China and Saudi Arabia are deepening their financial ties, as China selects Saudi Arabia to host its upcoming U.S. dollar bond issuance—the first in three years. This choice reflects a growing economic partnership, with Saudi Arabia relying on Chinese investments to support its ambitious development projects.
Saudi Arabia’s Vision 2030 initiative, aimed at transforming the nation into a sustainable, innovation-focused economy, has reached a valuation of $1.3 trillion. The plan’s focus on renewable energy and futuristic urban development, like the mega-city project Neom, has attracted significant Chinese interest. Chinese companies, especially in tech and real estate, see opportunities in Saudi Arabia’s expanding construction and green energy sectors.
The Saudi Public Investment Fund (PIF) solidified this connection by securing $50 billion in financing from Chinese institutions in August. Additionally, Saudi Arabia has shown interest in Chinese tech advancements, such as backing a Chinese rival to OpenAI. Saudi Arabia recently launched two new exchange-traded funds (ETFs) tied to Chinese and Hong Kong markets, providing Saudi investors with easier access to Chinese equities.
However, this closer relationship with China has raised concerns in the U.S. Washington had offered Saudi Arabia tech and security agreements, conditioned on Riyadh scaling back its tech partnerships with China.
