Saudi Arabia urges Chinese firms to explore its 'phenomenal demand', cooperate in green transition

Saudi Arabia's investment minister called for further facilitation on green transition collaborations with Chinese companies in Beijing on Tuesday, with bilateral trade and business exchanges in full swing amid their fraying relations with the West.

The Gulf state is striving to catch up on the global wave of clean energy transition, which provides China, a leader in the global new energy sector, an opportunity to grow investment and involvement in the region's renewables development and beyond, Khalid al-Falih told the China-Saudi Investment Conference.

"We invite Chinese companies to participate in the green transition supply chain ... in addition to investments, whether it is [foreign direct investment] or in our capital, in the Kingdom of Saudi Arabia, there is significant project workload that requires participation from China's project execution, project management companies," said Falih.

Do you have questions about the biggest topics and trends from around the world? Get the answers with SCMP Knowledge, our new platform of curated content with explainers, FAQs, analyses and infographics brought to you by our award-winning team.

"To the Chinese contractors, the Chinese material suppliers, please consider this phenomenal demand for your companies to engage in projects, including housing, city development, smart cities and so forth."

Saudi Arabia's Minister of Investment Khalid al-Falih and China's commerce vice-minister Li Fei at the China-Saudi Investment Conference in Beijing on Tuesday. Photo: AP alt=Saudi Arabia's Minister of Investment Khalid al-Falih and China's commerce vice-minister Li Fei at the China-Saudi Investment Conference in Beijing on Tuesday. Photo: AP>

China companies, such as JinkoSolar, the largest module manufacturer in the world, already occupy significant market share in Saudi Arabia.

The Saudi Arabian state-owned ACWA Power has also signed multiple agreements with Chinese firms on solar, green hydrogen and water desalination projects.

During a visit to solar products manufacturer GCL System Integration on Sunday, Falih had also said that joint efforts as part of the Belt and Road Initiative had provided a driving force for bilateral cooperation.

He added that China had also become a reliable partner for Saudi Arabia in achieving its "Vision 2030" strategic framework and road map for its future development.

"The Saudi side hopes that [GCL's] new energy materials technology project will land in Saudi Arabia as soon as possible, providing green and low-carbon energy for Saudi Arabia and the Middle East," Falih said, according to Chinese state media.

China has been Saudi Arabia's top trading partner for a decade, while the Kingdom has been China's largest trading partner in the Middle East since 2001.

Bilateral trade exceeded more than US$116 billion in 2022, up by over 30 per cent from the previous year, according to official data.

Meanwhile, Saudi Arabia has long been China's largest oil supplier, with shipments of 87.5 million metric tonnes (641 million barrels) last year.

China's commerce vice-minister Li Fei told the conference on Tuesday that bilateral cooperation should continue focusing on innovation, "embrace the new wave of technological revolution and industrial transformation, strengthen partnerships in cutting-edge fields, such as artificial intelligence, life sciences, quantum information, and high-end manufacturing".

On Sunday, Falih also met with Beijing mayor Yin Yong, who said that the vast Chinese market harbours abundant demand and investment opportunities.

"Beijing is vigorously developing hi-tech industries, and willing to closely exchange with Saudi Arabia, with an aim to deepen mutual cooperation in industrial investment, technological innovation, digital economy, smart cities and other fields," Yin said, according to Chinese state media.

"The goal is to promote two-way investment by enterprises from both regions, enhance exchanges in urban governance, and exchange experiences on the preparations for the Olympics."

With investment in sports a significant part of Saudi Arabia's Vision 2030 strategy, it has been confirmed as the host of the 2029 Asian Winter Games and 2034 Asian Games, while the Kingdom has set its sights on hosting the Olympic Games as well as other high-profile events, including the Fifa World Cup in 2034.

Beijing, meanwhile, hosted the Summer Olympic Games in 2008 and Winter Games last year.

Last month, the People's Bank of China and the Saudi Central Bank signed a three-year swap agreement for a maximum value of 50 billion yuan (US$7 billion), or 26 billion riyal, to foster bilateral commerce in both currencies, opening the way for trade to flourish.

President Xi Jinping's visit to Riyadh in December last year saw US$50 billion of investment agreements signed, and resulted in a series of government to business level visits.

Another US$10 billion of deals followed during June's Arab-China Business Conference in Riyadh, covering technology, renewable energy, agriculture, real estate, minerals, logistics, tourism and healthcare.

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2023 South China Morning Post Publishers Ltd. All rights reserved.

Copyright (c) 2023. South China Morning Post Publishers Ltd. All rights reserved.