Online seminar “What does Xi Jinping's visit to Saudi Arabia mean?”

On December 19, within the framework of the online project “It's worth talking about”, another online seminar was held with Dr. Andrey Baklanov, Professor, Head of the Middle East and North Africa Studies Section, School of Regional Studies, HSE University, Deputy Chairman of the Association of Russian Diplomats. The primary guest for this seminar was a Dr. Sergey Luzyanin, Professor School of Regional Studies, HSE University.

In his opening speech, Dr. A.G. Baklanov stressed that the visit of the Chinese leader to Saudi Arabia marks the formation of a new stage in relations between these countries. He noted that China has been eyeing Saudi Arabia for a long time and suggested that the implementation of deeper and closer cooperation will begin. Then Professor Baklanov gave the floor to the guest of the meeting, Dr. S.G. Luzyanin.

Professor Luzyanin began by describing the historical prerequisites for the visit of the CPC chairman, which were first identified in 2016 when a new strategic concept for the development of relations between China and Arab countries in a new era was published. At the same time, Xi Jinping's first visit to Saudi Arabia took place, which was on a smaller scale than the visit in 2022. Dr. Luzyanin noted the three most essential elements of the new concept: energy security, the implementation of the “One Belt and One Road” initiative and the development of the idea of a “Community of the common Destiny of Mankind” in the Middle East region.

The second reason for the visit is a sharp jump in investment in Arab countries from China in 2021: then they increased to 360% compared to the years preceding the coronavirus pandemic. The main object of investment was the hydrocarbon industry, but apart from it, China invested in transport projects within the framework of the “One Belt and One Road” initiative. Iraq attracted much of China's attention at that time, and the total trade volume with the region's countries exceeded 200 billion US dollars.

The third, no less critical circumstance was the intensification of Chinese foreign policy with non-Arab countries of the Middle East. In particular, this is an unprecedented package of agreements concluded between Iran and China in 2021 in the amount of over 400 billion US dollars. At the same time, Iran and Saudi Arabia are competitors in the Middle East region, so the recent visit of the Chinese leader may lead both to complications in relations with Iran and new opportunities, thanks to strategic cooperation with both competitive countries.

Then Dr. S.G. Luzyanin proceeded to a detailed analysis of the results of the visit. Firstly, China and Saudi Arabia concluded 34 investment agreements totalling $29.2 billion, and these agreements relate not only to hydrocarbons but also to “green” energy, information technology, transport and construction projects. The agreements also relate to military-technical cooperation between the two countries. In addition, the agreements have deepened the trend for developing the “One Belt and One Road” initiative in Saudi Arabia.

Secondly, Xi Jinping made two important statements at the GCC and Sino-Arab summit. The first statement concerned the possibility of creating a free trade zone between China and the Persian Gulf countries. The second was about increasing oil supplies from Saudi Arabia and paying for these supplies in yuan. In addition, parties of the summit announced a proposal for a joint search and development of hydrocarbon deposits. An Investment Council and a Nuclear Safety Center will also be established.

Summing up the results of the visit and the summits held, it is possible to identify 8 main areas of cooperation between China and the countries of the Middle East: 1) energy security, 2) food cooperation and security, 3) healthcare, 4) “green” innovations, 5) environmental safety, 6) military-technical cooperation and defence, 7) transport cooperation within the framework of “One Belt and One Road”, 8) humanitarian and cultural cooperation.

Thus, China has formed three main areas of relations with the region's countries in its strategy. The first direction is bilateral, in–depth cooperation between China and Saudi Arabia. Such a line of behaviour is a challenge for the United States as the main ally of Saudi Arabia since the transition from “petrodollars” to “petroyuan” indicated.

The second direction is sub–regional cooperation based on the summits of the GCC and the League of Arab States with the participation of China. At this level, the main project is the implementation of the “One Belt and One Road” initiative. In addition, strengthening the partnership between China and such leaders of the region as Saudi Arabia, Qatar, and the UAE could deal a sensitive blow to the interests of the United States as a leading partner of these Arab countries. China estimates that they have invested more than 300 billion US dollars in the region's economy.

The third direction is the geopolitical format of relations between China and the region's countries. Over the past 5-7 years, a group of states loyal to Beijing has emerged due to the development of the “One Belt and One Road” and bilateral projects in the Middle East. Professor Luzyanin proposed as a historical analogy the mechanism of influence of the USSR in the Middle East, with a discount on the absence of ideological claims. In addition to economic prerequisites, such a loyal attitude of the countries of the region is also conditioned by the Chinese policy of non-interference in the internal affairs of states, which for monarchical and authoritarian regimes looks more acceptable than criticism from the United States on the issue of human rights violations. At the same time, Beijing itself does not openly position its policy towards the region as directed against the United States.

Currently, China's current strategy and its first successes cannot be called dismantling the US positions in the region, but it is obvious that this exacerbates competition between global powers. Dr. S.G. Luzyanin suggests that at the moment, China is trying to carefully become a mediator, cooperating with various, including competing, countries in the region. Nevertheless, the current policy is aimed primarily at deepening economic and technological cooperation.

In conclusion, Professor Luzyanin speaks about the systematic and complex entry of China into the region for a long time. As a result of economic diplomacy, China managed to challenge the traditional partnership between the leading countries of the Persian Gulf (Saudi Arabia, the UAE and Qatar) and the United States. Nevertheless, China's current successes in this area cannot yet be called the dismantling of the existing system, and most likely, in the next 2023, the United States will take retaliatory measures to strengthen its interests in the Middle East region.

Support to the project from the Faculty of World Economy and International Affairs at HSE University is gratefully acknowledged.