Xi Jinping calls for oil trade in Yuan. The Chinese leader declared that his visit marked the beginning of a new era in relations.
On Friday, President Xi Jinping informed the leaders of the Gulf Arab nations that China would seek to purchase gas and oil in yuan, a gesture that would promote Beijing’s intention to establish its currency globally, reports Gulf News.
Xi was speaking in Saudi Arabia, where Crown Prince Mohammad bin Salman had hosted two “milestone” Arab summits with the Chinese president that highlighted the prince’s regional gravitas as he pursues alliances beyond the country’s deep historical relations with the West.
During Xi’s visit, top oil exporter Saudi Arabia and economic powerhouse China both issued strong statements about “non-interference”.
Crown Prince Mohammad lauded the “historic new phase of relations with China” at the commencement of Friday’s discussions.
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Despite the fact that Saudi Arabia and China inked multiple strategic and economic collaboration agreements, analysts believe relations would stay anchored primarily by oil concerns, despite Chinese enterprises’ pushes into the technology and infrastructure sectors.
“Energy concerns will remain front and centre of relations,” said Robert Mogielnicki, senior resident scholar at the Arab Gulf States Institute in Washington.
“The Chinese and Saudi governments will also be looking to support their national champions and other private sector actors to move forward with trade and investment deals. There will be more cooperation on the tech side of things too…”
This week, Saudi Arabia and Huawei struck an MOU on cloud computing and the construction of high-tech facilities in Saudi cities. The Chinese tech behemoth has helped create 5G networks in Gulf states.
Riyadh is China’s main oil supplier, and the two nations reiterated the significance of global market stability and energy collaboration in a joint declaration, while also working to increase non-oil trade and cooperation in peaceful nuclear power. Xi stated that Beijing will continue to import substantial amounts of oil from Gulf Arab countries, as well as increase imports of liquefied natural gas, and that their countries were natural partners who would work more in upstream oil and gas development.
China would also “make full use of the Shanghai Petroleum and National Gas Exchange as a platform to carry out yuan settlement of oil and gas trade,” he said.
Beijing has been advocating for the adoption of its yuan currency in commerce rather than the US dollar.
Before Xi’s arrival, a Saudi source told Reuters that selling limited amounts of oil in yuan to China might make sense in order to pay Chinese imports directly, but “it is not yet the right time”.
Earlier, the Chinese leader declared that his visit marked the beginning of a new era in relations, expressing hope that the Arab summits would become “milestone events in the history of China-Arab relations”.