SR2.23 billion ($594 million) in non-oil exports from Saudi Arabia was recorded in May, up 19.25 percent over the same month the previous year, according to official figures.
After the United Arab Emirates and China, which received commodities valued at SR6.06 billion and SR3.62 billion, respectively, China ranked as Saudi Arabia’s third-largest destination for non-oil items in May, according to the General Authority for Statistics.
Reducing Saudi Arabia’s reliance on oil is a key component of the Kingdom’s ongoing economic diversification strategy, which calls for strengthening the non-oil private sector and exporting those items to nations like China.
Saudi Arabia sent out shipments of SR15.91 billion, with China ranking as its top export destination overall, according to the study.
Saudi Arabia’s principal export to South Korea in May was oil, worth SR13.68 billion.
The most recent statistics shows that Saudi Arabia sold chemical items to China for SR851.8 million, followed by plastics and rubber products worth SR876.9 million.
In May, the Kingdom shipped SR103.7 million worth of base materials out of the country, while it also exported mineral products worth SR313.4 million to China.
In May, shipments from China amounted to SR17.55 billion, indicating a 22 percent increase from April, making the Asian country Saudi Arabia’s most significant import partner.
China came in second, followed by the US and the UAE, from which the Kingdom imported items valued at SR6.56 billion and SR4.54 billion, respectively, according to GASTAT.
According to the government, Saudi Arabia imported electrical and mechanical parts from China in May for a total of SR8.23 billion.
In May, the Kingdom imported base metals for SR1.61 billion and transport equipment worth SR2.68 billion, respectively.
In addition, Chinese imports into the Kingdom were SR961.8 million in artwork and antiquities, SR806.7 million in plastic products, and SR792.4 million in textiles.
In May, SR479.5 million worth of chemical products were imported by Saudi Arabia, and SR118.4 million worth of leather, fur, and handbags were shipped into the Kingdom from China.
A Flourishing Partnership
Strong bilateral ties have long existed between China and Saudi Arabia; since 2001, the Kingdom has been China’s top Middle Eastern commercial partner, with bilateral trade expected to reach $107.23 billion in 2023.
In addition to the Belt and Road Initiative, the Kingdom and China are strategic partners in the energy and financial sectors.
The Chinese government claims that Saudi Arabia provides one barrel of crude oil for every six that China imports, and that the Asian country accounts for one Saudi riyal out of every seven SR that the Kingdom receives in export earnings.
Speaking highly of the two nations’ trade and economic cooperation in May, Saudi Finance Minister Mohammed Al-Jadaan stated that they have continued to have positive cooperative communication within the framework of the High-level Chinese-Saudi Joint Committee’s Economic and Financial Subcommittee.
Al-Jadaan also mentioned how bilateral trade between the two nations has increased 31-fold since 1990. He also mentioned how recent years have seen a sharp increase in outbound investment from China into Saudi Arabia, making the Asian country a crucial ally for the Arab nation as it pursues its goals of economic transformation.
The People’s Bank of China and the Kingdom’s Central Bank, generally known as SAMA, signed a local currency swap arrangement for SR26 billion ($6.93 billion) in November 2023 as their political and economic ties continue to grow.
Following the agreement, SAMA declared that it will support the use of local currencies, boost trade and investment between Saudi Arabia and China, and enhance financial cooperation between the two nations.
Significant Developments
There were a number of significant events in the first half of this year that could improve Saudi Arabia and China’s bilateral, commercial, and economic ties.
The goal of the six agreements totaling $50 billion that Saudi Arabia’s national wealth fund inked earlier this month with leading Chinese financial organizations was to increase bilateral capital flows.
The China Construction Bank, Agricultural Bank of China, China Export and Credit Insurance Corp., Bank of China, Export-Import Bank of China, and Industrial and Commercial Bank of China all signed memoranda of understanding, according to a news release issued by the Public Investment Fund.
The statement claims that the main goal of these agreements is to make it easier for Saudi Arabia and China to transfer funds back and forth between them using both loan and equity.
During the same month, the Chinese government of Fujian accepted a potential investment agreement with Saudi Basic Industries Corp. to build an engineering thermoplastic compounding factory.
The debut of two new exchange-traded funds in Shanghai and Shenzhen in July, which concentrated on companies from the Kingdom, further reinforced the stock exchange relationship between the two countries.
After raising $87 million, China Southern Asset Management’s first fund, CSOP Saudi Arabia ETF QDII, is listed on the Shenzhen Stock Exchange.
After raising $82.32 million, the second fund, the Huatai-PineBridge managed CSOP Saudi Arabia ETF QDII, began trading on the Shanghai Stock Exchange.
These ETFs made their debut on Chinese exchanges during a period of thriving investor relations between the two countries. In 2023, China ranked as the Kingdom’s largest greenfield foreign direct investor, with investments totaling $16.8 billion, up 1,020 percent from the year before.
The Approved Destination Status agreement, which went into force on July 1, is another way that China and Saudi Arabia are strengthening their tourism-related ties.
The Chinese ADS policy is a bilateral arrangement between governments that permits its nationals to travel in groups to particular foreign locations for tourism.
The choice to incorporate ADS is in line with Saudi Arabia’s objective of drawing 5 million Chinese visitors by 2030, which will be made possible by the addition of new direct flights from Air China, China Eastern, and China Southern to the current Saudia route network.
A second deal was inked in June by the Saudi Tourism Authority and Taiba Investments, a significant real estate and hospitality company in the Kingdom, to create integrated residential ecosystems and a specialized network of hotels that serve Chinese travelers.
Cementing its breakthrough into the Chinese market, Riyadh Air struck an agreement with China Eastern Airlines in the same month, supported by the PIF, to improve future connections and work together on digital transformation.
At the time, Tony Douglas, CEO of Riyadh Air, stated, “Our partnership with Air China, a leading global carrier with a vast network in key Chinese markets, complements Riyadh Air’s ambitious future plans.”
In addition, the agreement covers codeshare agreements, prospective cooperation in frequent flyer programs, interline connections, cargo services, customer experience, and digital innovation.
In terms of culture, the King Abdulaziz Public Library in Riyadh launched a publishing program in August with the goal of introducing Chinese-speaking audiences to Saudi culture.
A number of literary, cultural, and scientific works originally written in Arabic were chosen for translation into multiple languages as part of this effort, including Chinese.
An official statement states that giving Chinese readers a thorough understanding of modern Saudi culture is the initiative’s main goal.
