Xi on historic Saudi Arabia visit focussed on energy ties

RIYADH/WASHINGTON: Chinese President Xi Jinping touched down in Saudi Arabia on Wednesday for a historic visit that is likely to focus on energy ties but also follows months of tensions with the United States. 

Xi, recently reanointed as leader of the world’s second biggest economy, arrived in the capital Riyadh, Chinese and Saudi state media said, for a three-day visit that will include talks with the Saudi rulers and other Arab leaders.

Saudi Foreign Minister Prince Faisal bin Farhan and Riyadh Governor Prince Faisal bin Bandar were among those who welcomed Xi at the airport, where a ceremonial purple carpet was laid out from the steps of the plane.

On major roads in Riyadh, the red-and-gold Chinese flag alternated with the green Saudi emblem. China is the top customer for oil from Saudi Arabia, the leading exporter of crude, and both sides appear keen to expand their relationship at a time of economic turmoil and geopolitical realignment.

The trip -- only Xi’s third overseas journey since the coronavirus pandemic began, and his first to Saudi Arabia since 2016 -- comes after US President Joe Biden’s visit in July, when he pleaded in vain for higher oil production.

It will feature bilateral meetings with Saudi King Salman and Crown Prince Mohammed bin Salman (MBS) as well as a summit with the six-member Gulf Cooperation Council and a wider China-Arab summit.

The programme represents the “largest-scale diplomatic activity between China and the Arab world since the founding of the PRC”, or People’s Republic of China, foreign ministry spokeswoman Mao Ning said on Wednesday.

The official Saudi Press Agency said the kingdom accounted for more than 20 percent of Chinese investment in the Arab world between 2005 and 2020, “making it the biggest Arab country to receive Chinese investments during that period”. Oil markets are expected to be a top agenda item for talks between China and Saudi Arabia, especially given the turbulence the markets have experienced since Russia invaded Ukraine in February. The G7 and European Union on Friday agreed to a $60-per-barrel price cap on Russian oil in an attempt to deny the Kremlin war resources, injecting further uncertainty into the markets.

On Sunday, the OPEC+ oil cartel led jointly by Saudi Arabia and Russia opted to keep in place production cuts of two million barrels per day approved in October.

Saudi and Chinese officials have provided scant information about the agenda, though Ali Shihabi, a Saudi analyst close to the government, said he expected “a number of agreements to be signed”. Beyond energy, analysts say leaders from the two countries will likely discuss potential deals that could see Chinese firms become more deeply involved in mega-projects that are central to Prince Mohammed’s vision of diversifying the Saudi economy away from oil.

They include a futuristic $500 billion megacity known as NEOM, a so-called cognitive city that will depend heavily on facial recognition and surveillance technology.

The OPEC+ production cuts approved in October represented the latest blow to the longtime partnership between Saudi Arabia and the United States, which said they amounted to “aligning with Russia” on the war in Ukraine.

Xi’s visit is expected to be closely watched in Washington, which entered into what is often described as an oil-for-security partnership with Saudi Arabia towards the end of World War II.

While the Biden administration has smarted over the production cuts, Riyadh has at times accused the United States of failing to hold up the security end of the bargain, notably after strikes in September 2019 claimed by Yemen´s Huthi rebels temporarily halved the kingdom´s crude output.

China and Saudi Arabia already work together on arms sales and production. Yet analysts say Beijing cannot provide the same security assurances Washington does -- nor does it wish to.

Nevertheless, if the Saudis are “looking to extract more security guarantees from the US -- signalling that they have the opportunity of strengthening ties with China is something that suits them well,” said Torbjorn Soltvedt, of the risk intelligence firm Verisk Maplecroft.

The GCC-China summit will be held in Riyadh on Friday, the bloc said in a statement.

Meanwhile, the White House on Wednesday responded to the visit of President Xi Jinping to Saudi Arabia by warning that China´s attempt to spread influence worldwide is “not conducive” to international order.

Asked about the Xi visit, White House National Security Council spokesman John Kirby told reporters that Saudi Arabia remains a crucial US ally, but he issued a warning over China.

“We are mindful of the influence that China is trying to grow around the world. The Middle East is certainly one of those regions where they want to deepen their level of influence,” he said. “We believe that many of the things they’re trying to pursue and the manner in which they’re trying to pursue it are not conducive to preserving the international rules-based order.” President Joe Biden has made what he identifies as a global competition between democracies and autocracies a central theme of his presidency. “We are not asking nations to choose between the United States and China, but as the president has said many times we believe that in this strategic competition the United States is certainly well poised to lead,” Kirby said.

Washington has close commercial, diplomatic and military relations with Saudi Arabia. Ties were badly strained by the 2018 murder, blamed by the United States on Saudi leader Mohammed bin Salman, of dissident Jamal Khashoggi, a US resident. New tensions erupted over a decision by the Saudi-led OPEC+ cartel to cut production in a bid to raise oil prices -- a move seen by the Biden administration as potentially harming his Democratic party in this November’s midterm legislative elections. Kirby said Saudi Arabia had been a strategic US partner for some 80 years but noted that Biden has ordered a review of the ties.

“Yes in the wake of the OPEC+ decision a couple months ago we are reviewing that bilateral relationship and make sure that it best suits American national security interests. That work’s ongoing,” Kirby said.