Libmonster ID: UK-1430
Author(s) of the publication: M. A. PAKHOMOVA

M. A. PAKHOMOVA

Postgraduate student of the Institute of Information Technology of the Russian Academy of Sciences

Sino-Arab relations Keywords:Chinese influenceSaudi ArabiaMiddle Eastdiplomatic relationseconomic indicators

Diplomatic relations between the Kingdom of Saudi Arabia (KSA) and the People's Republic of China (PRC) were established in 1990.However, they have undergone a noticeable evolution during this period, which allows us to draw some conclusions about the principles of political and economic interaction between the largest and dynamically developing Asian power and the politically and economically complex Arab world.

Saudi Arabia, traditionally one of the key countries in the region, is moving to the forefront of the region and the Muslim world due to unrest in a number of other countries, for example, in Egypt. This includes international dialogue platforms such as the League of Arab States (LAS) and the Organization of Islamic Cooperation (OIC).

START: ROCKETS, PILGRIMS, TRADE MISSION

The intensification of relations between Beijing and Riyadh began in the 1980s with military cooperation, when China delivered a batch of CSS-2(DF-3)1.In 1981, it was officially announced that business ties were developing between the two countries. 2 According to some reports, one of the Saudi princes made a secret visit to Beijing at the same time.3 In the same year, General Secretary of the CPC Central Committee Zhao Ziyang met with Crown Prince Fahd 4.

We believe that a certain impetus to this development was the fact that two years earlier, in 1979, an agreement was signed on granting loans to China by the Union of Arab and French Banks in the amount of, according to various sources, from $0.5 billion. up to $1 billion 5.

By 1982. Saudi Arabia remained the only country in the Arab East that refrained from establishing diplomatic relations with China. Evidence of the KSA leadership's reconsideration of its position towards China was the visit of Foreign Minister Prince Saud al-Faisal to Beijing in December of the same year, where he held talks with his Chinese counterpart.

The expansion of bilateral trade and contacts in the military sphere contributed to the activation of cooperation between the two countries as a whole. Since 1981, the pilgrimage of Chinese Muslims to Mecca and Medina was restored (then only 20 people per year), hadiths* and the Koran were published in China, and state funds were allocated for the reconstruction of mosques. Since 1985, with the approval of the State Council of the People's Republic of China, the Islamic Association of China6 began to create certain conditions for organizing trips of its Muslim citizens to Saudi Arabia. This was motivated not only by the authorities ' desire to stabilize the situation in the multinational state, but also by China's financial support from oil-producing countries.7

In November 1988, the first step towards establishing official diplomatic relations was taken - a memorandum of understanding was signed between the People's Republic of China and the KSA. Riyadh and Beijing decided to open Chinese and Saudi trade missions, which provided permanent contacts between the two countries in the absence of diplomatic relations. In early 1990, the two countries established relations at the consular level, and in July of the same year - at the level of embassies.8

Soon after, cooperation in the field of investment significantly intensified. In June 1993, the First Vice Premier of the State Council of the People's Republic of China, Li Lanqing, met with entrepreneurs from Saudi Arabia to discuss specific Chinese economic projects proposed for investment in Saudi Arabia.9 From now on, these issues have occupied a significant place in the Beijing - Riyadh dialogue.

In 1996, the joint Saudi-Chinese commission for economic, trade and technical cooperation was launched, and in 1997, "friendship societies" were established in each country, which significantly expanded bilateral cooperation.-


* Hadiths - biographies of the Prophet Muhammad, his deeds and sayings.

page 53

cooperation in education, culture and information 10.

In the late 1990s, political contacts between Beijing and Riyadh reached a new level. In November 1999, Chinese President Jiang Zemin, King Fahd and Crown Prince Abdullah held talks in the capital of the Kingdom. The Chinese leader also attended a meeting of the China-Saudi cooperation commission 11.

