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What factors contribute to China dominating the majority of business dealings with Saudi Arabia?

The Saudi Ministry of Investment recently conducted its latest roadshow in China, where Minister Khaled Al-Faleh engaged with Chinese counterparts at a conference focused on bolstering trade, investments, and technology cooperation.

During these discussions, both sides expressed a strong commitment to collaboration, with China showing readiness to jointly support Beijing’s Belt and Road infrastructure investment program alongside Riyadh’s Vision 2030 initiative. They also pledged to enhance cooperation across various sectors such as energy, aviation, photovoltaics, and artificial intelligence, while prioritizing the protection of global industrial supply chains.

The ties between China and Saudi Arabia have notably strengthened, particularly since June of last year, when Saudi Arabia’s energy minister, Prince Abdulaziz bin Salman, emphasized a shift towards collaboration rather than competition with China. What began as a relationship primarily focused on hydrocarbon ties has evolved significantly, marked by the signing of a comprehensive strategic partnership agreement and various investment deals.

At the recent conference, deals worth over $25 billion were inked, spanning 60 agreements covering energy, agriculture, tourism, mining, financial services, logistics, infrastructure, technology, and healthcare. Notably, a significant agreement in the information and communication technology sector was signed between the Saudi Esports Federation and Chinese Esports Tournament Operator VSPO, valued at $8.5 billion.

Moreover, Ajlan & Bros Holding Group, one of the leading family offices active in China, signed an agreement with Oriental Energy Co. to explore collaboration opportunities in manufacturing, totaling $7.5 billion. Additionally, the Saudi Ministry of Investment forged a deal with China’s state-owned CRRC Group to pursue opportunities in renewable energy and sustainable mobility, amounting to $2 billion.

The burgeoning relationship between Chinese companies and Saudi Arabia began early last year when BMG represented a prominent Chinese semiconductor manufacturer. This manufacturer has since partnered with King Abdulaziz City for Science and Technology to conduct comprehensive research and development aimed at serving the Saudi market. This technological initiative, once commercialized, is poised to be transformative in the Saudi market, given the critical role semiconductor technology plays in various sectors.

China has emerged as Saudi Arabia’s largest trading partner, with bilateral trade surpassing $106 billion last year, marking a significant increase from 2021. As an active participant in the Saudi Ministry of Investment’s global roadshows promoting foreign direct investments into the Kingdom, I am inclined to believe that China has secured a substantial portion of Saudi business opportunities.

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