Saudi Arabia – China Ties: Several Investment Agreements, MoUs Signed During President Xi’s Visit

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China’s President Xi Jinping is on a three-day visit to the Kingdom of Saudi Arabia, where he will attend summits with leaders of Gulf and Arab countries in the hope of deepening trade and investment ties with the region. So far multiple deals have been signed, including 34 investment agreements in sectors such as energy (green hydrogen, solar), information technology, cloud services, transportation, logistics, medical industries, housing, and construction.

Agreements signed during state visit

On December 8, Chinese President Xi Jinping and King Salman bin Abdulaziz Al Saud signed a “comprehensive strategic partnership agreement” at Al Yamamah Palace where Crown Prince Mohammed bin Salman hosted a lavish reception. The same day, state media – Saudi Press Agency (SPA) – reported that China and Saudi Arabia had signed 34 investment agreements on the previous day within the framework of President Xi’s visit. The agreements cover “several sectors in the fields of green energy, green hydrogen, photovoltaic energy, information technology, cloud services, transportation, logistics, medical industries, housing and construction factories”. The SPA did not elaborate on details.

Besides these 34 agreements, Saudi state media stated that China and Saudi Arabia were set to sign deals valued at around US$30 billion on December 8. A deal over Huawei Technologies will bring cloud computing, data centers, and high-tech complexes in Saudi cities, as reported in Al Jazeera, which attributed it to Saudi officials.

During his visit, President Xi is attending the first China-Arab States Summit and the China-GCC Summit in Riyadh. Leaders from the Arab world in attendance at the summit include Egyptian President Abdel Fattah El-Sissi, Kuwaiti Foreign Minister Salem Abdullah Al-Jaber Al-Sabah, Bahraini Foreign Minister Abdullatif bin Rashid Al Zayani, Tunisian President Kais Saied, Palestinian President Mahmoud Abbas, and Sudan’s de facto leader Abdel Fattah al-Burhan. Al Jazeera is reporting that Iraqi Prime Minister Mohammed Shia al-Sudani, Moroccan Prime Minister Aziz Akhannouch and Lebanese caretaker Prime Minister Najib Mikati have confirmed their attendance.

The China-Arab States Summit – the first such summit to be held – is based on the China-Arab States Cooperation Forum (CASCF), a summit first held between China and the Arab League in 2004. The China-GCC Summit will see the gathering of leaders from the GCC, which is comprised of six gulf nations: Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates (UAE). The GCC’s main headquarters are in Riyadh.

The trip is President Xi’s third overseas state visit since the COVID-19 pandemic began and has been touted by Chinese state media as the “largest-scale diplomatic activity between China and the Arab world”.

President Xi’s visit to Saudi Arabia has received glowing coverage in the kingdom as various investment and energy deals are being discussed, including coordination between the kingdom’s Vision 2030 and China’s Belt and Road. There is also anticipation about potential progress on China-GCC free trade agreement (FTA) negotiations.


President Xi last visited Saudi Arabia on a state visit in 2016, during which time he held talks with King Salman and Crown Prince Minister Mohammed bin Salman. Meanwhile, the Crown Prince last traveled to Beijing in January 2022 to attend the Winter Olympics. The last face-to-face meeting between the two leaders in an official capacity was in 2019, when the Crown Prince traveled to Beijing to hold talks on matters related to energy cooperation, as well as collaboration on China’s Belt and Road Initiative (BRI).

Xi Jinping also held a phone call with the Crown Prince in April 2022, in which they reiterated their commitment to building closer bilateral ties. This includes “signing agreements to synergize Saudi Arabia’s Vision 2030 with the Belt and Road cooperation” and “push for an early conclusion of the China-Gulf Cooperation Council (GCC) free trade area agreement”, according to the readout of the meeting. 

Saudi vision 2030 

Saudi Vision 2030 (Vision) is a strategic framework aimed at reducing Saudi Arabia’s reliance on oil, diversifying its economy, and expanding public service areas such as health, education, infrastructure, recreation, and tourism. One of the Vision’s main objectives includes promoting a softer and more secular image of the Kingdom, in addition to bolstering economic and investment activity. The plan also involves producing weapons and boosting government spending on the military sector. 

The Vision was first announced by Crown Prince Mohammed bin Salman in April 2016. Since then, the Council of Economic and Development Affairs (CEDA) has been in charge of and keeping track of investment allocations and other elements necessary to put the plan in motion. 

The three principles underpinning the Vision want Saudi Arabia to become the “heart of the Arab and Islamic worlds,” a worldwide investment powerhouse, and a hub linking Afro-Eurasia. 

The Vision revolves around three key topics that outline several goals to be accomplished by 2030: 

  • A vibrant society: Creating a lively community through investment in urbanism, culture and entertainment, sports, Umrah, and UNESCO World Heritage Sites. 
  • A thriving economy: Boosting high employment levels, global competitiveness, and non-oil exports. Attracting foreign direct investment (FDI). Facilitate the entrance of women in the workforce. 
  • An ambitious nation: Building a country with high ambitions through the expansion of areas such as non-oil revenue, government efficiency, digital government, family income and savings, non-profits, and volunteerism. 

