Xi Inks Deals Worth USD 30 Billion in Saudi Arabia

From 8 to 10 December 2022, Chinese President XI Jinping was on official visit to Riyadh, Saudi Arabia. During the tour, he met with his Saudi Crown Prince Mohammed Bin Salman and also attended the China-Gulf Cooperation Council (#GCC) Summit.

Based on 2021 figures, bilateral trade volume between China and Saudi Arabia stood at USD 80 billion, with the balance heavily tilted by Chinese petroleum purchases.

Twenty agreements were signed with a total value nearing USD 30 billion. Among the deals, China will purchase more oil and gas from Saudi Arabia but China is pushing to have the invoices settled with Chinese Yuan as part of its RMB Internationalization Strategy. Currently, Aramco and Shandong Energy Group are in talks regarding a USD 10 billion investment for a refinery in northeast China.

Saudi Arabia also signed a contract with Huawei to upgrade its #ICT infrastructure. Huawei has deployed the 5G networks in most of the GCC countries and is looking to push its intelligent solutions for the futuristic Neom #SmartCity, valued at a whopping USD 500 billion.

On Friday 9 December 2022, President Xi attended the China-GCC Summit. He invited the GCC countries to take advantage of the Shanghai Petrol and Gas Exchange and to favor RMB-denominated transactions.

Currently, China is the world’s largest hydrocarbon importer and consumer with Saudi Arabia as its top oil supplier. Given the economic weight of China and its continued rise, the challenge of the petrodollar by the petroyuan seems inevitable.