Preface
China Local/Global
China has become a global power, but there is too little debate about how this has happened and what it means. Many argue that China exports its developmental model and imposes it on other countries. But Chinese players also extend their influence by working through local actors and institutions while adapting and assimilating local and traditional forms, norms, and practices.
With a generous multiyear grant from the Ford Foundation, Carnegie has launched an innovative body of research on Chinese engagement strategies in seven regions of the world—Africa, Central Asia, Latin America, the Middle East and North Africa, the Pacific, South Asia, and Southeast Asia. Through a mix of research and strategic convening, this project explores these complex dynamics, including the ways Chinese firms are adapting to local labor laws in Latin America, Chinese banks and funds are exploring traditional Islamic financial and credit products in Southeast Asia and the Middle East, and Chinese actors are helping local workers upgrade their skills in Central Asia. These adaptive Chinese strategies that accommodate and work within local realities are largely ignored by Western policymakers.
Ultimately, the project aims to significantly broaden understanding and debate about China’s role in the world and to generate innovative policy ideas. These could enable local players to better channel Chinese energies to support their societies and economies; provide lessons for Western engagement around the world, especially in developing countries; help China’s own policy community learn from the diversity of Chinese experiences; and potentially reduce frictions.
Evan A. Feigenbaum
Vice President for Studies, Carnegie Endowment for International Peace
China in the Saudi Calculus
Unlike Saudi Arabia’s relationship with other nations, its relations with China developed relatively recently. From 1949, when the People’s Republic of China (PRC) was founded, until 1990, when diplomatic relations with Saudi Arabia were established, the two countries viewed each other with suspicion due to ideological differences and Cold War dynamics.
China’s support for the uprising in Dhofar, Oman, in the late 1960s and Saudi Arabia’s vote against the admission of the People’s Republic of China to the United Nations in 1971 further complicated relations between the two countries. In fact, Saudi Arabia was the last Gulf Cooperation Council state to establish diplomatic relations with the PRC in 1990 (Kuwait in 1971; Oman in 1978; United Arab Emirates in 1984; Qatar in 1988; and Bahrain in 1989).
Relations between Saudi Arabia and China did not originate from strategic convergence but rather from Riyadh’s disagreements with the United States. During the Iran-Iraq War (1980–1988), Saudi Arabia sought to purchase Pershing missiles from the United States for defense but was denied. Drawing on informal ties established in the early 1980s mainly through the Hajj (pilgrimage) diplomacy, the kingdom approached China in 1985 to buy Dong Feng-3/CSS-2 ballistic missiles. In 1986, China agreed to sell fifty missiles to Saudi Arabia for $3.5 billion, paving the way for diplomatic relations a few years later. The only issue for China was the kingdom’s recognition of the Republic of China in Taiwan instead of the PRC in Beijing, which was resolved when Saudi Arabia switched its embassy in Taipei to an economic and cultural office.
Since then, relations between the two countries have steadily progressed from being marginal to forming a comprehensive strategic relationship in 2016. For example, in 1990, trade between the two countries amounted to $417 million, but in 2022, it reached nearly $105 billion. The relationship between the two states has passed through three phases. The first phase spanned the period from 1990 to 2005. During these years, the economic relationship between the two countries remained modest, as shown in Table 1. This was partly because China did not have the refinery capacity to process Saudi crude oil. During this period, Saudi Arabia exported crude oil and petrochemical products to China and primarily imported textiles and machinery from China.
The next phase spanned 2006 to 2015, driven by China’s need for Middle Eastern oil to sustain its economic growth and Saudi Arabia's realization that global oil demand was shifting toward Asia, particularly China. During this period, cooperation deepened in the energy and infrastructure sectors, facilitated by high-level visits between the countries’ leaders.
In 1999, then president Jiang Zemin became the first Chinese leader to visit Riyadh, resulting in a strategic oil cooperation agreement, allowing Saudi Arabia to invest in China’s refinery sector and permitting Chinese companies to invest in Saudi Arabia’s domestic oil market. In 2005, Aramco signed an agreement with Sinopec, one of China’s big three state-owned oil companies, to expand an existing refinery in Fujian province and manage 600 gas stations there. Additionally, Aramco negotiated an agreement with Sinopec to build a second refinery in Qingdao, Shandong province, concluded in 2007.
