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**http://www.arabnews.com/?page=1§ion=0&article=76684&d=23&m=1&y=2006
Monday, 23, January, 2006 (23, Dhul Hijjah, 1426)
Abdullah Gets Warm Welcome in China
Khaled Almaeena
King Abdullah with members of the Saudi civil society delegation,
concurrently visiting China, at his residence in Beijing on Sunday. (SPA)
BEIJING, 23 January 2006 - Custodian of the Two Holy Mosques King
Abdullah arrived here yesterday morning to a warm welcome by high-ranking
Chinese officials. The Chinese said they were honored by the royal visit, the
first by a Saudi king to Beijing since the two countries established diplomatic
relations in 1990.
The morning weather in Beijing was cold and windy but the warmth of
Saudi-Chinese relations made the occasion lively and enthusiastic. Chinese
officials were optimistic that the landmark visit would take Sino-Saudi
relations to new heights.
On arrival at the airport, King Abdullah was greeted by Foreign Minister
Li Zhaoxing and other top officials. The king is scheduled to meet Chinese
President Hu Jintao today and informed sources said the summit talks would
focus on energy and security.
The two leaders are also expected to discuss major regional and
international issues, including Iraq, Iran and Palestine in addition to the
global fight against terrorism.
King Abdullah earlier met with members of the Saudi civil society
delegation currently visiting China and praised their efforts in strengthening
relations between the two countries. He urged the delegation to continue its
endeavors to educate the Chinese people on various aspects of Saudi life and
culture.
The delegates, headed by Dr. Abubakr Bagader, adviser to the minister of
culture and information for foreign relations, briefed the king on their
activities in China which included visits to research centers, museums and
libraries and meetings with businessmen and academics.
King Abdullah is accompanied by a high-level delegation including Foreign
Minister Prince Saud Al-Faisal, Chief of Intelligence Prince Muqrin, Labor
Minister Dr. Ghazi Al-Gosaibi, Petroleum and Mineral Resources Minister Ali
Al-Naimi, Finance Minister Dr. Ibrahim Al-Assaf and Culture and Information
Minister Iyad Madani.
Chinese Foreign Ministry spokesman Kong Quan said bilateral trade rose by
39 percent to $14 billion between January and November 2005. He said China had
imported 20.1 million tons of oil from Saudi Arabia during that period. Beijing
imports about 450,000 barrels of Saudi oil daily which is about 14 percent of
its total oil requirements.
Saudi Arabia has already offered investment projects worth $624 billion
to foreign investors in the vital sectors of petrochemicals, gas, electric
power generation, telecommunications, desalination and railways. It has also
softened regulations in an attempt to attract foreign investment.
Chinese firms won bids for construction contracts valued at several
billion dollars in the Kingdom last year. The contracts were for projects
including cement production, telecommunications, infrastructure and others.
Saudi Aramco joined ExxonMobil and China's top refiner, Sinopec, in signing a
$3.5 billion deal to expand a refinery in the southeastern Chinese province of
Fujian.
The Saudi firm is also in talks with Sinopec about investing in a plant
in the northern city of Qingdao, the semi-official China News Service said. The
agency quoted unidentified industry officials as saying China wanted to
increase Saudi crude oil imports under fixed-term deals to limit the impact of
price volatility.
Saudi ambassador to China, Saleh Al-Hujeilan, underlined the importance
of the royal visit, adding that it would become a significant milestone in
developing friendly relations between the two countries. As two important
nations, China and Saudi Arabia will open new areas of cooperation and continue
to strengthen exchanges in diplomacy, economy and trade, the ambassador said.
"Closer contacts and cooperation between the two countries will surely exert a
great influence on international society," he added.
During his visit, the king will exchange views with Chinese leaders on
further expanding bilateral cooperation in economic and trade areas, said
Al-Hujeilan, adding that it would also witness the signing of agreements. "We
are looking forward to more and more cooperation between the two nations," he
added.
King Abdullah will arrive in New Delhi tomorrow on the second leg of his
Asian tour, which will also take him to Malaysia and Pakistan. Abdullah is the
first Saudi king to visit India in 50 years.
In an interview with India's NDTV channel, King Abdullah urged India and
Pakistan to settle their differences peacefully. He also suggested that India
be given observer status at the Organization of the Islamic Conference.
In his wide-ranging interview, the king said Saudi Arabia would maintain
its strong relations with the United States. "We have had historic ties with
the US and they will remain so," he said.
King Abdullah agreed that the present oil prices were too high and should
be brought down to moderate levels. "The (current) price is damaging to
developing countries that subsequently have to suffer. The price needs to be at
a moderate level," he said. He also offered to meet India's future energy
requirements.
++++
http://www.arabnews.com/?page=7§ion=0&article=76692&d=23&m=1&y=2006
Monday, 23, January, 2006 (23, Dhul Hijjah, 1426)
Saudi-Chinese Relations: Energy First, but Not Last
Abdulaziz Sager, Arab News
China neither has strong historical ties with no long-term strategic
interests in the Gulf and Middle East. Yet, its relationship with the region
has assumed dynamic proportions, chiefly due to its energy requirements to feed
its thriving economy.
China is now the second largest oil importer in the world, accounting for
12 percent of the world's energy consumption, with a third of its supply coming
from abroad. The International Energy Agency (IEA) predicts that over the next
25 years, Chinese industry is expected to account for over 20 percent of growth
in world energy demand. China currently imports 32 percent of its oil, a figure
that is likely to double over the next five years. Its gas imports are
projected to increase from zero in 2000 to 20-25 million cubic meters by 2010.
