By Kabir Taneja
As China’s President landed in Riyadh this past week amidst much fanfare, Saudi Arabia announced a bumper budget surplus owing to high oil prices, putting the kingdom forward as the fastest-growing G20 economy, and giving a boost to Crown Prince Mohammed bin Salman’s (MBS) grand plans to re-design the region’s economy for the future. To achieve this, Saudi Arabia is not only going through an economic renaissance but also a geopolitical one as well.
Riyadh’s traditional geopolitical posture has predominantly had a western compass, with close ties between the House of Saud and Washington over decades. Both the internal and external security of Saudi Arabia has been critical for a long time for the United States (US) for its and the West’s energy security. This strategy has had two major parts to it: First, consistent and uninterrupted supply of oil and gas; second, influence over energy pricing, especially with regard to, the Organization of the Petroleum Exporting Countries (OPEC)— the producers’ cartel. The former is now challenged by a climate change-pushed global energy transition towards renewables; however, the latter, remains critical with the said transition being politically volatile, as being witnessed currently in Europe on the sidelines of Russia’s invasion of Ukraine.
The other driving aspect of increasing change in posture is an expected coming of great power competition between the US and China, one that countries in the Gulf are looking to sidestep and not get embroiled in. Riyadh’s decision to expand its influence on oil pricing by developing the OPEC+ mechanism, which includes Moscow, has added further layers of tension between the US and the Saudis. During these critical geopolitical moments that are currently unfurling, MBS is looking to implement some of the most drastic political and societal changes in the kingdom’s history. These include opening the economy, attempting to move away from oil, adopting a more moderate take on Islam, and so on. While a widely supported initiative globally, the risks attached to it remain significant, despite a view that the country’s young population backs MBS and his initiatives.
For China, the current squabble between the US and Saudi Arabia is an opportunity. While Beijing would know that Riyadh would in all probability not align fully with its interests, pulling them more towards a central, and “independent” line of thinking would be sufficient. For the US, recent attempts by President Joe Biden to pacify MBS and make attempts to apply a band-aid to the frayed bilateral seem to have not gone according to plan. For Biden, the fact that MBS teamed up with Moscow and cut oil production before the US midterm elections leading to volatile inflation left a bad taste in the mouth. Biden, who had called Saudi a pariah state earlier, and the US being slow institutionally to mount a response when refineries in the country were attacked by drones operated by Iran-backed Houthi rebels, has fallen out of favour with the Crown Prince who believes a Republican White House is more aligned with their interests. The botched US withdrawal from Afghanistan in 2021 has only added to the anxieties in capitals such as Riyadh and Abu Dhabi.
The 2019 attack against the oil facilities in Saudi Arabia is perhaps an underplayed event in how Riyadh calculates security today, and the perception of Beijing being a ‘replacement’ big power in place of the US in the region is an overplayed one. China’s outreach to the Arab states is not a zero-sum game for Xi Jinping. A significant reason behind the depression in US–Saudi ties is the issue of Iran, a country with whom China signed a 25-year-long strategic cooperation partnership in March 2021, which by some estimates is placed at around US$400 billion. This deal, perhaps automatically, to a large extent, nullifies any argument that China is the country that will come to the aid of the Arab world militarily. While there is a palpable feeling of a waning US influence in the region, Washington is still expected to remain a critical external kinetic operator.
However, the above does not mean China is not in the fray. Beijing’s increasing influence is real, and something to watch out for. While it may be limited in its strategic presence, China’s predominant use of its economic muscle to make space for itself is noteworthy. Technology is one of the frontlines where multiple states are increasingly taking a hard stance against Beijing. A part of the US$30-billion worth of agreements between Riyadh and Beijing is a significant component going to Huawei, giving China deeper access to critical tech in the region, specifically the development of 5G infrastructure, raising unease in Washington over the proximity of Chinese tech to American military tech stationed across the region. While the US has managed to use its leverage with Israel to push it away from getting too close to Beijing, not much success has been achieved with the Gulf states.
China’s inroads in the region also offer a fundamental challenge for new ‘minilaterals’ such as the I2U2 grouping (India-Israel-US-UAE). While a country such as India that has more extensive and expansive joint military exercises programme with the region than China, the geoeconomics component of geopolitics today is significant. For example, within the I2U2, while India has banned dozens of Chinese apps and keeps the likes of Huawei at a distance, the United Arab Emirates (UAE) embraces it. These divisions of interest are what Beijing hopes to achieve in the short term as it looks to build its long-term power.
Finally, the visit of Xi Jinping to Saudi Arabia is not a story of China’s growing influence. It is, for now, the story of Saudi Arabia’s hedging of interest, seeking a more independent foreign policy, and looking towards more equity in its bilateral with the US. Beijing is the capital Riyadh is working through to increase its regional and international play, to China’s delight and US’s dismay.