After ascending the throne, King Abdullah made his first overseas visit to China in 2006. With his “looking East” trade policy, his visit led to five agreements, covering cooperation in areas such as oil, natural gas, and minerals, as well as economic, trade, and technical cooperation. Later that year, Jiang’s successor as Chinese president, Hu Jintao, visited Saudi Arabia, addressing the Shura Council and advocating for continued energy dialogue and expanded mutual investments in infrastructure. Hu returned in 2009 to strengthen oil ties and commemorate the opening of a cement plant in Saudi Arabia.
This period was also marked by significant Chinese involvement in Saudi infrastructure projects. Starting in 2007, a memorandum of understanding (MoU) allowed Chinese companies to tender directly for contracts in Saudi Arabia. According to the China Global Investment Tracker, the value of Chinese construction contracts in Saudi Arabia reached nearly $16 billion between 2005 and 2013.
Notable projects included the 2009 Mecca-Medina-Jeddah railway, constructed in part by the China Railway Construction Corporation, to transport pilgrims during Hadj. The Chinese took on the Makkah railway project at a financial loss because the initial Chinese bidders couldn't manage it, and the project was considered too politically significant to fail. Specifically, this refers to the Al Mashaaer Al Mugaddassah Metro Line, part of the Makkah Metro system. In November 2010, the China Railway Construction Corporation Limited (CRCC) reported losses amounting to 4.15 billion yuan (approximately $600 million) on the $1.77 billion contract, primarily due to client-driven changes that significantly increased the earthworks from 2 million to 5 million cubic meters.
Also in 2012, a Chinese company helped build the Middle East’s largest power plant north of Jeddah. In 2009, China’s Sinoma International Engineering Co. was involved in doubling the capacity of Riyadh’s Cement Company.
Although China announced the Belt and Road Initiative (BRI) in 2013, the big push in China and Saudi Arabia to advance their mutual relations happened in phase three after the ascendance of King Salman to the throne in 2015 and continues into the present. During this period, China aligned its strategy to meet the needs of Saudi Arabia, as illustrated in Vision 2030.
China’s Local Alignment Strategy in Saudi Arabia
The BRI is a major Chinese infrastructure project designed to connect China with the world through an extensive network of highways, railways, seaports, energy pipelines, and industrial zones. In 2015, China introduced the Digital Silk Road (DSR) to enhance global digital connectivity by investing in foreign digital infrastructure such as next-generation cellular networks, fiber optic cables, and data centers. The DSR also involves developing advanced technologies like satellite navigation systems, artificial intelligence, quantum computing, and smart cities, as well as promoting e-commerce via digital free trade zones.
Beyond its oil needs, China views Saudi Arabia as a crucial link to the Eurasian region and a hub connecting China with the African market. To integrate Arab states into this framework, President Xi Jinping announced the “1+2+3” formula strategy at the 2014 China-Arab States Cooperation Forum. This strategy identifies energy as the core of cooperation, supported by infrastructure construction and trade and investment as layer two for cooperation. The “three breakthroughs” refer to future collaborations in nuclear energy, new and clean energy, and aerospace.
China’s BRI serves as the overarching framework for the “1+2+3” strategy and was detailed in China’s Arab Policy Paper, released shortly before Xi’s visit to Saudi Arabia in January 2016. The paper proposed expanding cooperation with Arab countries, especially Saudi Arabia, in areas including politics, energy, infrastructure, space, nuclear energy, finance, social development, and security. The paper also emphasized that the one-China principle is essential for China to establish and develop relations with Arab states and regional organizations.
Xi’s 2016 visit to Saudi Arabia elevated the bilateral relationship to a Comprehensive Strategic Partnership and established the Sino-Saudi High-Level Joint Committee (HLJC) to develop a cooperation plan. Headed by Crown Prince Mohammed bin Salman and China's premier Zhang Gaoli, the committee was responsible for discussing strategic cooperation and decisionmaking.