This visit was of great importance for the two countries. First, a $1.5 billion agreement was signed within the framework of the project. on the construction of a large oil refinery in KSA and the supply of Saudi oil to China in the amount of 10 million tons annually over the next 50 years. Secondly, the establishment of "strategic cooperation relations" between the two countries in the field of energy was proclaimed. In continuation of the military line of cooperation, the Chinese side proposed to supply the KSA with intercontinental ballistic missiles with a range of up to 5,5 thousand km. However, under pressure from the United States, Riyadh was subsequently forced to abandon this deal. In the same year, at a meeting with representatives of the KSA business community, the Chinese leader invited Arabian businessmen to visit China and explore the possibility of investing their capital in the country's economy.12

In 2001, Sinopec, Aramco and Exon Mobil signed an agreement to establish a petrochemical enterprise in China (total investment amounted to $3.5 billion). This project was the first experience of setting up an oil refinery in China together with partners from other countries. The plant was put into operation in 2007, 50% of the shares belong to Sinopec, 25% each to Saudi Aramco and Exxon Mobil 13. This distribution is partly explained by Chinese legislation, according to which, when an enterprise with foreign participation is established in China, foreign companies can own no more than 50% of the shares. By 2009, the refinery capacity was increased from 80 thousand to 240 thousand barrels. per year 14.

In 2004, after Hu Jintao became the leader of the People's Republic of China, Beijing not only continued, but also strengthened its policy of strengthening cooperation with the KSA. It should be noted that the development of this vector of China's foreign policy has significantly strengthened China's position in the region as a whole.

The signing of the Agreement on Trade and Economic Cooperation and Free Trade between the People's Republic of China and the Gulf Cooperation Council (GCC) was an important step towards the development of China's relations with the Gulf countries. The document was intended, first of all, to guarantee uninterrupted purchases of oil by China in this strategically important region15.

PROJECTS AND PLANS ARE GETTING BIGGER AND BIGGER

The Chinese presence in this Middle Eastern country is gradually becoming more extensive and multifaceted. Thus, the implementation of joint projects of China's Sinopec and Saudi Aramco in the field of oil and gas development in KSA has begun. The Chinese have won a tender for joint gas production in the northwestern Rub al-Khali desert. In April 2005, the Saudi General Investment Committee signed an agreement with the Chinese Western Industrial Development Company (WWIDC) to build a major "industrial city" in the Saudi province of Jizan.16

A significant impetus for the development of relations between the two countries was the state visit of King Abdullah II, who ascended the throne in 2005, to China.17 Then, during the return visit of Chinese President Hu Jintao to KSA, a number of agreements were signed in the field of oil production, healthcare, as well as the so-called Contract on Defense Systems.

Hu Jintao suggested that the negotiating partners should create a strategic reserve of liquid hydrocarbon fuel in Southeastern China in the future, which would be formed by additional supplies of Saudi oil and petroleum products. The economic feasibility of this project and the forms of participation of both parties in its implementation were thoroughly discussed 18. Presumably, the Chinese proposal was related not only to concerns about possible supply instability, but also to the risks of sea transportation of oil due to the difficult political situation in the region.

During the same visit, negotiations were held on the construction of a large oil refining and petrochemical enterprise in Dalian worth $5.2 billion with the participation of Saudi firms. and the expansion of the refinery being built in Fujian Province. It was also decided that together with the Saudis, another similar plant will be built in Qingdao 19.