Below we look at a few key projects shaping the Kingdom’s future development trajectory. 


The Saudi Crown Prince Mohammed bin Salman’s introduction of the NEOM initiative in October 2017 highlighted the expanding tendencies of Saudi Arabia’s economy’s modernization and restructuring in the post-oil age. The project is a sign of the Kingdom’s steadfast strategy to adopt massive development initiatives that make good use of the Saudi location’s advantages and prospects for collaboration with neighboring nations to convert towards a diverse, modern, and more open economy. 

NEOM is a US$500 billion-worth high-tech city and is often considered the centerpiece of Saudi Arabia’s post-oil diversification strategy. The city, which would cover a total area of 26,500 square kilometers, is situated in northwest Saudi Arabia and will extend to the Egyptian and Jordanian borders. Its land coverage is expected to be more than 35 times the size of Singapore. In particular, NEOM will display zones devoted to emerging innovations in 16 industries, including biotechnology and food manufacturing. 

The area will be composed by green spaces with orchards, vegetable gardens, and flowerbeds, as well as a variety of sporting facilities, including fields for cricket and football, gyms, tennis and basketball courts, and more. 

By 2030, it is anticipated that the project will have contributed at least US$100 billion to the Kingdom’s GDP. The project is expected to be completed by 2025. 

The Red Sea Project 

The Red Sea Project is a massive land and property project under the Saudi Vision 2030 plan, developed in Saudi Arabia and managed by Red Sea Global. The initiative, which aims to draw tourists to the Red Sea coast by concentrating on luxury and ecotourism, was unveiled by Saudi Crown Prince Mohammad bin Salman in July 2017.   

Once completed, the project will cover 28,000 square kilometers of islands, beaches, desert, mountains, and volcanic areas, increasing Saudi Arabia’s GDP by US$5.86 billion annually, as it is expected to attract one million people each year. 

According to the developers, the Red Sea Project will rank among the top sustainable tourism destinations in the world, with a policy of zero trash to landfills, complete carbon neutrality, and a prohibition on single-use plastics.  

Under the Vision, the project will be fully completed by 2030. 

The Middle East Green Initiative 

The Middle East Green Initiative represents Saudi Arabia’s support for global environmental initiatives. With the goal of achieving a major worldwide reduction in carbon emissions and implementing the largest reforestation initiative in history, the project strengthens Saudi Arabia’s cooperation and knowledge transfer with regional and international partners.  

The Crown Prince first convened the inaugural Middle East Green Initiative Summit on October 25, 2021, in Riyadh. The event enabled a pioneering regional conversation on climate change, during which various leaders agreed to push forward their collaborative efforts in environmental and climate change initiatives. 

The project encompasses two main objectives: 

  • Reducing carbon emissions by more than 10 percent of the current global levels – in particular, reducing emissions from hydrocarbon production in the region by at least 60 percent; and 
  • Planting 50 billion trees across the Middle East region, of which 10 billion will be located in Saudi Arabia alone, accounting for 5 percent of the global afforestation goal. 

The Kingdom has also established a Green Initiative Foundation, a non-governmental organization (NGO) with a focus on ensuring the implementation of the Green Initiative. 

Saudi engagement with the BRI 

Saudi Vision 2030 and China’s BRI naturally complement one another. The strategic objective of the BRI is to enhance logistical and infrastructure connections while promoting commerce and investment. On the other hand, the Saudi Vision 2030 intends to create a diverse economy independent from oil trade. 

In 2022, Saudi Arabia has been the largest recipient of Chinese investments in the BRI, averaging US$5.5 billion worth of deals, which demonstrates Beijing’s commitment and long-term ambitions in the Middle East – especially following a detour from investment in other countries based on geopolitical considerations. 

The strengthening of Sino-Saudi ties has been sparked by this convergence of economic agendas. In order to further the BRI and industrial capacity cooperation, the two countries signed a Memorandum of Understanding (MoU) during President Xi Jinping’s visit to Riyadh in January 2016, elevating the bilateral relationship to a comprehensive strategic partnership – from which Saudi’s engagement in the BRI benefited greatly. 

China’s foreign direct investment (FDI) in Saudi Arabia has shown a pattern of sustained growth over the years following the announcement of the BRI. Although the flow of Chinese FDI to Saudi Arabia slightly decreased between 2016 and 2017 (due to Saudi’s economic reforms and regulatory changes influencing China’s outbound investments), investments scored a new high in 2019, reaching US$654 million.  

The expansion of collaboration between Chinese and Saudi businesses is reflected in the increase in investment and trade linkages. This collaboration encompasses not just conventional infrastructure and utility building but also emerging economic areas like digital innovation and new energy development. Chinese businesses have progressively increased their presence in the Saudi petrochemicals industry – this expansion, however, has been rather slow in comparison to the activity of Saudi businesses in China. 

One of the largest deals between China and Saudi Arabia on the BRI is that signed between Saudi Arabian Oil Company (Saudi Aramco) and China Petroleum & Chemical Corporation (Sinopec). According to the MoU, the companies will jointly assess refining and petrochemical integration opportunities; engineering, procurement, and construction; oilfield services, upstream and downstream technologies, and in the areas of carbon capture and hydrogen processes. 