The chance to synergize China’s proposed cooperation model with Saudi Arabia’s priorities emerged in April 2016 when the kingdom unveiled its Vision 2030. This initiative seeks to position Saudi Arabia as a global investment powerhouse and diversify its economy beyond oil by boosting non-oil industries. Key aspects of the vision include advancing technological innovation in artificial intelligence, renewable energy, and biotechnology; developing top-tier infrastructure for transportation, logistics, digital connectivity, and tourism; allocating half of the defense budget to local industries; improving social development in areas such as quality of life, education, healthcare, and women’s empowerment; and promoting environmental sustainability by strengthening protection measures and transitioning to a low-carbon economy.
China immediately endorsed Saudi Arabia’s Vision 2030, recognizing the potential for alignment with the BRI and framing its own proposals in the context of the Saudi vision. In September 2016, Li Huaxin, the Chinese ambassador to Saudi Arabia, stressed the importance of enhancing interactions between the BRI and Vision 2030. During King Salman’s 2017 visit to China, Xi supported Vision 2030 and committed to backing its implementation. Chinese experts also argue that the BRI’s goals align well with Vision 2030's objective to diversify Saudi Arabia’s economy.
In 2019, during the third High-Level Joint Committee meeting, then Chinese vice premier Han Zheng, now vice president, who headed a leading group to promote the BRI, proposed a four-point plan to deepen the synergy between the BRI and Vision 2030, aiming to bolster cooperation in energy, infrastructure, finance, and high technology.
The push to frame and align priorities and programs between the BRI and Saudi Arabia’s Vision 2030 primarily occurred through high-level meetings between the leaders of the two countries. During King Salman’s 2017 visit to China, the two nations signed fourteen agreements worth $65 billion, encompassing sectors including energy, education, and space science. Starting in August 2016, the High-Level Joint Committee (HLJC) meetings began developing cooperation strategies based on the BRI and Vision 2030. This lead to the establishment of subcommittees and designated entities to facilitate bilateral cooperation in specific areas. These subcommittees focus on political and diplomatic affairs, BRI-related infrastructure, investment, and energy cooperation, trade and investment, culture, technology, and tourism, security and counterterrorism, and finance and economy.
In each HLJC subcommittee meeting, China committed to participate in projects related to Vision 2030. For instance, at the second HLJC meeting in Riyadh in 2017, the two countries agreed to establish a joint investment fund and a “Saudi Silk Road company for industrial services” to boost investment in the kingdom’s Jizan Province. During Crown Prince Mohammed bin Salman’s visit to China in 2019, the two countries inked thirty-five economic cooperation agreements totaling $28 billion, covering renewable energy, manufacturing of electric control devices, wind turbine structures, turbine blades, and wind generators, and licensing four Chinese companies to operate in Riyadh. During Xi’s visit to Riyadh in December 2022, Saudi and Chinese firms signed thirty-four deals worth $30 billion, targeting investments in green energy, information technology, cloud services, transport, construction, and other sectors.
The impact of Vision 2030 on China’s engagement with Saudi Arabia is evident from the financial data. Between 2005 and June 2024, China’s total investment in infrastructure projects in Saudi Arabia amounted to $53.85 billion, with the majority ($31.45 billion) allocated between 2016 and 2024. In terms of investments, China’s total expenditure in Saudi Arabia from 2005 to June 2024 reached $13.93 billion, with $9.02 billion invested from 2019 to June 2024. These figures demonstrate that a significant portion of China’s infrastructure projects and investments in Saudi Arabia have been focused on supporting the realization of Vision 2030 (refer to tables 2 and 3 for detailed breakdowns).
Renewable Energy as a Showcase
As tables two and three illustrate, energy remains the central sector for cooperation between China and Saudi Arabia, primarily because 40 percent of China’s total oil imports come from Arab countries, with Saudi Arabia being the largest supplier. However, the focus on energy cooperation has expanded to include investments in renewable energy, reflecting a more diversified approach.
For instance, Vision 2030 prioritizes investment in renewable energy as one of its key objectives. Its goals are to promote sustainable development, diversify energy sources, reduce domestic oil consumption, foster a thriving renewable energy industry to create new jobs, lower carbon emissions, and ensure Saudi Arabia remains a significant player in the global energy market.
