Newsletter: China-Middle East

🇨🇳🇸🇦 Saudi Arabia reassures China ahead of Trump visit

Joyce Karam
Joyce Karam
May 1, 2025

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The highly anticipated May 13-15 visit by President Donald Trump to Saudi Arabia, Qatar and the United Arab Emirates is expected to feature plenty of fanfare, gold-studded displays and a lineup of Gulf investments aimed at impressing the 47th president.

But thematically — and on Trump’s biggest foreign policy challenge of curbing China’s rise — don’t expect the Gulf states to give away much, especially when it comes to trade and investment.

Saudi Arabia made that clear this week by signing major joint ventures with Chinese companies ahead of the visit.

Let’s dive right in!

Thanks for reading,
Joyce (sign up on LinkedIn or online here)

Leading this week

Yes, Trump gets high marks from the Saudi leadership. His first term saw a strong affinity with Crown Prince Mohammed bin Salman, a boost in defense deals and support for the de facto Saudi leader through the international crisis following the killing of Saudi columnist Jamal Khashoggi.

His second term is seeking to double down on trade and investment ties with the kingdom, offering Saudi Arabia an arms package worth over $100 billion, sources tell Reuters. The Trump administration is also reviving talks with Saudi Arabia on nuclear energy to develop a commercial nuclear power industry and potentially enrich uranium. The process could, however, face congressional opposition.

But on Trump’s biggest foreign policy challenge — curtailing China’s rise — don’t expect Riyadh to budge in any significant way. That relationship carries its own set of benefits and leverage for the kingdom.

And if this week is any indication, Saudi Arabia — much like other Gulf states — has learned to hedge its bets and diversify away from US dependency.

➡️ On Monday, as Jack Dutton reports, Chinese state-run oil giant Sinopec announced an agreement with Saudi counterpart Aramco to establish a joint venture with a registered capital of 28.8 billion yuan ($3.95 billion). Sinopec and its subsidiary will contribute 7.2 billion yuan ($987 million) and 14.4 billion yuan ($1.97 billion) in cash, respectively, while the remaining 25% of the capital will come from AAS, the statement said.

➡️ On Wednesday, Saudi Arabia awarded another Chinese joint venture a $1.13 billion contract to relocate utilities and administration offices for Riyadh's King Saud University to Diriyah. The contract was awarded by the Diriyah Company to a joint venture between China Railway Construction Corporation Limited Saudi Branch and China Railway Construction Group Central Plain Construction Co. Ltd.

What is the Saudi rationale behind these moves?

Well, basic economics: 

  • Since the crown prince launched Vision 2030 in 2016, China has deeply integrated its economic leverage in helping to implement it, especially in the fields of renewables, infrastructure and investment. According to the Financial Times, China has become the leading source of greenfield foreign direct investment in Saudi Arabia, investing $21.6 billion from 2021 to October 2024, primarily in clean technologies.
  • China has been Saudi Arabia’s largest trading partner since 2013, with trade exceeding $100 billion in 2023.
  • In the last two years, China has been by far the largest buyer of Saudi oil — surpassing India, Japan, the United States and others.

Economically, don’t count on Saudi Arabia decoupling from China to please Trump. On the contrary, the economic instability caused by Trump’s tariffs is hurting the Saudi oil market, scrambling supply chains and making it more dependent on China. 

Politically, Saudi Arabia has learned through decades of turbulence in US policy, from the Iraq war to the withdrawal from Afghanistan, not to put all its eggs in one basket. Its approach to the Trump visit is no different, with a clear message that America's Gulf partners now have options. 

Photo of the week

Saudi Crown Prince Mohammed bin Salman visits the Great Wall of China in February 2019. (Saudi Press Agency)

Deals and visits ✈️

  • Syrian foreign minister meets with China’s UN ambassador in New York
  • Egypt’s investment authority hosts Egypt-China forum
  • Saudi Arabia, China sign MoUs on education
  • Algerian energy minister meets with president of China’s National Nuclear Corporation
  • Saudi Aramco and China’s Sinopec agree to establish $3.9 billion JV
  • China calls on Israel to stop attacks on Syria and Lebanon
  • Investment seminar of China-Arab States Cooperation Forum opens in Haikou
  • China’s JA Solar to develop $564 million solar power project in Oman
  • De facto leader of Sudan and commander of the Sudanese Armed Forces receives China’s ambassador to Sudan
  • Saudi Aramco signs joint development agreement with China's BYD
  • Iranian foreign minister heads to Beijing ahead of third round of US-Iran nuclear talks
  • China, Saudi Arabia pledge to deepen nuclear security cooperation
  • Egypt signs MoU with Chinese diagnostics firm for health care collaboration
  • Oman, China hold strategic consultations
  • UAE’s ADNOC signs LNG deal with China National Offshore Oil Company
  • Kuwait and China sign maritime cooperation agreement
  • Saudi, Chinese cargo airlines sign MoU to expand cooperation
  • Gulf exchange market GME and Chinese exchange SHFE sign cooperation agreement

Thanks to Al-Monitor's Rosaleen Carroll for helping with this section. 

 

What we are reading​​​

  • China to lift sanctions on EU lawmakers to unlock trade talks (Politico)
  • China deploys NGOs to quash criticism at UN organizations in Geneva (Washington Post)
  • Can Modi leverage Saudi-China ties to reshape India’s global standing? (Al-Monitor)