Shanghai Cooperation Organisation (SCO) and Global South strategic cooperation

tphuang

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so far, doesn't look like they've agreed to anything on oil or security yet. This first day is just tech/investment related discussions. Huawei is going to build large portion of Saudi digital infrastructure. It's something speculated for a while now.

two would boost cooperation in energy supply chains by setting up a regional centre in the kingdom for Chinese factories. Chinese and Saudi firms also signed 34 deals for investment in green energy, information technology, cloud services, transport, construction and other sectors, state news agency SPA reported.
tomorrow is meeting with other Arab leaders and GCC.
 

tphuang

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Companies involved from today's signings include Huawei, Jinko, ICBC, Envision (battery company), BGI Huda, PowerChina (wind/hydro power projects), Sinohydro, Jolywood (solar), CITIC consturction, SPIC (more power generation, including nuclear), Linklogis (supply chain finance/payment), China Harbour, 4Paradigm (AI), WeRide (autonomous driving), Xcelom (biotech) and a bunch of others

Aside from Huawei, seems like a lot power generation, renewable, construction firms, AI biotech and such. Basically, Saudi buying tech from China.

I'd assume oil/natural gas deals come tomorrow when other arab countries are around.
 

getready

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Multi polarity and Eurasianism is getting to another level with this visit by Xi


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Good read on the new direction gulf region is heading to.

Amd the usual trend of trade, important to keep mentioning imo

China’s trade with Saudi Arabia rose to $87.3 billion in 2021, which saw a 39 percent increase over 2020, while US-Saudi trade has collapsed from $76 billion in 2012 to only $29 billion in 2021.

Some of this Beijing-Riyadh trade may now be conducted in the
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, which will only undermine the US-Saudi relationship further.

In the first 10 months of 2022, China’s imports from Saudi Arabia were $57 billion and exports to the kingdom rose to $30.3 billion. China is additionally building 5G systems and cultivating a vast technology hub with a focus on selling electronic goods, all while helping Saudi Arabia build up an indigenous manufacturing sector.
 
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tphuang

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Thanks, just saw that. What we have all been waiting to see. Of course, there is the added benefit of making Shanghai future exchange more international. Or at least I hope so. This morning, I also saw news of Dalian commodity exchange allowing foreign access. I can tell you as someone that worked on getting my company to trade in the major Chinese future exchanges that it was a giant headache to get on those platforms and we had to use local Chinese funds to do the trading.

Also important to do this with all the gulf Arab nations for both oil and gas rather than just oil with Saudis.
 
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ACuriousPLAFan

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Sharing this Twitter thread by Jiang Jiang, a Xinhua News Agency reporter:


Unroll thread:
The 1st China-Arab Summit means a lot, but China should avoid blind optimism in 2 key points,” said Wu Bingbing, deputy director of the Arabic Language and Culture Department of School of Foreign Languages at Peking University, in a recent interview with Wenhua Zongheng.

"On the Middle East matters, China should maintain the diplomatic concept of "positive balance." In turn, it should also realize that the Middle East countries are also engaged in balanced diplomacy between China and the US. At present, the Gulf countries are still very dependent on the US, so 1) we should not be overly optimistic, and we should not over-exaggerate the interpretation of some friction between the Middle East countries & the US; and 2) For some important issues in Sino-Arab cooperation (such as the hotly debated "use Chinese yuan in China-Saudi oil settlement"), we should also have more comprehensive & prudent thinking, and make adequate policy preparations.

In the economic field, the outside world is very concerned about whether the China-GCC Free Trade Agreement can be reached. Wu believes that the benefits of building the free trade zone is great, but the difficulties are not small. Because the construction of the China-GCC Free Trade Zone is not a mere economic and trade issue, but actually involves a deeper political relationship and strategic mutual trust.
The main difficulty at present is the lack of relations and mutual trust between the Gulf countries, and the reconstruction of the trust will take some time. In the Middle East, there are currently two focal issues: one is the Palestinian issue, or the Middle East peace issue; the other is the issue of trans-Gulf security arrangements. By taking these two issues as the main entry point, the core and key of the current Middle East issue is captured.

