The president’s zero covid policy Xi Jinping It may have saved hundreds of thousands of lives, but it brought the Chinese economy and society to the brink of the precipice. This setback in the trade and supply of Chinese-made cutting-edge technology also hit international finance, already damaged by the pandemic and later torpedoed by the ukrainian war. The Chinese economy was also weighed down by very serious problems, such as the real estate crisis, the high cost of fuel and the very high youth unemployment.
The retreat that the Chinese president has taken in his draconian containment strategy, thanks, in part, to the pressure of the recent popular protests spread throughout the country against his zero covid policy, opens a window of hope for economic recovery of her country and is also seen with relief in the international arena.
New era of relations with the Middle East
The change of course that Xi has given in his strategy in the face of the pandemic has accompanied him with a diplomatic and economic offensive in middle East this month December. The “new era” of relations with that part of the world, as Xi himself has defined it, has taken his main competitors by surprise, due to the scope of the agreements reached.
The summits held this past weekend with the most important Arab countries in the Persian Gulf, Middle East and North AfricaThey have sent a warning to the United States. China understands that its area of trade and economic expansion is the entire planet and not just the Asia-Pacific basin from which Washington also wants to displace the Asian colossus.
The steps that Chinese companies have taken in Latin America and Africa in recent decades, with numerous projects in the exploitation of minerals related, for example, to the production of electronic components, such as lithium, complete the puzzle of the Chinese economic expansionism. In Latin America There is a maxim that is always fulfilled with respect to Chinese companies: they go where there is a real possibility of business. The second part of this maxim is that these companies end up, one way or another, displacing their American and European competitors.
Xi’s trip to Riyadh has set off alarm bells in the US and Russia
Xi’s trip to Riyadh, host of those multilateral meetings with China as the protagonist, has set off all the alarm bells not only in the United States, its main global antagonist, but also in Russia. Moscow sees how its Asian neighbor, and convenient ally, seeks consolidate other hydrocarbon supply alternatives to those provided by the Siberian deposits, to avoid the energy dependency that has made Europe so vulnerable to Russia’s aggressive foreign policy.
The Chinese president, who had not set foot in Riyadh since 2016, attended two summits in the capital of Saudi Arabia. In the first he was able to meet with the countries of the Gulf Cooperation Council (GCC), with a marked economic component. The second multilateral summit was with the Arab League and the highest representatives of the 22 countries that make up this alliance with also political overtones.
An alliance that will cause people to talk in the coming years
But in addition, the Sino-Saudi bilateral meetings around Xi Jinping’s visit allowed the signing of 34 investment agreements in areas such as transport, infrastructure construction, logistics, the medical industry, renewable energy, photovoltaic energy, the peaceful use of nuclear energy, artificial intelligence, the development of new technologies and the promotion of innovation in the energy sector.
In the new Sino-Arab relations there is only one inviolable principle: non-interference in the internal politics and domestic affairs of the other partner. The American CNN chain said it these days in a headline that came to summarize the spirit of this trip, the determined geoeconomic commitment of Xi Jinping and the understandable misgivings of Washington, one of Riyadh’s partners (and greatest protector) in the Middle East: “When China and Saudi Arabia meet, nothing matters more than oil.”
China is the main buyer of oil in the world and Saudi Arabia is its main supplier at the moment. Russia’s intention to occupy this position it is very far from reality no matter how cheap Moscow wants to sell the oil that it no longer sends to Europe due to the consequences of the Russian invasion of Ukraine.
Beijing wants to bet on a winning horse and Moscow is not, neither at the moment nor in the medium term. The damages that international sanctions are being produced in Russia, as well as the very consequences and expenses derived from the war, leave the Kremlin in an unstable partner position.
If there is finally a major takeoff of the world economy in the post-covid era (that is, in the era in which the pandemic has not yet been defeated, although it is conveniently left behind), China you will have to renegotiate many things already at full capacity with its European partners, and indirect support for the Russian campaign in Ukraine will not be very well received in Brussels. The policy of the European political merchants will value China’s agreements with another dictatorship, the Saudi, more than the possible intermediation of Beijing with Moscow.
The real scope of the Sino-Saudi alliance
China’s interest in Saudi Arabia is not new, but Xi Jinping’s visit has loudly proclaimed the real value of this strategic alliance, when all eyes were on Europe at war with the invasion of Ukraine and the increasingly less perceptible Chinese mediation efforts, or the tension between Beijing and Washington over Taiwan.
The truth is that the pressure of China in global geopolitics can come from much more defining places for the Global economysuch as the Persian Gulf. And the numbers were there, although the shortsightedness of European and US politicians tends to divert their attention from the uncomfortable “friends” of the Gulf. What happened around the World Cup in Qatar is just one example.
In the first ten months of this year 2022, the trade volume between Saudi Arabia and China reached 97.260 million dollars, with an increase of 37.4 percent compared to the same period of the previous year. The volume of Chinese trade exchanged with the rest of the world had barely grown by 11% in the same period.
But not only. Of the 28 billion dollars invested by China abroad, 20 percent went to Saudi Arabia. Saudi investments in China are also among the highest that the Arab country has abroad. Last Friday, the Saudi oil company Aramco and the Chinese group Shandong announced that they were negotiating a cooperation agreement in the refining sector and petrochemical production in China. Aramco has invested this year more than ten billion dollars at a petrochemical plant in northeast China.
China wants to cooperate in the security and defense of the Persian Gulf
At this summit in Riyadh, not only the economy was discussed, and that is one of the issues that most worries the United States, which for decades has become the “protector” of Saudi Arabia against the common enemy Iran and with many shadow pacts between Washington and Riyadh that make the security and human rights committees in the US Congress look the other way.
China expressed in these meetings its willingness to cooperate with Saudi Arabia on security and defense matters, hitherto a stronghold of the United States in the region. But the US withdrawal from Afghanistan or the Russian presence in Syria have led some of the Gulf countries to look to other protective backs, especially when it comes to the arms supply. The war in Ukraine has diverted much of the US stocks to this warring country, and Saudi Arabia and its neighbors are looking east to complete their arsenals.
China sells cheaper than the United States
and china sells cheaper than the United States and many times with the same technology as US arms companies, hence the recent ban by the United States on the export to China, directly or indirectly, of these latest generation electronic components.
White House National Security Council Chief Adviser John Kirby, has commented that Xi Jinping’s visit to the Persian Gulf “does not come as any surprise”. However, Kirby has highlighted the real concern of the United States by acknowledging that Washington “is fully aware of the influence that China is trying to spread throughout the world.” Influence derived from Washington’s progressive loss of weight in certain areas, such as this one in the Middle East, as well as from this latest Chinese geoeconomic offensive that will be heard a lot in the current decade.