Seek knowledge even if you have to go as far as China

Up until recently, China was not an active tourist or business destination for millions of people in Saudi Arabia. Decades of cold war in the last century between the Western bloc and China, coupled with the language barrier and other cultural factors, distanced us from dealing with the country. Over recent years, however — especially after the visit of Chinese Premier Xi Jinping to Riyadh in December — a new era has been paved between the two countries and historic milestones are in the making.

Currently, China is Saudi Arabia’s largest trading partner, with the Kingdom’s export value to China exceeding $50 billion last year, constituting more than 18 percent of Saudi Arabia’s total exports. Bilateral trade between the two economies is more than $80 billion. Saudi Arabia has also traditionally been China’s top oil supplier, providing about 17 percent of total Chinese oil imports as of last year.

Saudi Aramco last week agreed to acquire a 10 percent stake in China’s oil refining giant Rongsheng Petrochemical for $3.6 billion, a deal that will significantly expand the state-owned energy giant’s refining presence in the country. The deal includes the supply of 480,000 barrels per day of crude oil to the Rongsheng-controlled Zhejiang Petroleum and Chemical Company for 20 years. Rongsheng owns a 51 percent equity interest in ZPC, which in turn owns and operates the largest integrated refining and chemicals complex in China, with a capacity to process 800,000 barrels per day of crude oil and produce 4.2 million metric tons of ethylene per year.

It is quite remarkable how things have changed between the Kingdom and China. Aside from politics, there is a long-term strategic objective to achieve bilateral benefits in different fields.

We at BMG Financial Group had a business encounter with the Chinese as well. During the Davos meetings in May 2022 — the only conference that took place in spring in Davos history — I met Abdullah Al-Swaha, the minister of communications and information technology. I informed the minister about our Chinese client, who wants to explore ways to do business in the country in the semiconductors space. He referred me to the president of King Abdulaziz City for Science and Technology, Dr. Munir El-Desouki, who arranged a grand tour for me and members of the Chinese company of KACST’s impressive semiconductor facilities. Several follow-up meetings have taken place on the scope of cooperation between the Chinese company and KACST. A memorandum of understanding is expected to be signed in May.

It is quite remarkable how things have changed between the Kingdom and China. Aside from politics, there is a long-term strategic objective to achieve bilateral benefits in different fields, including manufacturing, finance, healthcare, technology, and education. I now appreciate the famous old Arabic saying: Seek knowledge even if you have to go as far as China..

Basil M.K. Al-Ghalayini is the chairman and CEO of BMG Financial Group.