There is now a view that the Palestinian issue is not important in the Middle East anymore and that even the Arab countries are not concerned about the Palestinian issue. This view is actually inaccurate. The Palestinian issue is a core issue that involves the entire Arab nation and the Islamic world...China is now a thrust to move the Palestinian issue, the Middle East peace issue, in the right direction and can bring more positive forces to continue to advance the two-state process.

But what does "positive balance" mean? It means that our cooperation with one party definitely constitutes a certain pressure for the other party; but it is precisely this pressure that makes the other party's cooperation with us more enhanced. Turning pressure into motivation is a positive balance. Negative balance, on the other hand, is to limit one's cooperation with one party out of fear of affecting the other party, so that instead the cooperation will be more and more restricted.

For example, China signed a 25-year cooperation agreement with Iran, but there is no similar agreement with the Gulf countries, so there is some pressure on the Gulf countries, and they are therefore motivated to further promote cooperation with China, such as expanding investment and expanding energy trade, and Qatar signed a 27-year gas agreement with China not long ago, and didn't that achieve its effect?
From the U.S. perspective, it is most certainly concerned first and foremost with the great political and strategic significance of the summit. The gradual expansion and increase in the autonomy of Middle Eastern countries, especially traditional U.S. partners and allies, means that the U.S. does not have as strong a grip on the Middle East as it once did...

But it is also important to see that the Gulf states currently have limited autonomy and remain deeply dependent on the U.S. for security, finance, and other matters... Now there may be a domestic optimism in China that some time ago the U.S. asked the OPEC+ countries led by Saudi Arabia to increase oil production, but the OPEC+ ended up cutting production sharply, which sparked a hot debate. In fact, on the issue of whether to increase or reduce oil production, the conflict between the U.S. and Saudi Arabia is not as big as one might think. Joe Biden's demand for increased oil production is to meet the short-term interests of the mid-term elections while Saudi Arabia decided to reduce production out of the long-term interest of obtaining cash & capital flow. The 2 sides are not at great odds, and can actually understand each other.

We have also seen that as the autonomy of the Middle East has increased, and as other powers (including India) have increased their attention to the Middle East, a different kind of importance has come to the fore.

In other words, the importance of the Middle East is not entirely defined and shaped by the United States, but by the interaction of the regional and global landscape, in which China is also a key party.
As I said earlier, if the U.S. advances an exclusive, small multilateral mechanism, it will surely only exacerbate confrontation. In contrast, China is committed to promoting a new inclusive Middle East security architecture, and the idea is clear.

As China has grown to its current size and volume, going global is an inevitable process. Why does China buy so much oil and gas from outside? Why has China become the No.1 trading partner of Arab countries? This is the natural result and inevitable requirement of China's development to the present stage. And when China has reached this stage and scale of development, issues that were not very relevant to China may now be getting closer, which requires China to participate in global governance.

From the perspective of China's production capacity going out, in the current situation where it is very difficult to dock with Europe and America, turning to developing countries or the Global South is an important strategic direction. The Gulf region is actually a region with better resource endowment and various capabilities and conditions, which has global significance for the going out of Chinese industries.

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coolgod

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Both of KSA’s and China’s currencies pegged to USD. No incentive to holds lots of RMB reserves if USD peg remains.
So long as RMB is managed relative to USD, this liely dilutes the incentives to hold RMB assets.
How do you know RMB is pegged to the USD? RMB isn't even soft-pegged to the USD, the PBOC only ever mentioned currency stability, which is important for every currency. In the long run RMB will appreciate, just gradually.
 

tphuang

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Both of KSA’s and China’s currencies pegged to USD. No incentive to holds lots of RMB reserves if USD peg remains.
So long as RMB is managed relative to USD, this liely dilutes the incentives to hold RMB assets.
When you make statements like this, probably at least verify your statement first. Rmb hasn't been soft pegged to dollar for a long time. There is even an off shore version of rmb (known as cnh in currency trading circles) that is free floating. Why do you think china central bank had to defend currency against depreciation recently?
 

tphuang

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China's read out regarding their meeting with GCC.
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——做共筑安全的伙伴。中国将继续坚定支持海合会国家维护自身安全,支持地区国家通过对话协商化解分歧,构建海湾集体安全架构。欢迎海合会国家参与全球安全倡议,共同维护地区和平稳定。
Stuff here about security and how China will support GCC countries in protecting themselves. A lot of weapons sales here I'm sure.

