Saudi Arabia’s crown prince visits Asia seeking economic cooperation, not political mediation

Source:Global Times Published: 2019/2/21 17:34:02

Indian Prime Minister Narendra Modi (right) shakes hands with Saudi Crown Prince Mohammed bin Salman prior to a meeting in Hyderabad House in New Delhi on Wednesday. The Crown Prince received a warm welcome in India. Photo: VCG

The major goal for Crown Prince Mohammed bin Salman of Saudi Arabia to visit India, China and Pakistan is to seek economic cooperation rather than to engage in any political mediation. 

Saudi Arabia won't take sides with any of the three countries, which are very important to Saudi Arabia, though in different ways. Saudi Arabia and Pakistan are loyal military allies, while Saudi Arabia has close economic ties with China and India.

Also, although there has been some media coverage about Saudi Arabia intending to help de-escalate tensions between India and Pakistan, at a time when conflicts are breaking out between the two following the suicide bombing of a paramilitary convoy in Indian-controlled Kashmir, I don't think mediation is a major goal of Mohammed bin Salman's tour of Asia. For one thing, the tour was likely planned long before the suicide bombing happened. For another thing, the feud between India and Pakistan is too deep to be easily settled by Saudi Arabia's mediation. 

The deeper logic behind this tour of Asia is that Saudi Arabia is trying to achieve the multiple goals of diversifying its allies, economy and markets by "looking and turning to the east" and even "traveling to the east." 

It is widely known that the alliance between Saudi Arabia and the US has been the cornerstone of Saudi Arabia's diplomatic and safety strategies. But such an alliance has been constantly challenged since 2000. In particular, the US has achieved energy independence and does not import Saudi Arabian oil as much as they did in the past. In the future, they will import even less oil from Saudi Arabia. This is reshaping the groundwork of the two countries' relations. 

As a result, seeking multiple allies is a natural choice for Saudi Arabia, and developing relations with Asia's major energy importers is the core of Saudi Arabia's strategy of "looking to the east." 

Nowadays, about 70 percent of Saudi Arabia's exported crude is headed for Asian countries. In 2018, China imported about 1.6 million barrels of crude from Saudi Arabia on a daily basis, accounting for 15 percent of China's overall crude imports. Additionally about 8 percent of Saudi Arabia's crude is exported to India. 

Apart from energy cooperation, Saudi Arabia also intends to explore new investment destinations and export markets for non-crude products. Saudi Arabia has invested a huge amount of capital in developing countries, including Pakistan and India. China and Saudi Arabia are also carrying out cooperation in science, manufacturing and nuclear energy. In 2018, China and Saudi Arabia's bilateral direct investment surged by more than 300 percent. At the same time, as trade protectionism and unilateralism are on the rise, Asian countries also have a similar desire for market diversification, and undoubtedly Saudi Arabia is an important trading and investment partner.  

In a word, Mohammed bin Salman's tour of Asia reflects Saudi Arabia's political and economic strategy adjustment. Although Saudi Arabia's dependence on the US in terms of security will not change in the short term, "turning to the east" and "traveling to the east" will be the long-term trend for the country in the future. 

The article was compiled based on an interview with Ding Long, a professor at University of International Business and Economics.


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