If it is energy that is forcing China to look toward the Gulf, it is oil
again that is engaging the Gulf with China. For example, Iran and Saudi Arabia
together now account for almost two-thirds of China's Middle East oil imports.
This coincides with the Gulf considering East as a preferred market and
investment destination. The commercial aspect has also been enhanced as an
indirect result of Sept.11, with the Gulf producers finding that the suspicion
and scrutiny that greets Arabs in the West does not exist to the same degree in
Asia.
But the partnership between China and the Gulf Cooperation Council (GCC)
countries is mutually beneficial due to other reasons too. First, both have
come to terms with the need for greater liberalization and are positioning
themselves to take advantage of a globalized business environment.
Second, China has expanded into the oil services sector in the region by
signing almost 3,000 contracts worth $2.7 billion in the GCC countries since
2001. China's growing economic ties with the GCC countries have included a
Framework Agreement on Economic, Trade, Investment, and Technological
Cooperation in 2004 and negotiations for a China-GCC free trade zone.
Finally, China is scouting for nonenergy raw materials to feed its
industries, thereby expanding its investment portfolio in the region. It is in
this context that the visit to China of Custodian of Two Holy Mosques King
Abdullah from Jan. 22-24 assumes significance. This is the first-ever trip to
China by a Saudi king since the two countries established diplomatic links in
1990. More significantly, this will also be the first official visit to another
country by King Abdullah since he ascended the throne.
Saudi Arabia is China's No. 1 trading partner in the Middle East and is
poised to maintain it. China hopes to increase bilateral trade with Saudi
Arabia from about $15 billion in 2005 - up from $5 billion in 2002 - to $20
billion in 2010. The Kingdom shipped crude oil worth $4 billion to China in
2004. The Saudi share of Chinese oil imports is sure to grow, especially since
Beijing aims to stockpile up to 100 million barrels of petroleum - one month's
consumption.
Topping the list of Chinese exports to the Kingdom are cars, textiles,
processed and packaged foods, heavy industrial equipment and electrical
products. Demand for cement is also high in Saudi Arabia with the government
spending heavily on infrastructure projects.
Throughout the 1990s, Beijing cultivated its relationship with Saudi
Arabia, which culminated in the 1999 Strategic Oil Cooperation Agreement. In
return for opening their domestic market to Chinese investment and allowing
China to pursue upstream oilfield activities in the Kingdom, the Saudi
companies have begun participating in China's downstream refining business. In
doing so, China hopes to upgrade its refineries with Saudi finances. With the
Saudi Arabian Investment Authority putting the Kingdom's private sector
investment abroad at about $5 billion annually, China Petroleum and Chemical
Corp. (Sinopec) has held talks with Saudi Aramco for a stake in a $1.2-billion
refinery in Qingdao. Saudi Aramco also joined hands with Sinopec in a
$3.5-billion venture in Fujian province, which involves ExxonMobil too.
At the same time, Saudi Arabia plans to export LNG to China. As part of
opening its potential holdings to private Chinese exploration, a contract to
explore and produce natural gas in the Rub Al-Khali Basin in Saudi Arabia has
been signed. Saudi officials desire to diversify their exports beyond oil, to
include gas, bauxite and phosphates.
While some assert that the energy deals are simply a result of mutual
economic interests, others argue that they stem from new strategies in both
Riyadh and Beijing. In fact, Saudi motives combine economic with political
purposes; Saudi Aramco now does almost half its business in Asia and has more
offices there than anywhere else in the world. As part of this plan, Riyadh
seeks to expand its share in China. Although it already supplies 17 percent of
China's oil imports, this is proportionally less than what Saudi Arabia sells
to other Asian markets.
This does not mean that there are no potential problems that could
negatively impact the relationship. For example, the two countries must
consider the Xinjiang factor - the mineral-rich province is home to 7.2 million
Uighurs, who are Muslims and have been subject to the government-led war
against terror. Following the Chinese government's harsh response to the 1997
Uighur riots, Saudi clerics called upon Riyadh to help Chinese Muslims
financially and diplomatically. This kind of instability has necessitated
improved Chinese relations with Muslim countries.
Another aspect of concern is the relationship between China and Iran. The
two share a special affinity that is too close for comfort for the GCC
countries given the lack of confidence between them and Iran.
China's Iraq policy has been ambiguous from the GCC perspective. But in a
break from the past, China has also engaged in hectic conflict resolution since
the beginning of the Iraq crisis. In May 2004, China submitted to the United
Nations Security Council an "unofficial document" offering revision of the
US-UK draft resolution. Though its suggestion for the US-led multinational
force to withdraw from Iraq by January 2005 was not adopted, the resolution and
its emphasis on a larger UN role were in line with the region's views.
The economic ties between GCC and China have also led to closer relations
in the political and security fields. With both sides preferring a faster pace
of economic rather than political reform, the priorities within the
relationship are well calibrated. In this context, Chinese criticism of the US'
anti-terror campaign and democracy plans for the region are in sync with the
governments of the GCC countries.
However, the chief advantage of China's role in the region is its lack of
political baggage. China's agenda may well be dictated by economic interests
and its ideological differences with the US. This can be substantiated by
pointing to China's success in simultaneously preserving good relations with
both Israel and Iran. Since one of the commonalities between the two sides is
the preference for a faster pace of economic reform compared to political
change and because China has criticized the US' anti-terror campaign and
democracy plans - which too go well with the region's beliefs - scope for
better ties between the two sides remains unlimited.
- Abdulaziz Sager is the Chairman of the Gulf Research Center, Dubai.
[Non-text portions of this message have been removed]
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