Saudi Arabia aims to de-dollarize with China’s assistance.
Written by Ahmed Adel, Cairo-based geopolitics and political economy researcher
The upcoming visit of Chinese leader Xi Jinping to Saudi Arabia, scheduled for December and prepared for a year, shows that the Gulf kingdom has sidelined American interests for its own and taken the first step towards de-dollarization. According to Saudi Foreign Minister Adel al-Jubeir, strengthening trade ties and regional security will be prioritised during Xi’s upcoming visit to Saudi Arabia.
Jubeir emphasized that meetings between Chinese and Saudi leaders are “natural” and recalled that China is Saudi Arabia’s largest trade partner. Sources familiar with the organisation of Xi’s visit confirmed that it has been prepared for a year and that the Chinese leader will arrive in the second half of December to attend the China-Gulf Summit.
Xi’s visit to Saudi Arabia is a continuation of a wider process stimulated by BRICS and the Shanghai Cooperation Organization (SCO), in which China and Russia are key countries. BRICS and the SCO are increasingly attractive organisations for many countries as a framework in which development and cooperation is possible without blackmail and pressure.
Saudi Arabia has fundamentally changed its policy from one of complete submission to the interests of the US to now putting its own national interests first. This does not mean that the Saudis will break relations with the US, but it is a huge difference when the country puts its own interests first compared to when it is subordinated to the interests of Washington.
Riyadh pursues much better and closer cooperation with China as it is a continuation of the process in becoming an independent state and not subservient to Washington. In these processes, by the nature of things, since they are complementary economies, avoiding the dollar as a means of payment is a completely logical plan as it removes the risk of great damage if American sanctions are ever imposed.
On the one hand, BRICS, independently of Saudi Arabia, is operationally working to create a concept that would reduce the importance and influence of the dollar in the world economy. More precisely, such an achievement would reduce the influence of the dollar, which is effectively the basis of US foreign policy.
It is also for this reason that Saudi Arabia is positioning itself as a potential new member of the BRICS bloc.
Within that, a whole series of countries in bilateral cooperation, which is now expected from China and Saudi Arabia, agree on payments in domestic currencies as the first step in the process of de-dollarizing the world economy. It is also for this reason why the visit of Xi to Saudi Arabia follows from everything that has already happened and should not be considered a surprise.
However, it is too early to say whether China will overtake the US as Saudi Arabia’s main partner, even despite the fiasco that was President Joe Biden’s visit to the Gulf kingdom. This is especially the case because Saudi Arabia has based its defence on American weapons and has immense financial ties with the US.
There will definitely be more significant Sino-Saudi cooperation and the Arab kingdom itself will attempt to detach from the dollar. However, the truth is that de-dollarization is a process that will take many years. None-the-less, the Saudi reduction in cooperation with the US will inevitably occur.
It is recalled that South African President Cyril Ramposa said during his visit to Riyadh in October that Crown Prince Mohammed bin Salman expressed Saudi Arabia’s desire to join BRICS. Discussions on the expansion of the BRICS bloc are scheduled to take place in South Africa when it takes over the presidency in 2023.
Saudi Arabia’s separation from the West has only accelerated under the Biden presidency. Biden described Saudi Arabia as a pariah state due to Prince Salman’s alleged involvement in the murder of Jamal Khashoggi, a Washington Post journalist. However, the US President changed his outlook and rhetoric towards the Arab country after coming to power.
As BRICS represents more than 40 percent of the global population and nearly a quarter of the world’s GDP, with the group set to have bolstered global influence if it expands, Saudi Arabia is interested in gaining further independence by joining the bloc. Joining the bloc also means closer relations with China, something that Saudi Arabia is now pursuing despite Western criticism.
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