After visiting Pakistan and then India, Saudi Crown Prince Mohammed bin Salman traveled to China where he met with President Xi Jinping and Vice Premier Han Zheng. The two countries enjoy excellent relations, with China being the largest market for Saudi oil exports. Ryiad and Beijing may intensify their exchanges under the “Belt and Road initiative”.
China-Pakistan Economic Corridor
Ryiad has shown interest in the China-Pakistan Economic Corridor, including the port of Gwadar where Saudi Aramco has planned to invest nearly $ 10 billion for the construction of a huge refinery. Other Saudi companies such as the renewable energies leader “Acwa Power” could set up in Gwadar. Saudi investments in Gwadar in the energy sector are expected to put an end to power shortages in the Baluchistan region. The development of the CECP will also allow Saudi energy companies to have better access to Western China’s provinces and Central Asian markets.
While the BRI is sometimes under criticism, Saudi investments in Gwadar reflect the confidence of this country in the future of the CECP, -a fact that is highly appreciated by Beijing-
Under the leadership of the Crown Prince, Saudi Arabia has confirmed a new economic direction, less dependent on oil and more innovative.
Saudi Arabia will face several challenges in the near future, the first one being reducing unemployment. The unemployment rate stood at nearly 12.8% in the third quarter of 2018. Ryiad would continue to reduce the use of foreign labor and favor local jobs. Another challenge is the emergence of an industrial sector in a country where oil accounts for more than 80% of its exports. The Kingdom of Saudi Arabia therefore seeks to diversify its economy.
These objectives appear in the Vision 2030 strategy. It consists of several programs, the first one regards logistics and industrial development according to the Industry 4.0 principle (similarly adopted by China in its “Made in China 2025” strategy).
The Vision 2030 strategy also aims to open the country to the rest of the world, particularly by developing tourism. New seaside resorts are expected to emerge on the Red Sea coastline
NEOM megacity and the BRI
Another major project of the Vision 2030 Strategy is the creation of NEOM megacity in the north-west of the country.
This city of nearly 26,500 km², once completed in 2025, is expected to become the largest city entirely managed by artificial intelligence. All transport would be autonomous, and power will from renewable energies.
This project, unveiled in October 2017, demonstrates MBS’s ambition to transform its country and diversify the Saudi economy by promoting new activities.
The city will become an important hub for the whole Middle East. A bridge is planned to be built between Egypt and NEOM. In March 2018, Egypt and Saudi Arabia launched a $ 10 billion joint fund to finance the Egyptian region bordering Neom. This project is also expected to benefit Jordan, especially the Aqaba economic zone, close to the future megacity of NEOM.
By visiting China, MBS seeks to attract Chinese investors in its innovative city project, and make Chinese hi-tech leaders developing projects in NEOM . The project is estimated at $500 billion and can only be achieved if the international community, including China supports the project.
The participation of Chinese companies is crucial for the development of NEOM so that this new city is fully integrated with the various flows of goods, capital and people.
As a result, NEOM could be an integral part of the BRI as IMF experts pointed out.
The new city of NEOM could serve as a laboratory for the latest innovations for high-tech companies, especially Chinese companies.