To achieve these aims, Saudi Arabia established the Renewable Energy Project Development Office (REPDO) in 2017 to oversee the National Renewable Energy Programme (NREP), launched in 2016. In 2019, REPDO outlined plans for the kingdom to develop 58.7 GW of renewable energy capacity by 2030, which will be installed at thirty-five different sites across the country. In 2021, Saudi Arabia declared that it planned to invest $16 billion in renewable energy. Furthermore, according to Prince Abdul Aziz bin Salman, the energy minister, Saudi Arabia plans to produce 50 percent of its electricity from renewable sources by 2030.
China’s strategy for aligning with Saudi Arabia’s renewable energy plan involves four key approaches:
- direct investment
- construction and procurement contracts
- localization of the renewable industry within the kingdom
- co-investment in third countries
In terms of investment, China’s Silk Road Fund acquired a 49 percent stake in Saudi Arabia’s ACWA Power Renewable Energy Holding (ACWA Power RenewCo). In 2023, ACWA Power RenewCo was carrying out five projects under the NREP, with a total capacity of 8 GW and over $6 billion in investments from Saudi Arabia’s Public Investment Fund (PIF) and its partners. ACWA Power’s solar portfolio in the kingdom exceeded 12 GW of combined photovoltaic (PV) capacity. Additionally, ACWA Power RenewCo owns concentrated solar power (CSP), solar photovoltaic (PV), and wind assets across the United Arab Emirates, South Africa, Jordan, Egypt, and Morocco.
Regarding renewable energy contracts, China Solar (Zhejiang), in partnership with the Indian company Mahindra Susten, was responsible for the engineering, procurement, and construction of the $292 million, 300-megawatt Sakaka Solar Project in Al Jouf Province. Chinese companies, such as Huawei, supplied the FusionSolar 1500 Volt Smart PV Solution and multiple maximum power point tracker string inverters for this project. In 2019, the Saudi National Renewable Energy Program signed a MoU with China’s LONGi Solar and South Korea’s OCI to conduct a feasibility study for building a $2 billion solar and carbon black integrated complex. In July 2024, the Chinese companies Jinko Solar Co. and TCL Zhonghuan Renewable Energy Technology Co. signed agreements with the PIF and Vision Industries, a Saudi private company, to build solar plants in the kingdom with a production capacity of 30 gigawatts. These agreements are valued at $3 billion.
As for the localization of the renewable energy industry in Saudi Arabia, in July 2024, China’s Envision Energy entered into a joint venture with the PIF and the Saudi manufacturer Vision Industries, a private company, to build a turbine factory in the kingdom. This initiative aims to boost wind power growth throughout the Middle East. Saudi Arabia also signed two other joint ventures with Chinese companies to manufacture and assemble equipment and components for solar power. Furthermore, LONGi Solar, a leading Chinese firm in renewable energy, entered into a strategic partnership with King Abdullah University of Science and Technology to foster innovation in solar energy, focusing on advancing the efficiency and reliability of innovative photovoltaic (PV) technologies.
Finally, co-investment in third countries has become a pivotal element of China’s strategy to align with Vision 2030. For instance, in 2022, during Xi’s visit to Uzbekistan, the Silk Road Fund acquired a 49 percent stake in a $1 billion gas-fired power plant from the Saudi operator ACWA Power. Furthermore, in 2024, ACWA Power sold 35 percent of its shares in two wind project subsidiaries to China Southern Power Grid International for $158.87 million.
How Riyadh Has Encouraged China’s Alignment Strategy
Saudi leaders have actively supported China’s efforts to align with Vision 2030, frequently discussing the cooperation between the two initiatives, avoiding the political lines of friction with China, encouraging cultural and people-to-people cooperation, and advancing investment in China. For instance, during his January 2022 visit to China, Faisal bin Farhan, the Saudi minister of foreign affairs, expressed a willingness to integrate Vision 2030 with China’s BRI. He reiterated this commitment during a March 2022 meeting with China’s Foreign Minister, Wang Yi, on the sidelines of the Organization of Islamic Cooperation (OIC) session in Islamabad, stating Saudi Arabia’s readiness to deepen this alignment and expand cooperation across various sectors. Similarly, Mohammad Yosof Alaidaroos, head of the Saudi delegation to the UNESCO World Heritage Committee, highlighted the role of Vision 2030 and the BRI in promoting sustainable development and national progress.
