How Saudi Arabia can capitalize on Chinese expertise to achieve its diversification goals
Saudi Arabia is the single largest recipient of Chinese investments under the Belt and Road Initiative at about $5.5 billion. (AFP)
December 09, 2022
- In the first half of 2022, the Kingdom was largest recipient of Chinese investments under the Belt and Road Initiative
- Beyond energy, they are also exploring cooperation on the circular carbon economy and digital infrastructure
RIYADH: While strengthening trade ties and regional security will be priorities when Chinese President Xi Jinping visits Saudi Arabia, Beijing could use this opportunity to further its Belt and Road Initiative as the Middle East, more specifically so the Kingdom, remains at the center of its ambitious project.
Saudi Arabia was the single largest recipient of Chinese investments under BRI, with about $5.5 billion in investments made in the Kingdom during the first half of 2022, according to a report by the Shanghai-based Green Finance and Development Center.
This comes as BRI countries in the Middle East received about 57 percent of BRI investments as the regional countries increased their share of overall BRI engagement from 8 percent in the first half of 2020 to 32 percent in the first half of 2022.
Energy was the main avenue for investment as Saudi Arabia received the most energy engagement in the first half of 2022. (AFP)
Among the sectors, energy was the main avenue for investment as Saudi Arabia received the most energy engagement in the first half of 2022, elevating the Kingdom to fourth place in the BRI for energy engagement between 2013 and 2022.
In the gas sector too, Saudi Arabia was the main recipient of investments from China at $4.6 billion in the first half. The Kingdom also saw its cooperation with China on solar projects improving with a $210-million project with Jinko Solar.
In October, Saudi Arabia and China in a virtual meeting agreed to jointly coordinate investments in the countries of BRI to ensure oil supply and demand security to BRI countries, the Saudi Press Agency reported.
Co-chaired by Saudi Energy Minister Prince Abdulaziz bin Salman, the meeting discussed areas where both countries can strengthen their relationships such as oil and petrochemicals, decarbonization technologies, electricity and renewables, and hydrogen.
This was the fourth gathering of the Belt and Road Major Investment Projects and Energy Subcommittee of which Prince Abdulaziz is the Saudi chairman, SPA reported.
However, both countries look to go beyond the energy sector and are exploring new frontiers of common interest — such as the circular carbon economy and digital infrastructure — that are set to drive the future economy.
Saudi Arabia’s massive push toward sustainability and green economy received further boost when Crown Prince Mohammed bin Salman last month announced that the Kingdom would contribute $2.5 billion to a green initiative in the Middle East over the next 10 years.
China, being an early adopter of clean technology with thousands of patents under its name, can play an important role in helping Saudi Arabia achieve its sustainability goals. Over the last 20 years, China has established its global position as an energy innovator, with significant success in the areas of solar power and, more recently, electric mobility, according to a report by the International Energy Agency.
In the space of digital infrastructure, China’s growing technological expertise in areas like cloud computing, 5G, surveillance technology and virtual currency is expected to set benchmarks for the rest of the world.
This sector offers huge opportunities for both countries to engage as the world embraces the fourth industrial revolution.
Earlier this year, the Saudi Ministry of Communications and Information Technology approved a new Communications and Information Technology Law to overhaul the Kingdom’s digital infrastructure as it intends to bolster growth in the communications and information sectors.
As part of Vision 2030, Saudi Arabia aims to grow its ICT sector by 50 percent, while increasing the sector’s contribution to the gross domestic product by $13.3 billion. These initiatives will include 50 percent localization but, at the same time, attract more foreign investment.
Saudi Arabia can capitalize on China’s technological expertise to foster its ambition of becoming a regional leader in the information and communication technology sector.
While the Chinese president’s visit to Saudi Arabia is set to strengthen trade ties, both countries have the opportunity to expand their cooperation beyond energy, technology or green economy as they prepare for a new dawn.
RIYADH: While strengthening trade ties and regional security will be priorities when Chinese President Xi Jinping visits Saudi Arabia, Beijing could use this opportunity to further its Belt and Road Initiative as the Middle East, more specifically so the Kingdom, remains at the center of its...