Major deals during King Salman’s visits to Japan, China
London - Continuing his tour of the Far East, Saudi King Salman bin Abdulaziz Al Saud visited economic powerhouses Japan and China in search of increased trade, technical know-how and, in China’s case, possible military cooperation.
The Saudi monarch began the week in Japan, making him the first Saudi ruler to visit the country since King Faisal in 1971. The Japan leg of the king’s tour focused on economic agreements, with a keen interest from the Japanese about the possibility of listing Saudi Aramco’s initial public offering (IPO) on the country’s stock exchange.
Salman met with Japanese Prime Minister Shinzo Abe on March 13th. Japan wanted to “vigorously advance its ties with Saudi Arabia, which is the linchpin of stability in the Middle East,” Abe said.
The next day Saudi Minister of Economy and Planning Adel Fakeih and his Japanese counterpart Hiroshige Seko signed a number of agreements, including Japanese support for Saudi desalination projects to help address the kingdom’s water shortages. A memorandum of understanding was signed with Toyota Motor Corporation regarding the building and operation of a vehicle manufacturing plant in the kingdom.
Talks between the two ministers included discussion of the Saudi Vision 2030 economic and social reform plan designed to wean the kingdom of its dependency on the energy sector, which has slowed due to falling oil prices.
“Many Japanese take Saudi Arabia’s commitment to its reforms seriously. The relationship of the two countries has now progressed to a strategic partner,” Seko said, according to the official Kyodo news agency.
“From today, we will move from the stage of planning to the stage of implementation of the vision, whose contents are remarkable.”
Abe asked King Salman to consider listing Aramco on the Tokyo stock market, a request the Saudi monarch said he would seriously consider. Aramco, estimated to be world’s most valuable company, is preparing to list 5% of its shares on the kingdom’s stock market, known as Tadawul, and possibly on another two international stock exchanges.
Besides Tokyo, exchanges in New York, Toronto, London, Singapore and Hong Kong are vying for the second and third listings of the stock, which, analysts said, could generate as much as $100 billion, making it the world’s largest IPO.
The king and his large entourage arrived in China, Saudi Arabia’s biggest global trading partner, at midweek. King Salman met with Chinese President Xi Jinping in Beijing on March 16th. Economic and trade deals worth $65 billion covering numerous sectors, including energy, finance, aerospace and culture, were signed between the two countries. Xi said the new-found cooperation between his country and Saudi Arabia had “surpassed our expectations”.
Trade in oil and non-oil goods and services between the two countries is estimated at $54.1 billion, according to Oxford Analytica.
Efforts to expand relations between the countries began last August during a visit to China by Saudi Deputy Crown Prince Mohammed bin Salman bin Abdulaziz, which also saw a number of high-profile deals signed, including one between Aramco and the state-owned China National Petroleum Corporation. The kingdom’s Housing Ministry reached an agreement with China for cooperation in building 100,000 homes in al-Ahsa in eastern Saudi Arabia.
“In terms of strategic location, Saudi Arabia serves as the central hub connecting three continents — Asia, Africa and Europe — and has been an important part of the initiative,” Saudi Ambassador to China Turki bin Mohamed al-Mady told the Xinhua news agency.
Chinese Defence Minister Chang Wanquan said in 2016 that high-ranking military officials of the two countries have had frequent visits in recent years, with good cooperation in areas such as equipment technology and personnel training.
Recently the kingdom’s military began deploying Chinese-made unmanned attack drones and joint military counterterrorism exercises have been conducted in China and naval exercises in the Gulf.