Saudi Arabia forges closer trade and economic ties with China as part of its Vision 2030 plan to diversify its economy.
Saudi Arabia’s King Salman bin Abdulaziz Al Saud signed $65 billion worth of deals in China in March, marking the highlight of his month-long, six-nation tour of Asia, which took him to Malaysia, Brunei, Indonesia (including six days in Bali), Japan and the Maldives, as well as China.
In what could be described as an unusual roadshow, the mission was designed to drum up support for next year’s initial public offering of a 5% stake in Saudi Aramco, which likely will be the biggest IPO in history, valued at about $100 billion. Saudi Arabia wants China Investment Corp., a sovereign wealth fund with $814 billion of assets, to invest in the IPO, along with China National Petroleum Corporation.
The Saudis are also eager to attract foreign investment for their ambitious Vision 2030 plan to diversify the kingdom’s economy. Last August, Saudi Arabia signed 15 preliminary agreements with China on a trip led by deputy crown prince Mohammed bin Salman.
Chinese president Xi Jinping took advantage of the Saudi king’s visit to promote his country’s One Belt One Road initiative. The “new Silk Road” relies on Saudi Arabia as an indispensable link between China and Europe. While specific details of the Saudi-China deals were not released, they included agreements on oil investments and renewable energy. King Salman told Xi, “Saudi Arabia is willing to work hard with China to promote global and regional peace, security and prosperity.”
Meanwhile, China has stepped up its involvement in Middle East affairs and has begun building a naval base in Djibouti, which has a deep-sea port on the Gulf of Aden.