I see China’s Commerce Minister, Chen Deming, was in Riyadh last week. The Saudis might as well leave the red carpet unrolled, so common are visits by Chinese officials. It isn‘t surprising, of course, given China’s thirst for oil.
But I would resist the temptation to claim a special strategic relationship between the two.
I‘ve spent the past few months researching a chapter for a book, sponsored by the U.S. Naval Academy, on China’s relationship with Saudi Arabia. Most of that time has been spent talking with oil analysts─the sort of people who live and breathe this stuff. The conclusion? Market forces rule.
It’s a remarkably simple explanation. Saudi Arabia needs to sell vast amounts of oil every day. China needs to buy much the same. Both countries have large domestic challenges, so they are looking for stable partners happy to sign long-term contracts and, most importantly, not provide any surprises.
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What are the main differences between the Arabs and Chinese? Religion is an easy answer. There are far more believers in the Middle East. Yet, this isn’t entirely correct, as there are also many Chinese Christians and Muslims.
A more useful way to answer the question is to examine what the Arabs and Chinese are looking at on the internet. Alexa is an internet monitoring company that ranks the Top 100 web sites in each country across the world. The results are revealing.
For a start, the Arabs tend to visit American internet sites more frequently. Google ranks number one in Egypt and Saudi Arabia. Facebook and Youtube also rank high. America might be unpopular among some in the region, but its cultural influence is equally unmistakable.
By contrast, the Chinese rarely spend time on foreign websites. Firewalls are only partly to blame. Importantly, local start-ups have built Chinese-language versions of the most popular foreign sites. They benefit from the economies of scale that the country’s 300 million internet users can bring.
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I was chatting with an Egyptian friend last week, a twenty-year resident of Hong Kong, and was struck by a remark she made: “I had lunch at the Shangri-La hotel last weekend, and the waiter showed me which dishes had pork and which dishes didn’t. It’s the first time that’s happened in twenty-years”.
The story is an example of Hong Kong’s free-market at its best. My friend wears a Hijab and is easily identified as a Muslim. In the past, the waiter might have overlooked this. But not anymore. Why? Because Muslim tourists are Hong Kong’s latest big spenders.
In fact, it’s now common to hear the Arab Gulf dialects spoken in Hong Kong’s air-conditioned malls. The number of Saudi Arabian tourists, for instance, has soared from a low 5,000 in 2000 to 19,000 in 2007. (The numbers have since dipped modestly as a result of the economic crisis).
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China’s President Hu Jintao visited Riyadh last week. It was his second visit in three years. This is a big story, right? Perhaps. It depends on where you are.
I was in New York and the story didn’t rate a mention. Instead, the economic crisis has, not surprisingly, gripped the city’s attention.
The story, however, was big news in China and Saudi Arabia. Sina.com, a leading Chinese news portal, created a special feature for the visit with links to commentary and background information (in the same way CNN might create a special feature for the Gaza crisis). Al Hayat, a major Arabic newspaper, meanwhile devoted its entire second-page to the meeting between President Hu and King Abdullah.
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The Silk Road was, for a while, the world’s largest construction site. From Beijing to Dubai, skyscrapers were erected at a frightening speed. But the economic crisis has taken its toll and the construction sites are closing. Migrant workers are feeling the pinch as they back their bags and head home.
This is a big problem for the Silk Road’s economy. The region accounts for 65 million of the world’s 190 million migrants, according to the World Bank. Many live no more than a few years abroad and most send money home. The two biggest earners, India and China, receive $57 billion annually. It’s a figure equivalent to Microsoft’s annual revenues.
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Worried about the economic crisis? China and Saudi Arabia think they have the answer. The two countries are looking to home-grown solutions. Chinese villagers and Saudi investors might not appear to have much in common. But they do. Both are so far resilient to the global downturn.
Take the example of Chinese manufacturers who have long relied on American consumers. Not anymore. Exports to America have slumped as a result of the economic crisis. Inventories are piling up in the country’s warehouses. What to do? The government has offered Chinese villagers rebates to buy stockpiled consumer goods like mobile phones, washing machines, and Plasma TVs. It’s not just domestic manufacturers who are participating in the scheme; global brands, like Panasonic and Siemens, have also rushed to join.
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