With Xi visit, Saudi Arabia seeks economic wins, some US leverage: Analysts

BEIRUT — The recent high-profile visit by Chinese President Xi Jingping to Saudi Arabia amounts to a pragmatic move by Riyadh, which seeks economic opportunities with Beijing with the added benefit of raising eyebrows in Washington, according to analysts.

And though no purely defense deals were signed during the visit – and no major ones are expected anytime soon – the limited security relationship between the two could grow, especially with regard to unmanned systems and in the realm of communications technology.

The trip was “a logical next step in the evolution of ties,” Bilal Saab, Senior Fellow and Director of the Defense and Security Program at the Middle East Institute, told Breaking Defense.

“We shouldn’t be surprised by this development given the massive economic opportunities for both sides,” he said. “I see more cooperation on the lower end of the national defense spectrum. Riyadh wants to preserve its return ticket to Washington.”

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Likewise, Jon Alterman, the director of the Middle East Program at the Center for Strategic and International Studies, said the visit “reflects a gradual evolution rather than a revolution in ties. China is an increasingly important trading partner for Saudi Arabia, and China sees Saudi Arabia playing an increasing role in Chinese economic and energy security for the next several decades.”

Among the deals that were struck that might make Washington wary were cloud computing and data center agreements with controversial (in the US) Chinese tech firm Huawei. The US government has long been concerned about Huawei’s push as a 5G powerhouse, including fears the network could interfere with US systems in the Middle East, perhaps with its top-of-the-line fighter jets, or could intercept communications on behalf of the Chinese government. Huawei has denied providing data to the Chinese government, as American security officials allege.

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“The US objection is to collaboration, especially on technology issues, that the United States sees as threatening US security interests,” Alterman said.

An added benefit for Riyadh, analysts said, was that US concerns with the Saudi-relationship with China could induce the US to soften its criticisms or further open its defense market.

A similar dynamic played out in 2017 when the kingdom agreed to buy Russian S-400 surface-to-air missile systems after the US seemed to hesitate on a deal for American-made Terminal High Altitude Area Defense systems, known as THAAD. Then, after the US approved the THAAD deal, Saudi interest in the S-400 evaporated.

“For Saudi Arabia, strengthening relations with China factor into Riyadh’s quest to gain greater leverage with Washington,” Giorgio Caffiero, CEO and founder of Gulf State Analytics, a geopolitical risk consultancy based in Washington told Breaking Defense. “But more than being about playing East and West off each other, the Saudis are attempting to obtain certain benefits from its relationships with the US and other Western countries while also obtaining others from partnerships with China and other Eastern powers.”

Caffiero said that there are certain aspects to Beijing’s foreign policy and approach to doing business that sit well with Saudi officials, making China, at least in certain ways, a more appealing partner than the US.

“The Chinese foreign policy doctrine of non-interference sits well with the Saudis who are upset with lectures from Western statesmen about human rights abuses in the kingdom and other Arab countries,” Caffiero said.

Abdullah Al Junaid, a Bahraini strategic expert and political researcher, said, “The Cold War is over, and Washington better realize that Saud Arabia main concerns making up for lost time, and that Riyadh has obligations towards its people and the region that supersedes any other obligations.”

Earlier this month, Saudi Arabia’s minister of finance announced that the kingdom’s 2023 defense budget will be $69 billion, a considerable increase from its defense spending in 2022, which was $45 billion. But experts suggested there are fewer predictions about Riyadh inking big arms deals with Beijing.

“I’d be very surprised if the Saudis bought major weapons systems from China at this time,” Alterman said. “While US acquisitions often require an agonizing approval process and a long wait for delivery, the Saudis also consider them best-in-class, and they have systems in place both to train on them and to sustain them.”

But there’s at least one defense sector in which the two nations have cooperated: unmanned aerial vehicles.

Back in 2017 the kingdom made a deal to operate Wing Loong Chinese drones in deals that media outlets reported are worth approximately $10 billion. In March of that year King Abdulaziz City for Science and Technology signed an agreement with the state-owned China Aerospace Science and Technology Corporation (CASC) to establish a manufacturing plant in Saudi Arabia for the CH series of UCAVs.

Then, this year during Saudi’s first international defense show, the Saudi Advanced Communications and Electronics Systems firm signed an agreement with China Electronics Technology Group Corp. also to design and build military drones in the kingdom.

Alterman said that drones are the most attractive Chinese military product for the Saudis. “Other systems are less attractive because of issues of quality, interoperability, or other issues,” he said.

Caffiero said, “In general, the Saudis eye from China the opportunity to purchase certain weapons like armed drones that the US has chosen not to sell Riyadh. Essentially, when it comes to such weapons deals, China’s sales to the kingdom are in niche areas.”

More generally, Saudi Arabia is trying to fill in the gaps left by the US in terms of armaments due to embargoes by Washington.

“Saudi Arabia is trying to complement its US relationship with a Chinese. The desire is to strengthen both rather than trade one for the other. Surely, part of the strategy is to benefit from the rivalry between the two, but an even larger part of the strategy is not falling victim to the rivalry between the two,” Alterman said.

Caffiero appeared to agree.

“As Riyadh navigates a complicated and increasingly multipolar world, there is no denying that pursuing a deeper relationship with China is a critical component of Saudi Arabia’s foreign policy agenda. The kingdom strengthening ties with China serves to illustrate Riyadh’s determination to assert a more independent foreign policy while sending Washington a message about how Saudi Arabia does not take orders from the US,” he said.