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Saudi Arabia signs initial deals with China on prince's visit

Published 08/30/2016, 11:32 AM
Updated 08/30/2016, 01:01 PM
© Reuters. Saudi Arabia's Deputy Crown Prince Mohammed bin Salman is welcomed upon arrival in Beijing

DUBAI (Reuters) - Saudi Arabia signed 15 preliminary agreements with China on Tuesday in sectors from energy to housing on a trip headed by Deputy Crown Prince Mohammed bin Salman aimed at bolstering relations with a top energy customer and trade partner.

The visit is part of a broad reform drive championed by the powerful prince to cut the kingdom's reliance on oil exports and showcase Saudi Arabia as a dynamic nation with diverse opportunities for global investors.

Prince Mohammed met China's vice premier Zhang Gaoli on Tuesday, state news agency SPA reported.

"During the meeting, the strategic relationships and future opportunities to enhance the existing partnership between the Kingdom of Saudi Arabia and China were reviewed," SPA said.

Fifteen memorandums of understanding (MoU) were later signed between the two nations in fields including oil storage, water resources, cooperation on science and technology, and cultural cooperation, SPA said.

Among the MoUs was a plan for the two countries to cooperate in building 100,000 homes in the Asfar suburb of the eastern Saudi city of al-Ahsa.

Saudi Arabia's Housing Ministry signed similar memorandums with South Korea and a Saudi-South Korean consortium in March to develop 100,000 housing units in northern Riyadh over 10 years.

In April, Prince Mohammed launched radical economic reforms designed to develop non-oil industries in Saudi Arabia and attract billions of dollars of foreign investment. Chinese and Japanese banks and companies are expected to play major roles.

Prince Mohammed arrived in China on Monday for talks on economic ties as well as security issues. He will then visit Japan from Aug. 31 to Sept. 3, meeting Prime Minister Shinzo Abe.

From Japan, the prince will return to China to chair Saudi Arabia's delegation to the Sept. 4-5 summit of leaders of the world's 20 biggest economies in the eastern city of Hangzhou.

A Saudi source familiar with the trip said Prince Mohammed would present to the G20 his economic reform plan, which envisages state spending of around 270 billion riyals ($72 billion) in the next five years on projects to diversify the economy.

Prince Mohammed's father, King Salman, led the Saudi delegation to last year's G20 summit in Turkey. Heading this year's delegation would be a political boost for the 31-year-old prince, who rose to prominence when his father took the throne in January 2015.

Saudi officials will also discuss energy cooperation agreements with Japan, the Saudi cabinet said last week.

Saudi Arabia has traditionally accounted for most of Asia's crude imports, but the world's largest oil exporter has lost ground in a number of major markets including Russia and China, and faces a further threat from Iran, which is ramping up exports after the removal of Western sanctions.

© Reuters. Saudi Arabia's Deputy Crown Prince Mohammed bin Salman is welcomed upon arrival in Beijing

Under Prince Mohammed's economic reforms, Riyadh plans to sell a stake of less than 5 percent in national oil giant Saudi Aramco that could be worth tens of billions of dollars, and Chinese and Japanese money could prove crucial in smoothing the sale.

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