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Oct. 5, 2022, 11 p.m.
China Is Expanding Its Energy Footprint In The Middle East
China Is Expanding Its Energy Footprint In The Middle East
['China', 'Saudi', 'Arabia', 'SCO', 'U.S.']

The recent Shanghai Cooperation Organization (SCO) summit saw China enhance its influence with several of the world's leading players in the oil and gas sector. These included not just the stalwart full SCO members of Russia, Kazakhstan, and India (which was …

China Is Expanding Its Energy Footprint In The Middle East

It is not just enough for China to secure the largest possible pools of oil and gas that it can in the Middle East, which remains the world's largest collective reservoir of such products, but also to secure these at the expense of the U.S., making it a zero-sum game for both countries. First, China itself has continued to use whatever fuel it wants to power its growth, usually at a much cheaper cost than the West's green alternatives, and secondly the lack of building the transitional infrastructure bridge to green energy in the West has made core strategic parts of it - notably, the European Union - beholden to China's great partner in this scheme, Russia. One lesson learned by Xi, it transpires, is the value of offering investment into countries initially and then leveraging this out into extensive political power, as the East India Company successfully did across India, southeast Asia, and east Asia as well, including in Hong Kong and China. The country that China is really after in the Middle East is Saudi Arabia and by signing an MoU with it, via the SCO, for it to become a full dialogue partner for the organisation, China is adding a layer of official organisational credence to what it has been busy doing with Saudi Arabia for years. From this point onwards, MbS has been in China's debt - as were the leaders of countries targeted and similarly helped by the East India Company - and Saudi Arabia's positivity towards China increasing its influence there has followed. Just after China made the offer to MbS to privately buy the entire 5 percent stake in Saudi Aramco that he originally wanted to float, the then-Saudi Vice Minister of Economy and Planning, Mohammed al-Tuwaijri, told a Saudi-China conference in Jeddah that: "We will be very willing to consider funding in renminbi and other Chinese products." He added: "China is by far one of the top markets' to diversify the funding[and] we will also access other technical markets in terms of unique funding opportunities, private placements, panda bonds and others." At these meetings, according to comments at the time from then-Saudi Energy Minister, Khalid al-Falih, it was also decided that Saudi Arabia and China would establish a US$20 billion investment fund on a 50:50 basis that would invest in sectors such as infrastructure, energy, mining, and materials, among other areas.

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