According to the head of the Investment Company Jadwa Investments (Riyadh), in 2006, Chinese goods accounted for 11.3% of the total volume of goods imported to KSA, including textiles and machinery. For comparison: in 2004, this figure was equal to 6.6%. At the same time, similar indicators for the export of Saudi products to China amounted to 11.2% and 4.8%, respectively. As a result, by 2010, the bilateral trade turnover reached a record $43 billion. Of course, the bulk of Saudi exports is oil. According to Chinese official statistics, in 2010, the KSA delivered more than 45 million tons of crude oil to China, which in monetary terms accounted for 19% of China's total imports. The second and third places were taken by Angola and Iran 20. In 2011, the bilateral turnover amounted to 64.4 billion rubles. China exported goods worth $14.9 billion to the KSA, which is 43.2% higher than in 2010. In turn, imports of goods to China from Saudi Arabia exceeded the previous year's figure by 50.8%, amounting to $49.5 billion.21

page 54

China intends to invest a significant amount in the KSA infrastructure, including the construction of high-speed railways, which is stipulated in the kingdom's five-year plan for 2009-2014. 22 By 2014, the parties plan to put into operation a joint refinery in the large port city of Yanbu (west coast of KSA), the geostrategic position of which will ensure stable supplies in the event of a change in the shipping regime in The Strait of Hormuz. The joint venture is expected to process 400,000 barrels of oil per day. The total amount of investment, according to preliminary estimates, will amount to $8.5 billion.23

The Chinese-Saudi Symposium on Trade and Economic Issues, held in the summer of 2008, made a major contribution to the achievement of these agreements.The Chinese Council for the Promotion of International Trade and the Saudi Chamber of Commerce and Industry were the organizers. It was attended by high-ranking officials and about 400 representatives of the business circles of the two countries. The issue of the interests of Chinese companies hoping to get contracts in the KSA was particularly actively discussed. Riyadh also announced its readiness to invest about $120 billion over the next five years. investment in infrastructure projects of the PRC 24.

THE CHINESE IN KSA AND THE SAUDIS IN CHINA

Among the construction contracts that Chinese companies have managed to obtain in Saudi Arabia, it is particularly important to mention the prestigious railway (estimated cost of $1.8 billion) between the holy cities of Mecca and Medina. It is being laid by a consortium led by China Railway Engineering 25.

By the way, the upcoming construction works in holy cities for Muslims by representatives of other faiths have caused protests among some of the faithful. It is noteworthy that soon information appeared on the Internet that employees of a Chinese construction company converted to Islam26. Similar problems are relevant for other countries in the Middle East, where there are Chinese workers and specialists. Similar unrest was observed in Algeria, for example. The flexibility of Chinese companies ' management in such situations, which is not often shown by other business partners of Arab countries, undoubtedly commands respect.

Saudi entrepreneurs in China are less active. Their interests are mainly limited to oil refining. They fully own two oil refineries in China and two more are jointly owned. Although the benefits of investing in the Chinese economy are obvious 27.

A certain obstacle on the way of Middle Eastern capital to China is the Chinese government's policy of reducing the growth of foreign direct investment (FDI) in the country. It is believed that this will make it easier to deal with the overheating of the national economy. Beijing seeks to impose special restrictions on the construction and financial sectors, where the largest inflows of speculative capital go.28 Although investments from the Gulf states are attractive to China, Beijing restricts their entry into the country. However, according to some analysts, only in words. The head of the Russian-Chinese Center for Trade and Economic Cooperation, Sergey Sanakoev, believes that "...China will never abandon its policy of increasing investment attractiveness. Only some restrictions are possible in strategically important industries and in terms of the size of controlling stakes for foreigners. " 29

China's rapid economic development naturally affects its relations with the Arab world, including Saudi Arabia. China's growing demand for crude oil and refined products has a decisive impact on these relations.30 China's dependence on oil imports exceeded the 50% threshold in 201031. In 2009, a list of 10 countries that supply oil to China was published, including Saudi Arabia.32 KSA's oil exports reached 1 million barrels. on day 33. In 2010, this indicator remained at the same level of 34 - this is 20% of the total volume of oil exports from the country. In 2010 Saudi Arabia came out on top among energy suppliers to China 35. In 2011, the same trend continued (970 thousand barrels per day). per day)36.

