China’s Trade Relations with Saudi Arabia: Performance and Prospects

Abstract

From the past era, China and Saudi Arabia have entered into the trade relationship. Trade is at the heart of the growing links between China and Saudi Arabia, which centre on the crude oil and petrochemical industries.  The significance of a strong relationship between China and Saudi Arabia is founded on energy but also extending to other commodities. China, a communist state with the world’s largest population and Saudi Arabia, a monarchy whose constitutions is the Islamic Shari’ a. Time period is taken from 2001 to 2010. Liberalization process has lead to significant increase in quantity of China-Saudi Arabia trade. Both countries play dominant role in their own regions. China is a major country in the East Asia while Saudi Arabia plays a dominant role in Gulf region. Saudi Arabia plays a major role in exporting petroleum in the World while China is the second largest destination for Saudi oil. The fact that China imports oil from Saudi Arabia is the core issue of the China-Saudi Arabia trade structure. In addition, China also imports energy and raw materials including natural gas, plastic and steel products from Saudi Arabia. Saudi Arabia’s imports from China are garments, textiles, and mechanical and electrical products. The trade volume between Saudi Arabia and China grow up many times. Now a day’s Saudi Arabia remain China’s top trade partner in the Middle East and North Africa (MENA) region, for eleven consecutive years. The bilateral trade has achieved a steady growth since the establishment of diplomatic relations between China and Saudi Arabia. Two-way trade between China and Saudi Arabia promotes the cooperation and coordination. China is the second largest economy in the world while Saudi Arabian economy is the world largest exporter. The trade relationship has resulted in strong ties for both economies.

Keywords: crude oil, East Asia, Gulf region, MENA, China, Saudi Arabia, Trade