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Saudi Arabia Strengthens Energy Deals With China, Sidelines Western Concerns

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The energy minister of Saudi Arabia said on Sunday that his country wants to cooperate with China rather than compete with it and that he “ignored” Western concerns over their expanding ties.

Since Saudi Arabia is the top oil exporter, hydrocarbon linkages serve as the foundation of its bilateral relationship with the largest energy consumer in the world. However, amid a warming of political ties, collaboration between Riyadh and Beijing has also increased in security and sensitive tech, much to the worry of the United States.

During an Arab-China business conference, Prince Abdulaziz bin Salman was asked about criticism of the two countries’ ties. He responded, “I actually ignore it because… as a business person.. now you will go where opportunity comes your way. We don’t have to be facing any choice which has to do with (saying) either with us or with the others.”

U.S. Secretary of State Antony Blinken visited Riyad from June 6-8 and the conference has come just days after his visit. The meeting has drawn a large number of Chinese businesspeople and investors to Riyadh.

Saudi-China oil deals

State-owned oil company Saudi Aramco announced two significant deals in March to increase its multi-billion dollar investment in China and strengthen its position as the country’s top crude supplier.

In December last year, Chinese President Xi Jinping visited Saudi Arabia and expressed his will to trade energy in Yuan. This was done to increase the use of Chinese currency in the global market of energy. At that time, China announced Saudi as its biggest energy exporter, a move that would undermine the supremacy of the dollar.

“Oil demand in China is still growing so of course we have to capture some of that demand. Instead of competing with China, collaborate with China,” Prince Abdulaziz said.

The two countries’ dynamism has also increased the likelihood that discussions for a free trade agreement (FTA), which have been ongoing since 2004 between China and Gulf Cooperation Council (GCC), dominated by Saudi Arabia, will be successful.

Any agreement, according to Saudi Arabia’s Minister of Investment Khalid Al Falih, must safeguard developing Gulf industry as the region begins to transition away from oil-based industries.

Hoping for a profitable deal, Falih said, “We need to enable and empower our industries to export, so we hope all countries that negotiate with us for free trade deals know we need to protect our new, emerging industries.”

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