Thursday, March 16, 2017

Saudi visit opportunity for closer China ties

By Ding Long

Global Times - 2017/3/16

Saudi King Salman bin Abdulaziz Al Saud arrived in Beijing on Wednesday, embarking on a four-day state visit to China. China is one of six countries - the others are Malaysia, Indonesia, Brunei, Japan and the Maldives - on King Salman's 31-day Asian trip, a signal that Saudi Arabia is turning to the East for diversification.  Strengthening economic cooperation and political relations with East Asian countries is the primary goal of King Salman's trip. The Saudi economy relies heavily on oil revenues, which account for 40 percent of the economy, 80 percent of fiscal income and 90 percent of export value. But the oil price slump caused the country to run high deficits of $98 billion and $79 billion in 2015 and 2016, respectively. Moreover, the world economic downturn, rise of new energy, failure to curb oil output and other factors are expected to restrain any oil price rebound in the long run.  What's more disturbing is that with the increasing energy independence in the US, except for a small amount of oil products, the US is no longer in need of Saudi oil, which has weakened the longstanding security relationship between the two countries. At the same time, Saudi Arabia has been losing the European energy market as a result of the increasing marketing efforts made by Russia and other non-OPEC oil producers.