Saudi Arabia signs Huawei deal, deepening China ties on Xi visit

RIYADH:

Saudi Arabia and China showcased deepening ties with a series of strategic deals on Thursday during a visit by President Xi Jinping, including one with tech giant Huawei, whose growing foray into the Gulf region has raised US security concerns. 

King Salman signed a "comprehensive strategic partnership agreement" with Xi, who received a lavish welcome in a country forging new global partnerships beyond the West. 

Xi's car was escorted to the king's palace by members of the Saudi Royal Guard riding Arabian horses and carrying Chinese and Saudi flags. 

The Chinese leader held talks with Crown Prince Mohammed bin Salman, de facto ruler of the oil giant, who greeted him with a warm smile. The two stepped into a pavilion as a military band played the countries' national anthems. Xi heralded "a new era" in Arab ties.

The display stood in stark contrast to the low-key welcome extended in July to US President Joe Biden, with whom ties have been strained by Saudi energy policy and the 2018 murder of Jamal Khashoggi that had overshadowed the awkward visit. 

The United States, warily watching China's growing sway and with its ties to Riyadh at a nadir, said on Wednesday Xi's trip was an example of Chinese attempts to exert influence around the world and would not change US policy towards the Middle East. 

A memorandum with China's Huawei Technologies [RIC:RIC:HWT.UL], on cloud computing and building high-tech complexes in Saudi cities, was agreed despite US concerns with Gulf allies over a possible security risk in using the Chinese firm's technology. Huawei has participated in building 5G networks in most Gulf states despite US concerns.

Prince Mohammed, with whom Biden bumped fists instead of shaking hands in July, has made a comeback on the world stage following the Khashoggi killing, which cast a pall over Saudi-US ties, and has been defiant in the face of US ire over oil supplies and pressure from Washington to help isolate Russia. 

In further burnishing of his international credentials, Saudi Arabia and the United Arab Emirates said on Thursday that the prince and the UAE president jointly led mediation efforts that secured the release of US basketball star Brittney Griner in a prisoner swap with Russia. 

In an op-ed published in Saudi media, Xi said he was on a "pioneering trip" to "open a new era of China's relations with the Arab world, the Arab countries of the Gulf, and Saudi Arabia". 

China and Arab countries would "continue to hold high the banner of non-interference in internal affairs, (and) firmly support each other in safeguarding sovereignty and territorial integrity", he wrote. 

Xi, due to meet with other Gulf oil producers and attend a wider gathering of Arab leaders on Friday, said these states were a "treasure trove of energy for the world economy ... and are fertile ground for the development of high-tech industries". 

Several regional rulers including Egypt's president, Kuwait's crown prince and Sudan's leader, arrived in Riyadh on Thursday. 

Saudi Arabia and other Gulf states like the United Arab Emirates have said that they would not choose sides between global powers and were diversifying partners to serve national economic and security interests. 

China, the world's biggest energy consumer, is a major trade partner of Gulf states and bilateral ties have expanded as the region pushes economic diversification, raising US hackles about Chinese involvement in sensitive Gulf infrastructure. 

The Saudi energy minister on Wednesday said Riyadh would stay a "trusted and reliable" energy partner for Beijing and the two would boost cooperation in energy supply chains by setting up a regional centre in the kingdom for Chinese factories. 

Chinese and Saudi firms also signed 34 deals for investment in green energy, information technology, cloud services, transport, construction and other sectors, state news agency SPA reported. It gave no figures, but had earlier said the two countries would seal initial agreements worth $30 billion.

 Tang Tianbo, Middle East specialist at the China Institutes of Contemporary International Relations (CICIR) - a Chinese government-affiliated think tank - said the visit would result in further expansion of energy cooperation.

Earlier, Xi Jinping began a visit to Saudi Arabia on Wednesday that Beijing said marked its biggest diplomatic initiative in the Arab world, as Riyadh expands global alliances beyond a long-standing partnership with the West.

The meeting between the global economic powerhouse and Gulf energy giant comes as Saudi ties with Washington are strained by US criticism of Riyadh's human rights record and Saudi support for oil output curbs before the November midterm elections.

The White House said Xi's visit was an example of Chinese attempts to exert influence, and that this would not change US policy towards the Middle East.

"We are mindful of the influence that China is trying to grow around the world," White House National Security Council spokesperson John Kirby told reporters.

China, the world's biggest energy consumer, is a major trade partner of Gulf oil and gas producers. Bilateral ties have expanded under the region's economic diversification push, raising US concerns about growing Chinese involvement in sensitive infrastructure in the Gulf.

Energy Minister Prince Abdulaziz bin Salman on Wednesday said that Riyadh would remain a "trusted and reliable" energy partner for Beijing and that the two countries would boost cooperation in energy supply chains by establishing a regional centre in the kingdom for Chinese factories.

Saudi Arabia is China's top oil supplier and Xi's visit takes place while uncertainty hangs over energy markets after Western powers imposed a price cap on sales of oil from Russia, which has been increasing volumes to China with discounted oil

On Wednesday Chinese and Saudi firms signed 34 deals for investment in green energy, information technology, cloud services, transport, construction and other sectors, Saudi state news agency SPA reported. It gave no value for the deals, but had earlier said the two countries would seal agreements worth $30 billion.

Xi was met on arrival by the governor of Riyadh, the kingdom's foreign minister and the governor of sovereign wealth fund PIF.

Crown Prince Mohammed bin Salman is expected to offer him a lavish welcome, in contrast with the low-key reception for US President Joe Biden whose censure of Saudi Arabia's de facto ruler formed the backdrop for a strained meeting in July.

Xi will hold bilateral talks with Saudi Arabia and Riyadh will later host a wider meeting with Gulf Arab states and a summit with Arab leaders which will be "an epoch-making milestone in the history of the development of China-Arab relations", foreign ministry spokesperson Mao Ning said.

The Chinese president said he would work with the Gulf Cooperation Council and other Arab leaders "to advance Chinese-Arab relations and Chinese-GCC relations to a new level", SPA reported.

For Riyadh, frustrated by what it sees as Washington's gradual disengagement from the Middle East and a slow erosion of its security guarantees, China offers an opportunity for economic gains without the tensions which have come to cloud the US relationship.

"Beijing does not burden its partners with demands or political expectations and refrains from interfering in their internal affairs," Saudi columnist Abdulrahman Al-Rashed wrote in the Saudi-owned Asharq Al-Awsat newspaper.

Unlike Washington, Beijing retains good ties with Riyadh's regional rival Iran, another supplier of oil to China, and has shown little interest in addressing Saudi political or security concerns in the region.

Saudi Arabia, birthplace of Islam, had supported China's policies in Xinjiang, where the U.N. says human rights abuses have been committed against Uyghurs and other Muslims.

Saudi officials have said that regional security would be on the agenda during Xi's visit. The United States has for decades been Saudi Arabia's main security guarantor and remains its main defence supplier, but Riyadh has chafed at restrictions on US arms sales to the kingdom.

Riyadh has said it would continue to expand partnerships to serve economic and security interests, despite US reservations about Gulf ties with both Russia and China.