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(Bloomberg) — China is willing to expand oil trade with Saudi Arabia, Chinese President Xi Jinping said during a visit to the kingdom that strengthened ties between the world’s second-largest economy and its top crude supplier.
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At a meeting in Riyadh on Thursday, Xi and Crown Prince Mohammed bin Salman also agreed to hold summits every two years as they upgraded the relationship to a comprehensive strategic partnership, the official Xinhua news agency reported. The Chinese leader will meet with several Arab leaders on Friday.
The summit comes at a time when ties between the US and Saudi Arabia have been strained over oil politics.
China will seek to strengthen coordination with Saudi Arabia in the field of energy policy and research, according to a statement from the Chinese Ministry of Foreign Affairs. Saudi Arabia, along with Russia, is the de facto leader of OPEC+, the producer cartel that pumps roughly half of the world’s oil.
Saudi Arabia’s daily oil exports to China have averaged 1.65 million barrels this year, according to data compiled by Bloomberg. That’s worth about $130 million at today’s prices.
There was no mention of the idea that Saudi Arabia might accept paying for oil in yuan instead of dollars, as was reported earlier this year. Diplomats and analysts said at the time that the reports should be seen as a US policy message rather than the kingdom’s plans, in part because the Saudi riyal is pegged to the dollar to hedge against price volatility.
The two countries also signed a series of energy and investment pacts, although details were scarce. They announced plans to synchronize Xi’s signature Belt and Road infrastructure program with the Kingdom’s Vision 2030, which aims to wean the economy off its reliance on oil.
EXPLANATION: Understanding the ups and downs of US-Saudi relations
Xi and Prince Mohammed “discussed aspects of partnership and joint coordination efforts,” the state-run Saudi Press Agency said. Xinhua said Xi agreed to help boost Chinese tourism in the Middle Eastern nation and expand cultural ties.
The moves show a willingness to strengthen relations just as both countries’ ties with the US cool. In October, President Joe Biden accused Riyadh of colluding with Russia to cut oil production, promising unspecified “consequences.”
China and Saudi Arabia have agreed to hold regular summits as ties warm
The pacts included an agreement with China’s Huawei Technologies Co. on cloud computing and high speed internet complexes in Saudi Arabia. Last month, the Federal Communications Commission decided to exclude Huawei from the US market for telecommunications equipment.
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