in US-Saudi Relations - Jean-Francois Seznec Interview - SUSRIS - Oct 18, 2004
"..Mostly, the Saudis are making a big effort to open up their economy towards China and towards the Far East in general, but mostly China. That doesn't mean that China is going to come in and defend Saudi Arabia. I don't think the Chinese would even think of that. It means increases in the economic links between China and Saudi Arabia, which are growing by leaps and bounds. Saudi imports into China are growing by over 40 to 50 percent per year. The Saudis are selling tremendous amounts of petrochemicals, not only oil, but petrochemicals and chemicals into China. That is only growing and will grow further. The Saudis are investing in China. There was just a new deal signed by Aramco this month, a joint venture with Exxon actually, and the Chinese to build a huge complex in Fujian near Shanghai. I think that in a way, the worst thing that could happen between the Saudis and the U.S. has happened. Today, from the Saudi standpoint, the U.S. is irrelevant. It's not negative. It's not positive. It's irrelevant to what they want to do in the future.."

A Strong Relationship is the Only Path - Interview with Usamah Al-Kurdi - Dec. 9, 2004
"..we have seen the trade between Saudi Arabia and the United States go up in 2003 less than the level of growth of trade between Saudi Arabia and Europe, Saudi Arabia and China.."

U.S.-Saudi Relations and Global Energy Security - James Wolfensohn - SUSRIS - May 18, 2004
"..Then if you look at the two major countries, India and China, where China has 1.3 billion people and India a billion. Even in today's market you see the impact of these emerging giants in terms of their demand for energy. You only have to look at the Chinese demand for energy of which went up 50 percent in the last 18 months and which is projected to go up three times more over the next 20 years. My guess is that's a conservative estimate. As we look forward to Chinese participation in global trade, today it runs around three percent of global trade with the U. S. around 13 percent. Our projections would lead us to believe that by the year 2017 they'll be equal -- 12 percent each. Showing this dramatic incline in China's participation in manufacture and in global trade. If you're going to manufacture or participate in global trade, it stands to reason your demand for energy.."

International Energy Outlook 2004 Highlights - SUSRIS - Apr. 20, 2004
"World energy demand is expected to increase at an annual rate of 1% to 2% over the next 15 years, reaching an annual demand of 107 million barrels per day by 2020, partly as an anticipated consequence of growth in China, India and other South East Asian economies.." 

Foreign Investment In Saudi Arabia's Energy Sector - By Gawdat Bahgat - SUSRIS - Sep 2, 2004
"..important conclusions can be drawn from the signing of these agreements. First, the Saudi award of contracts to European, Russian, and Chinese companies signals Riyadh's strategy to strengthen relations with these countries. Commercial interests cannot be separated from strategic considerations. Examining Riyadh's relations with these countries is beyond the scope of this essay. Still, the growing significance of these relations should be highlighted.."

Saudis in Strategy to Export More Oil to India and China - SUSRIS Newsletter - "In the News" - #97 - Feb. 21-27, 2005
"Saudi Aramco, the world's largest producer of crude oil, is seeking to strengthen relations with energy companies in India and China as part of a strategy to increase Saudi oil exports there. Together, the two countries are expected to account for much of the increase in global oil demand over the next decade.."

Saudi Aramco-ExxonMobil oil refinery JV launched in China - SUSRIS Newsletter - "In the News" - #116 - Jul 4-10, 2005
"China's largest oil refining and ethylene integrated joint venture, participated by Sinopec, Saudi Aramco and ExxonMobil, was officially launched in East Chinese Fujian Province.." 

Saudi Arabia's Crown Prince Abdullah To Visit Hong Kong - SUSRIS Newsletter - "In the News" - #101 - Mar 21-27, 2005
"His Highness Crown Prince Abdullah of Saudi Arabia is set to include a stopover in Hong Kong as part of his upcoming official visit to Beijing. This official visit highlights the progress made since the establishment of the Hong Kong Consulate-General just two years ago, and comes as trade and investment links between China and the Kingdom are blossoming..�

• King Abdullah Bio

• President Hu Jintao Bio

• China - Background Notes - US State Dept.

• China - Country Study - Library of Congress

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