At the beginning of 2012 Beijing once again demonstrated its interest in the region: from January 14 to 19, Premier Wen Jiabao visited three GCC member countries-Saudi Arabia, the United Arab Emirates and Kuwait. During the visit to KSA, China's Sinopec and Saudi Aramco signed an "Agreement on joint construction of a refinery in KSA", and with another Saudi company - Basic Industries Corporation-an "Agreement on cooperation in the production of polycarbonate ether". The two governments also signed an Agreement on cooperation in the field of peaceful Uses of Nuclear Energy and an Agreement on Cooperation in stimulating Bilateral Investment.

The Saudi side stated that it welcomes Chinese investments in the construction of infrastructure facilities (railways, ports, electric communications, means of communication). At the same time, it was stated that along with large Chinese companies, the arrival of Chinese small and medium-sized businesses in the country will be welcomed.

20 YEARS OF COOPERATION: WHAT ARE THE RESULTS?

In 2010, the two countries summed up the results of economic and political cooperation over the 20 years since the establishment of diplomatic relations. Overall, they are certainly positive. In addition to the above-mentioned issues, cooperation in the Central Asian region has been developing-

page 55

in the context of countering terrorist threats, combating drug trafficking and cross-border crime. Documents on cooperation in the field of training personnel for security structures were signed. The first visit of the Chinese Navy ships to the KSA took place.

A wide range of global issues were discussed at a meeting between Chinese President Hu Jintao and the Special Representative of the King of Saudi Arabia, National Security Adviser to the King, Prince Bandar bin Sultan. First of all, they discussed the prospects for restoring stability in the Middle East in the light of the current crisis trends in this region.

Since the establishment of diplomatic relations, the trade turnover between the two countries has increased many times 37. Saudi Arabia has been China's largest trading partner in West Asia for 8 consecutive years. According to the statement of the Minister of Commerce Chen Demin at a press conference following the results of the 4th meeting of the Joint Commission on Trade and Economy, held in early 2010 in Riyadh, back in 2006, the goal was set to increase the bilateral trade turnover to $40 billion by 2010. This goal was achieved ahead of schedule -$41.8 billion in 2008.38 In 2015, the Chinese hope to increase the volume of bilateral trade to $60 billion 39.

Saudi-Chinese relations have a special place in the framework of the Sino-Arab dialogue. It is significant that Riyadh was one of the initiators of the establishment of the China-Arab Cooperation Forum and the China - GCC Cooperation Council in 2004.

* * *

China seeks to strengthen its position in the Middle East. Beijing sees no problem with the fact that some of China's Middle Eastern partners have undemocratic regimes. Such a loyal and virtually indifferent approach of Beijing to the internal problems of Arab countries largely guarantees the energy security and sustainable development of the PRC. In turn, Arab countries, including Saudi Arabia, are extremely interested in an ideologically inert buyer of hydrocarbons, whose political preferences do not depend too much on commercial interests.

In the end, strong and stable Saudi-Chinese relations "work" to strengthen stability in the Middle East, which in modern conditions is far from unimportant.


Volovich A. A. 1 China in the energy market of the Middle East -http://www.iimes.ru/rus/stat/2004/22 - 09 - 04.htm

2 As Siyasa, 04.11.1981.

3 Le Mond. Paris, 01.12.1981.

4 Los Angeles Times, 17.11.1981.

5 The People's Republic of China in 1979. Politics, economy, culture. Moscow, Institute of the Far East. 1982, p. 178.

6 A public organization that unites and coordinates religious activities of Chinese Muslims. In total, there are about 25 million adherents of Islam and about 40 thousand mosques in the country.

Valkoea L. V. 7th Place of Saudi Arabia in the Muslim world / / Islamic factor in international relations in Asia in the 70s-first half of the 80s. Moscow: Nauka Publ., 1987, pp. 102-114.

8 Xinhua, 15.12.2010.

9 People's Daily, 01.07.1993.

Kosach G. G. 10 Foreign investment in Saudi Arabia: China and Japan lead the way - http://iimes.ru/rus/stat/2007/05 - 05 - 07c.htm

11 INFOTASS, STORK-87. 01.11.1999.

12 Ibid.

Fan Tingting. 13 Energeticheskoe sotrudnichestvo mezhdu Kitayem i stranami Persidskogo zalivogo [Energy cooperation between China and the Persian Gulf countries]. 2012, N1, p. 84.

