Mon, Jan 23, 2006 page5

• Saudi ruler begins trip to China

  NEW DEPARTURE King Abdullah, the first Saudi monarch to visit the PRC, arrived in Beijing yesterday where oil supplies and anti-terror co-operation will be on the agenda

  • AGENCIES
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  Saudi Arabia's King Abdullah arrived in China yesterday for talks with top leaders about possible energy cooperation and anti-terror measures.

  The three-day visit is the first to China by a Saudi ruler since the two countries formed diplomatic relations in 1990

  The world's number two oil consumer, China has been scouring the globe for crude to feed its booming economy and the king's visit follows soon after Beijing's first formal talks with OPEC in late December.

  Chinese analysts said that while China is eager for stable oil supplies, it has neither the cash nor will to challenge the US -- Saudi Arabia's top diplomatic ally outside the region and also its biggest oil customer -- for its role in the Middle East.

  Saudi Arabia was China's top supplier of oil in the first 11 months of last year, providing 17 percent of its imports, nearly 440,000 barrels per day (bpd).

  But this was under a third of shipments to the US over the same period, at 1.43 million bpd.

  China and the US both want to see oil flowing uninterrupted from the Middle East, said one Chinese energy expert with government connections who declined to be named.

  "If the US is willing to keep soldiers there, we are happy to keep quiet. This trip has potential [only] in the imaginations of people in Washington who worry about the China connection ... maybe it's in the Saudi interest to leave room for imagination," said the energy expert.

  Saudi desires to avoid highlighting its ties to Washington, as much as long-term strategic planning, may have pushed China to the top of the king's agenda, said Zhang Bin (張斌) of the Center for Energy Strategy at the foreign ministry think-tank China Institute of International Studies.

  "At the moment the United States has a lot of problems in the Islamic world. Its relationship is not very good, so they may have wanted to avoid going there first," he said.

  China and Saudi Arabia have dramatically expanded commercial ties in recent years as Beijing tries to expand energy supplies for its booming economy.

  The main Saudi government oil company, a Chinese producer and Exxon Mobil Corp. are partners in a US$3.5 billion project to expand a refinery in southern China.

  Total trade between the two countries -- much of it Saudi oil bought by China -- grew by 59 percent in the first 11 months of 2005 to US$14 billion.

  China is already in talks about establishing a free trade area with the Gulf Cooperation Council, a regional economic organization with the six member states of Saudi Arabia, Kuwait, Qatar, Oman, Bahrain and the United Arab Emirates.

  Topics on the table for discussion besides energy will be counter-terrorism and military cooperation, a Chinese foreign ministry spokesman said.

  Saudi Arabia has been fighting a campaign launched by Islamists sympathetic to al-Qaeda to topple the monarchy. China also says it faces a security threat from Muslim extremists in Xinjiang.
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