Wednesday 15 December 2010

Is Saudi Moving East? « Alpha Dinar- talking GCC finance

Saudi Arabia is increasingly looking towards the East to do Business, rather than the traditional Western partners. Ever since coming to the throng in 2005, Saudi King Abdulla has been strengthening Saudi ties with Eastern countries. He made official visits to China, India, and other Asian countries. China, last year, became the biggest importer of Saudi oil, edging the US. More and more Chinese companies have been coming to the US to build infrastracture projects, as well as petrochemical projects. The trade flow is not only one-sided, as Saudi Aramco has built two refineries in China. China is looking to increase its exports to Saudi, exporting such goods as food, hardware, textiles, and heavy industrial equipment. Saudi like the lack of political condition attached to the economic ties, unlike the US who keeps discussing Saudi’s human rights trackrecord, as well as the lack of democracy.

However, the picture is not all rosy, and Saudi has not fully shifted to the East. Saudi still relies on the US for its weapon technology, as well as military support. Saudi also relies on the West for educated labor (engineers, doctors, etc.). Some problems exist with China, as China as accused Saudi companies of dumping Petrochemicals into the Chinese markets. Also, China Railway Construction Company, the company that built the Mina-Arafat Railway is threatening to sue the Saudi government due to the large losses they accumilated from the project.

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