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The visit of King Abdullah "will write a new chapter of friendly cooperation between China and Saudi Arabia in a new century" according to Chinese President Hu Jintao. The King has moved on to India, the second of four stops on his Asian tour, but a great deal of discussion has been generated by the
meetings in China. Reporters, analysts and commentators have weighed in on the significance of the visit -- the first by a Saudi King to the "Middle Kingdom," the first overseas destination for Abdullah since ascending to the Saudi throne -- covering a broad spectrum of topics: energy, trade, security, strategic balance, and more. This SUSRIS NID provides a capsule of reports and commentary following the state visit and links to related items posted on the SUSRIS web site and elsewhere. We begin with Khaled Almaenna, editor of Arab News, who reported from
Beijing on the visit.
Kingdom, China Sign Landmark Energy Pact
Khaled Almaeena
Chinese President Hu Jintao [Jan. 23] gave a red carpet welcome to Custodian of the Two Holy Mosques King Abdullah at the Great Hall of the People and said the royal visit would open a new chapter in Sino-Saudi relations.
The summit in Beijing saw the signing of five agreements, including a landmark pact for expanding cooperation in oil, natural gas and minerals. Both sides said the accords would usher in a new era of closer economic ties.
 Abdullah and Hu oversaw the signing of the agreements, which covered cooperation in economic, trade and technical areas. Agreements were also signed to �avoid double taxation� as well as for a Saudi loan to improve infrastructure in the city of Aksu in China�s oil-rich Xinjiang region.
Neither side immediately provided further details of the agreements, although Foreign Minister Prince Saud Al-Faisal spelt out before the signing ceremonies the main interest of both nations. �China is one of the most important markets for oil and Saudi oil is one of the most important sources of energy for China,� said the prince who is accompanying the king.
Prince Saud said the energy deal would set the framework for specific energy investments, but agreements on the projects would have to be signed between the two countries� oil companies. He indicated specific agreements would soon be signed. Chinese Foreign Minister Li Zhaoxing said the agreements would be implemented shortly.
�There is a great deal of understanding between the two countries on all issues including Middle East, Iraq and the Iranian nuclear program,� he said. Li said Abdullah�s visit coincided with the beginning of both the Hijri and Chinese new years. President Hu has accepted an invitation from the king to visit Saudi Arabia, he added.
King Abdullah is scheduled to leave Beijing [Jan 24] for New Delhi, where he will be the chief guest at India�s Republic Day celebrations on Thursday. He is the first Saudi king to visit India in 50 years. He will visit Malaysia from Jan. 29 and Pakistan from Feb. 1 on the final legs of his tour. A large group of prominent Saudi businessmen is traveling with him.
The visit by the Saudi king comes when China, the world�s second biggest oil consumer, is scouring the globe for more oil to fuel its unprecedented economic growth and transformation. At the same time, Saudi Arabia, the world�s biggest oil supplier with the largest known reserves, is seeking to diversify its economy.
At the welcoming ceremony, Hu said the fact that King Abdullah had chosen China as the destination of his first official trip outside the Middle East since his accession to the throne had been noted and welcomed in Beijing.
�This will write a new chapter of friendly cooperation between China and Saudi Arabia in a new century,� Hu said, calling the king �a respected and familiar old friend� of China. �You are the first Saudi king to come to China; this visit is also your first overseas one since you became king, and China is the first stop on this (four-nation) trip,� Hu told King Abdullah before the leaders began their private talks.
�These three firsts show fully that your majesty places great importance on developing relations between our two countries,� he said. President Hu spoke warmly of King Abdullah�s efforts in promoting Saudi-Chinese relations.
King Abdullah said he looked forward to stronger bilateral ties. �What pleases us greatly is that since our two countries established diplomatic relations in 1990, they have had fruitful cooperation in many fields,� the king said. �We hope this cooperation will increase even more in the future,� he added.
Saudi Arabia was proud of its strong relations with Beijing, the king said and affirmed the Kingdom�s support for a One-China policy. He hoped that the summit talks would arrive at a common vision on major international issues, including Middle East peace.
The Saudi Press Agency said King Abdullah and President Hu later discussed major regional and international issues, most importantly Palestine and Iraq. The two leaders also explored ways of strengthening bilateral ties, the agency added.
The agreement on �cooperation in oil, natural gas and minerals� was signed by Petroleum and Mineral Resources Minister Ali Al-Naimi and Ma Kai, head of China�s State Development and Reform Commission.
Energy analysts said the agreement was the first between the two governments on overall cooperation in the field of energy. The two countries have previously signed specific deals in areas such as building oil refineries and drilling.
Finance Minister Dr. Ibrahim Al-Assaf signed three agreements. The agreements relate to double taxation; the Saudi-Chinese joint economic commission; and the loan for infrastructure projects in Aksu. Labor Minister Dr. Ghazi Al-Gosaibi signed an accord on cooperation in vocational training.
Analysts said King Abdullah�s choice of China as the first country of his Asian tour, which also includes India, Malaysia and Pakistan, was strategically sound.
�China has the fastest growing market and Saudi Arabia has the right product to sell,� said a Hong Kong-based oil analyst. Shi Yinhong, an international relations professor at People�s University in Beijing, said China had �a very focused interest� in Saudi Arabia. �China wants secure sources of oil,� Shi said.
China�s oil demand has been increasing by about 15 percent annually. The Asian giant imported a record 130 million tons of crude last year, up 3.3 percent from 2004, after growth of more than 30 percent a year earlier.
Oil imports from Saudi Arabia have already risen from 8.8 million tons in 2001 to more than 20 million tons last year, according to published official figures.
Among other energy deals already in place, China�s Sinopec is drilling for gas in the Saudi desert and building a refinery with Saudi Aramco in China�s Fujian province. Aramco has also begun engineering work with Sinopec on a second refinery in China�s Qingdao city.
Chinese firms won bids for construction contracts valued at several billion dollars in Saudi Arabia last year; the contracts include cement production, telecommunications, infrastructure and other sectors.
Source: Arab News
SUSRIS thanks Arab News for permission to reprint this article.
King Abdullah Prepares for China Visit - SUSRIS NID -
Jan. 21, 2006
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.
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..�
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