Oil-rich Arab states see a new market in China

President Hu visits Saudi Arabia

April 23, 2006|By NEW YORK TIMES NEWS SERVICE

As President Hu Jintao of China made his first state visit to Saudi Arabia yesterday, his arrival in Riyadh offered the latest sign of shifting winds across the oil-rich Persian Gulf region: China has grown as a major market for oil, and Arab states have begun turning to it as an alternative to the United States and Europe in other areas.

"We are opening new channels; we are heading east," said Prince Walid bin Talal, a billionaire investor and member of the royal family.

"China is a big consumer of oil. Saudi Arabia needs to open new channels beyond the West. So this is good for both of us."

Hu and King Abdullah signed a series of agreements to strengthen cooperation in several areas yesterday, including energy exploration and security, Agence France-Presse reported.

Hu also plans to meet with Saudi businessmen and is scheduled today to become one of the few foreign leaders ever to address the Shura, the consultative council that advises the king and Cabinet. He is also expected to visit East province, Saudi Arabia's premier oil-producing region.

For decades, many Middle Eastern countries saw China as a source of low-price, low-quality goods or, worse, as a Marxist threat that armed rebel groups in the region during the 1950s and 1960s. But relations warmed in the 1990s, and oil trade boomed.

Now, interest in China and other Asian countries is rising throughout the Arab world. In Dubai, the sprawling Chinamex Mart, a mall of Chinese businesses, is seeking to become the largest distribution hub for Chinese products in the region. Chinese diplomats are making their presence felt on the society pages of local newspapers, and airlines in the region have been adding flights to Asian capitals. University courses in Chinese history and language have become more popular than ever.

"Saudi leaders are moving from benign neglect of China to considering it as a long-term partner," said Samuel Blatteis, a Fulbright fellow who has studied the growing ties between China and the Persian Gulf. "China is no longer the only side doing the courting."

Part of what makes China an especially attractive business partner for Saudis is a hands-off approach to domestic policy. Discussions with the Chinese focus on economics and rarely on politics, businessmen say.

China has been willing to do business with Iran and other states isolated by the United States, and can sell technology without the encumbrance of requirements for congressional or parliamentary approval.

"With the Chinese, there are no strings attached," said Gal Luft, co-director of the Institute for the Analysis of Global Security. "They don't talk to you about democracy or reform. They give money, the Saudis give oil and there are no hidden agendas. The Saudis find those kinds of relationships more appealing."

In 2004, the two countries agreed to hold more regular political consultations while Sinopec, China's state-owned oil company, signed a deal to explore for gas in the forbidding deserts known as the Empty Quarter.

Last year, Saudi Aramco signed a $3.6 billion deal with Exxon Mobil and Sinopec for a joint oil refining and chemicals venture in south Fujian province.

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