Royal visit emphasises Asian links with the Kingdom

Accompanied by a high-powered delegation, comprising 11 ministers, 13 members of the royal family and a large number of businessmen, the Asian itinerary also indicates a new focus in Saudi foreign relations.

The late King Fahd's long-term health problems had meant that strenuous foreign travel was not easily undertaken. More state visits are likely to give Saudi Arabia a considerably enhanced ability to project its trade and investment possibilities around the world.

The Asian tour has particular significance coinciding with the Saudi government's declared commitment to economic reform and its recent accession to the World Trade Organisation.

Abdullah's visit to China was the first ever by a Saudi head of state following the opening of diplomatic ties between the two countries in 1990 and the first to India for 50 years. King Abdullah is the first Saudi monarch to visit Malaysia in 36 years.

Future customers

The choice of the Asian region for an initial overseas visit by the new king indicates a more global outlook for Saudi Arabia whose trading reach has been traditionally been oriented mainly towards the US and Europe. Observers also note that both India and China have hundreds of millions of Muslims among their populations.

China imports about 16% of its crude oil from Saudi Arabia. Several agreements were signed in Beijing during the visit including what is reported to be a landmark pact to expand co-operation in oil, natural gas and minerals The agreement was signed by Saudi Petroleum and Mineral Resources Minister Ali Al-Naimi and Ma Kai, head of China's State Development and Reform Commission.

Shi Cheng Wang CEO of Sino-Saudi Gas, a joint venture of China's Sinopec and Saudi Aramco, said the agreement would cement bilateral ties in the energy sector. Sino-Saudi Gas is already exploring for gas in Saudi Arabia's Rub al-Khali empty quarter.

Aramco already has a $3.5 billion venture with Sinopec and ExxonMobil to develop a refinery project in China's southern Fujian province and is considering a second refinery project in China's northern city of Qingdao.

India's Oil Minister Mani Shankar Aiyar says his country is also seeking Saudi Aramco's involvement in a refinery project at Visakhapatnam in southern Andhra Pradesh state. Saudi Arabia supplies 32 per cent of India's oil needs. There are also more than 1.5 million Indians working in Saudi Arabia while Indian companies have invested in $500 million of projects in the Kingdom.

WTO means FDI

Following its recent WTO accession, Saudi Arabia wants to showcase potential projects. These could be worth more than $600 billion to foreign investors in key sectors including petrochemicals, natural gas, power and desalination, telecommunications, minerals development and railways.

Abdul Rahman Al-Jeraisy, chairman of the Riyadh Chamber of Commerce and Industry says the visit has opened new horizons to establish joint investment projects and increase non-oil Saudi exports to the countries visited.