14 Ibid., p. 85.

15 China Daily. 05.02.04. 16 Kosach G. G. Decree. op.

17 Shiyu liu xiang dongfang: shenshi Shate Alabo he Zhongguo zhijian de zhiyu maoyi guanxi (Oil Flows East: Deepening China-Saudi Oil Energy Trade Relations), 16.03.2011 - http://www.knowlcdgeatwharton.com.cn/index.cfm?fa =viewArticle&articleID=2378

18 The US is wary of China's rapprochement with Saudi Arabia/ / RIA Novosti Region, 25.04.06 - www.nr2.ru/64885.html

19 Ibid.

20 Shiyu liu xiang dongfang: shenshi Shate Alabo...

21 China and Saudi Arabia mutually increased the supply of goods - http://www.china-suppliers.ru/news/39/

22 Ibid.

23 La Cina snobba le sanzioni all'Iran, ma il premier Wen Jiabao e ben accolto nel Golfo (Wen Jiabao was warmly welcomed in the Gulf countries, despite China's unwillingness to apply sanctions against Iran) / / La Stampa. 25.01.2012 - http://www.lastampa.it/ 2012/01/25/blogs/underblog/la-cina-snobba-le-sanzioni-all-iran-ma-il-premier-wen-jiabao-e-b en-accolto-nel-golfo-V9IDhDA2EFUIF qtDKWoTEP/pagina.html

Gabuev A. 24 The Chairman of the People's Republic of China went along the oil routes. China is looking for a replacement for Russia in Saudi Arabia / / Kommersant, 11.02.2009.

25 Ibid.

26 http://caucase.wordpress.com/2009/09/12

27 Ibid.

28 The Arabs found their way to China / / RBC, 02.02.07.

29 Ibid.

30 Oil consumption in China increased by 15% // Rosinvest, 21.12.2010 - http://www.rosinvest.com/news/768890/

31 The degree of China's dependence on crude oil imports for the first time exceeded the threshold of 15% / / Information and Analytical portal Business in China - http://asia-business.ru/lenta/china/20l0/04/12/ news 662.html

32 Major suppliers include: Angola (32.2 million tons), Iran (23.1), Russia (15.3), Sudan (12.2), Oman (11.6), Iraq (7.2), Kuwait (7.1), Libya (6.3), Kazakhstan (6 million tons). Cit. по: http://asia-business.ru/lenta/china/2010/04/12/news_662.html

33 Shiyu liu xiang dongfang: shenshi Shate Alabo...

Lebedeva T. P., Mramorova I. M. 34 Energeticheskaya bezopasnost ' Kitay kak geopoliticheskaya problema [China's energy Security as a geopolitical Problem]. Electronic bulletin. Issue # 24. Сентябрь 2010 г. С. 3 - http://e-journal.spa.msu.ru/images/File/2010/24/Lebedeva_Mramorova.pdf

Fan Tingting. 35 Decree. Op.

Cole J. Michael. 36 China's Oil Quest Comes to Iraq // The diplomat - http://thediplomat.com/20l2/12/02/china-introducing-the-middle-easts-future-hegemon/?all=tr ue

The United Kingdom and China have agreed to increase their trade turnover to 10 billion euros. dollars - http://www.alriyadh.com.sa/

38 Chinese Minister of Commerce: China and Saudi Arabia agreed to increase trade turnover to $ 60 billion by 2015 / / People's Daily, 01.11.10 - http://russian.people.com.cn/31520/ 6864697.html

39 China and Saudi Arabia to strengthen bilateral trade and economic cooperation / / CNTV, 11.01.2010 - russian.cctv.com/program/newsru/20100111/102686.shtml


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