Other areas of cooperation and BRI engagement include (but are not limited to): 

  • Enabling energy transition; 
  • Integrating hydrogen supply chains; and  
  • Building local capacity in renewable energy investments. 

China-Saudi Arabia bilateral trade  

China is Saudi Arabia’s largest trade partner. Bilateral trade reached a total of US$87.31 billion, according the China’s National Bureau of Statistics (NBS). This was a year-on-year growth rate of 30.1 percent. Of this, Chinese exports to Saudi Arabia reached US$30.32 billion, up 7.9 percent year-on-year, while Chinese imports from Saudi Arabia reached US$56.99 billion, up 46 percent year-on-year. 

China-Saudi Arabia Bilateral Trade 2017-2021 (billion US$) 
 Year  Trade in total  Exports from China to Saudi Arabia  Imports from Saudi Arabia to China 
2017  50.14  18.38  31.76 
2018  63.28  17.43  45.85 
2019  78.07  23.88  54.19 
2020  67.17  28.10  39.07 
2021  87.29  30.32  56.99 
Source: National Bureau of Statistics, China 

The bulk of imports from Saudi Arabia was crude oil and petrochemical products. Saudi Arabia remains China’s largest supplier of crude oil, and in 2021, China imported 87.57 million tons of crude oil from the kingdom, a year-on-year increase of 3.1 percent. The total value of Saudi exports of mineral fuels, oils, and products thereof reached US$44.87 billion in 2021, according to ITC Trade Map. 

Top 5 Products Exported from Saudi Arabia to China in 2021 
Product category  Amount (million US$) 
Mineral fuels, mineral oils and products of their distillation; bituminous substances; mineral wax  44,870.8 
Organic chemicals   5,668.1 
Plastics and articles thereof  4,890.2 
Ores, slag, and ash  560.3 
Salt; sulphur; earths and stone; plastering materials, lime and cement  280.8 
Source: ITC Trade Map 

Meanwhile, the main Chinese exports to Saudi Arabia were machinery and electrical components, steel products, and clothing and textiles. In 2021, China exported a total of US$7.79 billion worth of electrical machinery and equipment to Saudi Arabia. 

Top 5 Products Exported from China to Saudi Arabia in 2021
Product category  Amount (million US$) 
Electrical machinery and equipment and parts thereof; sound recorders and reproducers, television image and sound recorders and reproducers, and parts and accessories of such articles 


Machinery, mechanical appliances, nuclear reactors, boilers; parts thereof  4,794.6 
Vehicles other than railway or tramway rolling stock, and parts and accessories thereof  2,310.6 
Ships, boats and floating structures  1,957.2 
Furniture; bedding, mattresses, mattress supports, cushions and similar stuffed furnishings; lamps and lighting fittings, not elsewhere specified or included; illuminated signs, illuminated nameplates and the like; prefabricated buildings  1,463.4 
Source: ITC Trade Map 

Non-oil trade between the two countries has been growing as Saudi Arabia’s overall proportion of non-oil trade continues to increase. According to data from the Saudi General Authority for Statistics, the country’s non-oil exports grew 27.5 percent from the same month in 2021 to reach SAR 24.1 billion (US$6.4 billion). Saudi Arabia’s main non-oil commodity is plastic and rubber articles, and in 2021, China imported US$4.8 billion worth of this commodity. 

China-GCC negotiations 

China has been actively engaged in deepening relations with the six member countries of the GCC. The relationship has, for the most part, been based on the trade of energy resources, with the region being one of China’s main sources of crude oil and liquified natural gas (LNG) imports. The economies of Oman, Kuwait, and Saudi Arabia are highly reliant on oil exports to China. At the same time, China remains reliant on the Gulf nations for its energy security – Saudi Arabia alone accounted for 17.4 percent of its crude oil imports in 2021.

However, non-oil trade between China and the GCC states is also increasingly important, and as Gulf countries seek to diversify their economies, this is set to grow. Industries such as high-end technology, telecommunications, renewable energy, and tourism, seeing significant potential. 

Against this backdrop, both China and the Arab Gulf nations will be keen to come away from the summits and meetings with some inked agreements and deals. 

Over the past two decades, China and the GCC have held several rounds of negotiations on a potential FTA. However, talks have stalled on a number of occasions since they began in 2004. Previously, negotiations have been dropped due to disagreements over oil tariffs, responses to the Syrian civil war, as well as diplomatic crises within the gulf region. 

Recent efforts have been made to revive talks, with China hosting a delegation of foreign ministers from GCC countries in Wuxi as recently as January 2022. According to reports from the discussions, the diplomats agreed to conclude discussions on the FTA as soon as possible. 

It is currently unclear whether the final details of the FTA can be hashed out during the China-GCC Summit, but it is nonetheless likely to be an important topic of discussion throughout Xi’s visit. The conclusion of such as agreement would provide a great boost to bilateral trade and investment, and may help to secure deeper bilateral relations for years to come. 

This article was originally published on December 7, 2022. It was updated December 9, 2022.

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