SUSRIS - Saud Arabia - China: President Hu in Riyadh

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President Hu and King Abdullah (SPA)

Saudi-Sino Relations:

President Hu in Riyadh

If the January visit of King Abdullah to Beijing opened a new era in Sino-Saudi relations, as Chinese leader Hu Jintao claimed at the time, then the April 22-24 visit of President Hu to Riyadh appears to have solidified the relationship.

The burgeoning ties between Riyadh and Beijing have been characterized as the result of Saudi Arabia's recognition of Asia's rising economic and geo-strategic status and China's increasing appetite for energy and the importance it attaches to securing future supplies of hydrocarbon resources. The talks between the leaders and delegations centered on trade, especially in the area of oil, natural gas and minerals. China's commerce minister, according to AFP, said the volume of trade between the countries was $2.7 billion in the first two months of 2006, up 43 percent from the same period in 2005.

In addition to the discussions and agreements in economic fields the leaders and delegations focused attention on Middle East regional issues including developments in Iraq and Palestinian affairs. President Hu in an address to the Saudi Consultative Council, the Majlis Ashura -- only the second foreign leader to do so -- offered Chinese assistance in resolving regional conflicts. Hu said, "Under these current circumstances, China is ready to work with Saudi Arabia and other Arab countries to support peace and growth in the Middle East and build a harmonious world that enjoys constant peace and prosperity," according to The Times (UK), which noted the pledge, although lacking specific details, was seen as a direct challenge to the United States security and diplomatic role in the region.

This SUSRIS NID provides highlights from the visit of President Hu to Riyadh and links to press reporting and related SUSRIS materials.

Highlights

President Hu arrived in Riyadh on Saturday, April 22, 2006 from the United States where he met President Bush on Thursday, April 20, 2006. [WhiteHouse.gov]
Hu and Abdullah oversaw a ceremony where agreements were signed in the fields of energy, security, defense and health among others. [BBC/AFP]
-- A security cooperation agreement was signed by Saudi Interior Minister Prince Naif and Chinese Foreign Minister Li Zhaoxing. [Arab News]
-- A defense system contract signed by Prince Khaled ibn Sultan, assistant minister of defense and aviation, and the chairman of China North Industries Group. [Arab News]
-- An accord on health cooperation was signed by Health Minister Dr. Hamad Al-Manie and Foreign Minister Li. [Arab News]
When President Hu's delegation visited the Eastern Province, Saudi Aramco president and CEO Abdullah S. Jum'ah and Sinopec Group President Chen Tong Hai signed a Memorandum of Understanding (MOU) to enhance the strategic commercial partnership between the two companies. [M&C News]
Saudi Aramco and Sinopec Group signed a memorandum of understanding over the weekend under which the Saudi company committed to supply Sinopec and its affiliates 1 million barrels per day of crude oil by 2010, officials said. [Forbes]
President Hu and King Abdullah discussed a proposal to set up a strategic reserve of Saudi oil in south-east China to be used by Beijing in case of emergency. This would be on top of the oil that Saudi Arabia already exports to China for its daily needs. [BBC]
The two sides discussed a plan to establish a $9.3 billion refinery and petrochemical project in northeastern China. The deal is not finalized but is said to be on track. [BBC]
President Hu offered Chinese support to resolve regional security issues during a speech at the Majlis Ashura, the Saudi Consultative Council -- which has hosted only one other foreign leader, French President Jacques Chirac last month. [Arab News]

Saudi and Chinese delegations participate in agreement signing ceremony overseen by President Hu and King Abdullah (SPA)

President Hu and Crown Prince Sultan (SPA)

King Abdullah decorates Chinese President with King Abdulaziz Necklace (SPA)

Press Reporting on President Hu's Visit

Related SUSRIS Reports

China Visit Over - King Abdullah in Beijing - SUSRIS NID - Jan. 27, 2006

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.

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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