Chinese leader’s trip to Saudi Arabia and Africa highlights growing resource rivalry

Hu flew straight from Washington to the Saudi capital of Riyadh on April 22 for a three-day visit to bolster China’s relations with the world’s largest oil exporter. Hu’s first visit to the Gulf State came just months after Saudi King Abdullah visited Beijing—another first for the two countries, which only established diplomatic relations in 1990.

Several major agreements were signed. Among the most important was one to extend cooperation between the giant Saudi oil company Aramco and China’s second largest oil firm, Sinopec, in exploring huge gas reserves in the vast desert known as the Empty Quarter.

Hu visited the headquarters of the Middle East’s largest non-oil company—Saudi Basic Industries Corporation—where he discussed the possibility of allowing it to invest in petrochemical projects to the tune of $US5.3 billion in northeastern China.

Abdul-Rahman al-Attiya, the Riyadh-based leader of the Gulf Cooperation Council (GCC), also promised Hu that free trade agreements between China and the GCC states would be signed at the end of this year.

The growing economic ties between Beijing and the Saudi elite are based on China’s burgeoning demand for oil. In 2004, China overtook Japan as the world’s second largest oil consumer and Saudi Arabia currently supplies about 450,000 barrels per day or 17 percent of China’s total oil imports.

At the same time, the two countries are cautiously moving towards closer political relations, well aware of the potential for friction with Washington. The US has long regarded the Saudi monarchy as a crucial political ally in the Middle East and key supplier of oil. The Pentagon used the Gulf State as a base of operations for launching the first Gulf War in 1991 against Iraq and maintains close ties with the Saudi military.

More
http://wsws.org/articles/2006/may2006/chin-m10.shtml