By Alessandro Arduino, Principal Research Fellow, MEI-NUS

The media’s feverish speculation that Chinese President Xi Jinping would visit Saudi Arabia soon telegraphs increasing worldwide interest in Beijing’s designs on the Middle East. While it appears increasingly likely that such a trip will not happen soon – or at least not before the Chinese Communist Party’s National People’s Congress on 16 October – much has been written about how Saudi Arabia will pull out all the stops for such a visit.

This compares with the lukewarm welcome for United States President Joe Biden when he made a trip to the Kingdom in July. The cool reception was probably a result of lingering unhappiness over Mr Biden’s earlier promise to make Saudi Arabia a pariah state over the killing of journalist Jamal Khashoggi. Realpolitik, however, forced the US President to walk back that promise and instead go to Riyadh with hat in hand to enlist the Saudis’ help in a bid to keep oil prices from spiralling.

China has not been sitting idly while Mr Biden stuck to his guns in the first year of his presidency. Beijing has been increasing its geo-economic penetration in the region well before the US began resizing its military footprint there. While many have been focused on the Belt and Road Initiative, it is the Digital Silk Road that is Beijing’s preferred mode of increasing its clout in the Gulf.

China offers a one-stop shop for fibre optic and satellite high-speed Big Data transfer, AI technologies, and cloud computing, including the facial recognition and crowd control technologies that are a favourite of authoritarian regimes. While the West has been obsessed about whether China aims to widen its security footprint in the region, Beijing has been quietly laying the groundwork for just such a move – but without stirring up much dust.

For now, China has not flexed its hard power credentials. Instead, its primary weapon has been monetary largesse. It has been making big investments all over the Gulf, waiting for the right time to use this as political capital. The country is Saudi Arabia’s top trade partner, and the biggest market for its oil. For example, Aramco, the Saudi Arabian Oil Company, has increased its cooperation with China Petroleum & Chemical Corporation (Sinopec) on multiple fronts in the energy domain. The ongoing collaboration is not limited to natural resources, and supports the Saudi shift towards a knowledge economy based on Chinese high-tech. For instance, Aramco investment fund Prosperity7 Ventures has acquired an important position in Chinese high-tech start-ups such as Jaka Robotics, a firm specialising in collaborative robots.

A visit by Mr Xi – if it happens – will peel back the curtain on China’s ambitions. In addition to the usual economic and security cooperation agreements that characterise state visits, it will be noteworthy to see if Beijing will push to pay for Saudi oil with the yuan. Another area worth watching is whether it will drum up support for greater use of the Chinese central bank digital currency (CBDC), better known as E-yuan, as is slowly happening in the United Arab Emirates’ fintech sector. A Chinese digital currency cross-border payment system for Saudi oil could smooth the way for the yuan to become an alternative to the US Dollar, and a means to avoid using the Swift mechanism for financial transactions.

Beijing’s push to expand its influence in Saudi Arabia is not limited to using its economic power. A charm offensive is unfolding as well. Unlike the US, China does not lecture the Saudis. In return, Riyadh has stayed silent on the issue of Muslims in Xinjiang. Meanwhile, it gets backing from the Asian superpower on several issues at the United Nations, including the ongoing conflict in Yemen. As Crown Prince Mohammed bin Salman embarks on visits to France and Greece – among others – to boost his credentials, the China-Saudi Arabia embrace grows tighter.

Whether or not Mr Xi visits Saudi Arabia soon, the signs are clear that Beijing is sharpening its Middle East policy. The recent trips by Chinese Minister of Foreign Affairs Wang Yi to the Gulf,  Iran, and Turkey underscores this effort. This sharpening is necessary as China seeks to do the impossible: Insert itself as a powerbroker in the Middle East without getting entangled in its messy and dangerous politics.

Image Caption: President Xi Jinping delivering a video address at BRICS Foreign Ministers’ Meeting (Photo: Ministry of Foreign Affairs, the People’s Republic of China)

About the Author

Dr Alessandro Arduino is the Principal Research Fellow at the Middle East Institute (MEI), National University of Singapore. He is the Co-director of the Security & Crisis Management International Centre at the Shanghai Academy of Social Science (SASS) and an Associate at Lau China Institute, King’s College London.

His two decades of experience in China encompasses security analysis and crisis management. His main research interests are sovereign wealth funds, private military/security companies and China’s security and foreign policy primarily in the regions of China, Central Asia, the Middle East and North Africa.

Alessandro is the author of several books. He has also published papers and commentaries in various journals in Italian, English and Chinese. His most recent book is China’s Private Army: Protecting the New Silk Road (Palgrave, 2018). He has been appointed Knight of Order of the Star of Italy by the president of the Italian Republic.