Politically, Saudi leaders have removed barriers that could hinder China’s advancing relations with the kingdom by aligning with China’s positions on internal issues. For example, in July 2019, Saudi Arabia, along with ambassadors from thirty-seven other countries, signed a letter to the UN Human Rights Council supporting China’s policies towards the Uyghur Muslim minority in Xinjiang. A year later, the kingdom also supported China’s national security law for Hong Kong at the United Nations. Crown Prince Mohammed bin Salman, during his visit to China, stated Saudi Arabia’s opposition to interference in China’s internal affairs under any pretext. Similarly, in 2022, Foreign Minister Faisal bin Farhan expressed firm support for the “one China” principle and China’s stance on Hong Kong, Xinjiang, and human rights issues during his visit to China. Additionally, at the December 2022 Arab-Chinese Summit in Riyadh, Saudi Arabia advocated for Arab countries to endorse China’s position on Taiwan. To further solidify ties with Beijing, Riyadh also joined the China-led Shanghai Cooperation Organization as a dialogue partner.
The kingdom has taken multiple steps to enhance cultural cooperation with China, seeking to attract Chinese tourists and bolster economic and political ties. Vision 2030 identifies tourism as a key potential source of income, expected to contribute up to 10 percent of Saudi Arabia’s GDP. The plan includes attracting 150 million tourists by 2030, with a goal of 3 million visitors from China. To support this goal, Saudi Arabia has integrated Chinese language instruction into the curriculum of over 700 high schools and established Chinese language departments in universities such as King Saud University. Additionally, an educational agreement was reached with China to exchange language teachers and send 800 Saudi students to China by 2028. Saudi Arabia also launched the Prince Mohammed bin Salman Award for Cultural Cooperation with China and partnered with 700 Chinese entities, including digital platforms like Trip.com and WeChat, to attract Chinese tourists. The kingdom has also simplified visa policies and procedures for Chinese nationals. It should be noted here that during Xi’s visit to Saudi Arabia in 2022, China decided to designate the kingdom as a tourist destination for Chinese group travelers.
Finally, Saudi Arabia has boosted its investment in China. For example, during Crown Prince Mohammed bin Salman’s visit to China in 2019, Saudi Arabia’s state-owned oil company, Aramco, signed a deal to develop a $10 billion petrochemical refinery with two Chinese firms, making it the largest joint venture in China. Aramco and the Saudi Basic Industries Corporation have strengthened their growing downstream presence in China through partnerships with state-owned enterprises and private firms. According to Dongmei Chen, a Chinese scholar at the King Abdullah Petroleum Studies and Research Center, the total capital expenditures of Saudi-invested petrochemical projects in China will reach $35 billion, with a total projected output of 21.7 million tons by 2025.
Looking Ahead
Over the past decades, the Saudi Arabia-China relationship has evolved from peripheral interactions into a comprehensive strategic partnership that spans multiple sectors, including energy, infrastructure, and technology. China’s alignment strategy with Vision 2030 is marked by substantial investments and contracts, particularly in renewable energy, which reflects a commitment to supporting the kingdom’s ambitious goals for economic diversification and sustainable development. By localizing industries and investing in cutting-edge technologies, China is aiding Saudi Arabia in reducing its oil dependency and solidifying its presence in the Middle East.
Conversely, Saudi Arabia’s active support for China’s BRI highlights the kingdom’s desire to integrate more deeply with the global economy. By removing political barriers, enhancing cultural exchanges, and boosting investments in China, Saudi Arabia is encouraging China to continue its support for Vision 2030.
The synergy between the BRI and Vision 2030 underscores a forward-looking partnership poised to redefine regional dynamics. As both nations continue to deepen their ties, their cooperation serves as a model for how strategic alignment can foster economic growth, technological advancement, and cultural understanding. This evolving partnership not only strengthens bilateral relations but also sets the stage for future collaborations that can impact global economic and political landscapes.
