The economic ties between Saudi Arabia and China are a reflection of both countries’ current development. From 1949 until the mid-1970s, interactions between China and the Muslim world were almost non-existent. During the late 1970s, China began its economic reform initiative, which reshaped China’s economy from 1978 to 2000, opening the way for developing the bilateral relations. The relationship between Saudi Arabia and China was improved with the beginning of the twenty-first century. In 2008, the global financial and economic crisis ravaged the United States; this paved the way for further progress in the Saudi-Chinese relationship.
After Saudi Arabia put out its 2030 vision for multilateralism, the movement in Saudi-Chinese relations coincided with the transformation in the global system, which is one of the most essential parts of multipolarity. As a result, China now has more possibilities for being involved in this process.
After China’s openness to the West, the country devoted itself primarily to the acquisition of advanced financial and technological infrastructure. At the time, China was not interested in strengthening its ties to Saudi Arabia and raising the level of the relationship to a strategic partnership. According to Saudi officials, the Chinese economy had nothing to tempt them to create links with it, regardless of China’s significant economic progress made. In terms of the world’s greatest economies, China has yet to make it into the top ten.
There was little trade between the two countries. A mere 1.171 billion riyals, or around 1.5 percent, of Saudi Arabia’s total imports were made in China in 1987. After more than 20 years of economic changes in China, this statistic remained unchanged. Even though China’s volume tripled, China’s share of Saudi imports remained at 3.5%, thus it takes time to create economic ties.
China’s imports to Saudi Arabia doubled in value between 1987 and 1999, rising from 1.2 billion to 3.7 billion riyals. The Saudi’s overall worldwide imports still dwarf this amount, notwithstanding the rise. However, by the end of the nineties, there was an improvement in this relationship. The year 2000 marked the beginning of a major shift in the economic ties between the two countries. There was an increase in bilateral trade that year of more than 1.7 times what it was last year. This is due to an increase in previously unreported Saudi shipments to China. Between 1990 and 2000, exports nearly quadrupled. Saudi’s on-going trade surplus with China can be attributed to this increase in exports.
Economic ties between the United States and Saudi Arabia will be altered significantly. High-level visits, discussions, and exchanges of views between Saudi Arabia and China have created new horizons in bilateral relations, in addition to strengthening economic ties. Globalization has also contributed to the building of trade linkages between all countries, including China and Saudi Arabia. This is also relevant to the World Trade Organization’s principles and the development of a free market economy. The economic ties between the two countries developed dramatically between 2000 and 2007. This is mainly due to the rapid growth of the Chinese economy. Growth in China’s economy has begun to pick up steam, shifting the world’s top economies into a new position. China, which ranked sixth in 2000, surpassed the United Kingdom to take fourth place in 2006. In 2007, it overtook Germany to take third position.
During the period between 2001 and 2007, Saudi Arabia’s exports to China nearly doubled, while imports nearly quadrupled. In the time since 2008, major developments have led to stronger ties between the two countries’ economies, paving the way for future strategic collaboration. After the housing crisis, the financial and economic crisis of 2008 had a significant impact on the development of Saudi Arabia’s ties with China. Because of this tragedy, there was a global economic downturn. Except for China, the rest of the industrialized world’s growth rates were either negative or extremely low throughout this period. China rose from third to second place in the world’s economy between 2007 and 2010, ahead of Japan, which fell from third to fourth.
As of 2010, China’s GDP had overtaken Japan’s, ranking it second in the world’s major economies matrix. By 2028, China is expected to overtake the United States as the world’s most powerful economy.
In terms of bilateral trade exchanges, minerals accounted for nearly eighty per cent of the overall value of Saudi’s top exports to China in 2019. Electrical goods and equipment are among the many items that China exports to Saudi Arabia.
It’s no surprise that Saudi Arabia ranked first and second in terms of oil exports to China in 2019 and 2020, respectively. Last year, China bought more than twice as much oil from Saudi Arabia as Russia did, at 1.69 million barrels per day.
The Chinese grand strategy, based mainly on the Belt and Road Initiative, will not make progress without a solid partnership with the Kingdom of Saudi Arabia. China is a huge powerhouse that depends mainly on trade and industry; therefore, in order for China to survive, it is likely that in the next few years we will witness a qualitative leap in the bilateral relationship between China and Saudi Arabia.