Now, this is what to come in the next 3 to 5 years.
第一,构建能源立体合作新格局。中国将继续从海合会国家扩大进口原油、液化天然气,加强油气开发、清洁低碳能源技术合作,开展油气贸易人民币结算。设立中海和平利用核技术论坛,共建中海核安保示范中心,为海合会国家培养和平利用核能与核技术人才。
So this is the big one. Mainly surrounding settling oil & gas in RMB. Now, I think the importance here is that China wants to have their own exchange in Shanghai that people can come to trade commodities in oil & gas. This would rival CME, ICE or LME. They need to do some real work here so that people are in fact willing to utilize this platform. At the end of the day, China wants other countries (especially other Asian ones) to also be using RMB when they are buying/selling oil & gas and other products. If I were them, I'd also commoditize processed metals.

The straw here is the offer of clean energy cooperation (especially solar for Middle East countries). More importantly, they are also going to be working to train GCC countries to use nuclear technology. That I think is very important if they want to sell more nuclear plants here.

第二,推动金融投资合作新进展。中方愿同海合会国家开展金融监管合作,成立共同投资联合会,支持双方主权财富基金以多种方式开展合作,研究举办中海产业和投资合作论坛,加强数字经济和绿色发展等领域投资合作,建立双边投资和经济合作工作机制,深化数字货币合作。

第三,拓展创新科技合作新领域。中方愿同海合会国家共建大数据和云计算中心,加强5G和6G技术合作,共建一批创新创业孵化器,围绕跨境电商合作和通信网络建设等领域实施10个数字经济项目,建立中海气象科技合作机制,举办中海应对气候变化研讨会。

第四,实现航天太空合作新突破。中方愿同海合会国家在遥感和通信卫星、空间应用、航天基础设施、航天员选拔训练等领域开展合作,欢迎海合会国家航天员进入中国空间站,同中国航天员联合飞行并开展空间科学实验。欢迎海方参与中国航天任务搭载合作,研究成立中海联合月球和深空探测中心。

第五,打造语言文化合作新亮点。中国将同300所海合会国家大中小学合作开展中文教育,同海合会国家合作设立300个中文智慧教室,提供3000个“汉语桥”夏(冬)令营名额,建立中文学习测试中心和网络中文课堂,举办中海语言文化论坛,共建中海人文交流和互鉴双语文库。
beyond that. there is also cooperation is digital economy and green technology development and financial development.

The big one that Chin his offering is clouding computing, AI, big data, 5G/6G, e-commerce, building communication networks and other digital economy field.

space cooperation and train arstronaut to participate in China's space station. Allow them to use China's ISR satellites, presumably Beidou and such.

Finally, Chinese language education. Interesting enough, this is something that MBS has been pushing also.

nytimes also covered it here
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Mr. Xi said that China and the Gulf countries would establish a shared “forum” for peaceful uses of nuclear energy as well as a China-Gulf center for nuclear security.
China also wants closer cooperation with the Gulf countries in the fields of space exploration and infrastructure, and they are discussing establishing a shared center for moon and deep space exploration, Mr. Xi said. His country will assist the Gulf States in training their own astronauts, who will be welcomed on China’s space station to work with Chinese astronauts and to conduct scientific experiments, he added.

The argument you see in the west too often is that China is only gaining ground due to its disregard for Saudi human rights. The real issue is that America is offering Saudi Arabia nothing except military protection. GCC countries are in desperate need to move beyond hydrocarbon economy to continue their wealth generation when rest of the world is cutting back on carbon footprint. It seems to me their idea of using large swaths of desert land to get solar energy and converted to green hydrogen is a good idea. And it would really benefit China to be able to supply them the technology to get there. Other things are also needed for GCC countries to not get left out of digital economy.
 
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