President Xi Jinping's "historic" trip to Saudi Arabia last week, where he met with oil-rich Arab leaders, made it abundantly clear that the US is losing control of the Gulf energy giant and that the region is about to go through a geopolitical flip that will have big effects on West Asia.

On Wednesday, the Chinese president wrapped up a three-day trip to Saudi Arabia with the signing of multiple agreements and Memorandums of Understanding (MOUs) in Riyadh, concerning space research, digital economy, and infrastructure. The Chinese and Arab leadership discussed bilateral cooperation to strengthen commercial ties, Gulf security, as well as local and global issues.

Many consider Beijing’s initiative a cunning strategic maneuver to limit US influence in the region and get a hold of the oil-rich Gulf states with whom Beijing had huge oil and gas contracts.

Earlier in July, when President Joe Biden paid an official visit to Riyadh, Crown Prince Mohammed bin Salman, despite a push from Washington, did not announce a major increase in oil output. Biden has only been embarrassed in front of the public by a modest rise in output that fell far short of his expectations. Saudi state television cut to a visibly frustrated image of President Biden, who appeared to have been taken aback by the unfolding events as the announcement was being made on Saudi official media. A few months later, Saudi Arabia increased its efforts by lowering the amount of oil it produced.

Unlike President Joe Biden's visit to Riyadh this summer, Xi received a ceremonial welcome. At the start of Friday's talks, Prince Mohammed talked about a "historic new phase of China-Saudi relations." Five months earlier in Riyadh, when President Joe Biden attended a smaller Arab conference, there were contentious conversations between the US and Saudi Arabia.

US Reaction

At a time when relations between Washington and Riyadh are hitting rock bottom due to disagreements over human rights, energy policy, and Russian issues, China is moving closer to Saudi Arabia, and the message emanating from Riyadh is clear: "do not get in the way of what the sovereign states are doing.'

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The US which views Beijing as a "threatening axis" and opposes Saudi Arabia and Russia's cooperation in setting oil output targets through Opec+ is likely to be alarmed by China's growing influence in the Gulf. Beijing's attempts to make inroads in the world exchange market by introducing the yuan as a standard international currency instead of the dollar are also upsetting to the US government.

The US administration attempted to minimize China's inclination towards Saudi Arabia prior to President Xi's high-profile trip there by asserting that the US is "not going anywhere". Tim Lenderking, the US special envoy for Yemen, refuted the myth that America's power in the Middle East is dwindling at a CNBC talk program in August. He was commenting on Xi's scheduled visit to Saudi Arabia. Lenderking told CNBC's Hadley Gamble, President Biden's primary message to the area was that the United States would not be departing the US friends in the Middle East. 

Defense Strategy Documents

China and Russia have been identified as the largest security concerns in recent Pentagon defense strategy documents, which were published in October, despite the fact that Russia is at war in Ukraine. This will have an impact on the future structure and equipment of the American military.

The document depicts an effort to stop Beijing's "dominance of critical regions," despite the fact that conflict with China "is neither unavoidable nor desirable." This is an obvious allusion to China's aggressive military buildup in the South China Sea as well as rising pressure on the autonomous island of Taiwan. It warns that China is attempting to sabotage American alliances in the Indo-Pacific area and is using its expanding military to threaten and force neighboring nations. The declassified 80-page research also mentions Russia's conflict in Ukraine and issues alerts over its long-range missiles, nuclear weapons, and online activity. Even while terrorist threats persist, the paper claims that as China and Russia forge alliances, they "now pose more significant challenges to safety and security at home."

Russia cannot long-term challenge the US like China, but Russian aggression threatens our interests and ideals instantly and sharply. China is the only adversary out there with the ambition and growing power to rebuild the global order. This was said by Defense Secretary Lloyd Austin at the Pentagon during the paper presentation.

Mutual Trade

Sino-Saudi investments have expanded from oil trading to infrastructure, communications, high technology, industry, banking, transportation, renewable and nuclear energy, and armaments manufacturing. China imported 1.75 million barrels per day (mb/d) of Saudi crude oil in 2013, representing 27% of the kingdom's exports and showing 3.4 percent growth. China imported 95% of the Kingdom's petroleum, polymers, and organic chemicals in 2021. Bilateral trade between the two countries has increased to $87.31 billion in 2021, while it was just $418 million in 1990.

From 2005 to 2021, Saudi Arabia received the most Chinese contracts and investments, totaling $43.5 billion. Saudi Arabia invested $35 billion in 7.5 million-ton chemical manufacturing projects in China.

China's Belt and Road Initiative (BRI) and Saudi Arabia's Vision 2030 have collaborated through bilateral and regional mechanisms. The latter plan seeks to reduce Saudi Arabia's oil dependence, diversify the economy, shrink the state sector, and grow the private sector. Economic and investment activities have been coordinated by these two strategies.

The "total strategic alliance" between Riyadh and Beijing has strengthened political relations. Both sides have focused on common ground rather than human rights or internal issues. Political ties between Riyadh and Beijing have grown as their partnership has grown from somewhat minor to a "comprehensive strategic alliance."

Instead of discussing human rights or the other side's internal issues, both parties have focused on areas of agreement. Diplomatic nuance has succeeded thus far.