Saudi Arabia has signed more than 30 economic cooperation agreements with China worth a total of 28 billion U.S. dollars at a joint investment forum in Beijing on Friday.
The multi-billion-dollar deals cover a broad spectrum of sectors, including marine transportation, manufacturing, energy and finance, and the most eye catching of the agreements is one that would create the largest ever joint venture between China and foreign countries.
Saudi Arabia’s state-owned Aramco and Chinese conglomerate Norinco will jointly develop a refining and petrochemical complex in the northeastern Chinese city of Panjin. The project is worth more than 10 billion U.S. dollars.
Once up and running, Aramco will develop a 300,000 barrel-per-day refinery, alongside Chinese partners. The Saudi producer will have a 35 percent interest in the new firm, while China holds the rest. This cooperative mega-project is expected to begin operations in 2024.
China-proposed Belt and Road Initiative is very much in line with the kingdom’s Vision 2030. It is an economic reform plan introduced by Crown Prince Mohammad bin Salman in 2016. It aims to reduce the kingdom’s dependence on oil by diversifying its economy in other public service sectors such as education, culture, infrastructure and tourism.
The vision has 3 main pillars: the status of the country as the “heart of the Arab and Islamic worlds”; the determination to become a global investment powerhouse; and finally to transform the country’s location into a hub connecting 3 continents Asia, Europe and Africa.
Here in Beijing, China and Saudi Arabia agreed to further boost financial cooperation. They will also beef up settlement in local currencies and cross-border bond issuance, as well as encourage their financial institutions to expand businesses in each other’s markets, which signals that Saudi Arabia has an eye towards a post-oil era.