In January 2006, Saudi king Abdullah bin Abdul-Aziz al-Saud visited China and India, a trip some commentators labeled “a strategic shift” in Saudi foreign policy and reflective of “a new era” for the kingdom.[1] It was King Abdullah’s first trip outside the Middle East since taking the throne in August 2005, and it was also the first trip by a Saudi ruler to China since the two countries established diplomatic relations in 1990.

Abdullah’s travel was significant. His reception suggested both Chinese and Indian recognition of the House of Saud’s role in regulating global oil prices and the impact that Saudi oil policy has not only on Western economies but on the Chinese and Indian economies as well. Riyadh’s relations with Beijing and Delhi are not shaped by energy alone, however. There is a major political component to Saudi strategic thinking. The royal family wishes to engage China and India in order to create a political alternative to its relationship with the United States. Saudi thinkers may believe that an Asian alternative will make the kingdom less susceptible to Western pressure on such issues as democratization and terror financing. While Saudi outreach toward the Asian giants will accelerate in coming years, it will not provide Riyadh with a panacea but rather will still require all parties to confront difficult foreign policy choices they may wish to avoid.

Many Saudi officials, annoyed with U.S. pressure to cease funding Islamist and terrorist groups, find Beijing’s no-questions-asked policies attractive. Beijing and Riyadh are in one key way alike, in that both seek to take advantage of economic globalization without endangering their political status quo.

That Beijing was the first stop on King Abdullah’s Asian tour symbolized China’s growing profile. The Chinese government has worked hard to improve its relations with Saudi Arabia, the world’s biggest oil exporter.[2] In 2004, the two countries inaugurated a series of regular political consultations. That same year, China’s state oil company, Sinopec, signed a deal to explore gas in Saudi Arabia’s vast Empty Quarter (Rub al-Khali). Then, in December 2005, Beijing held its first formal talks with the Organization of Petroleum Exporting Countries (OPEC).

Reflective of the growing breadth of Sino-Saudi relations, Abdullah used his visit not only to sign a pact on energy cooperation and joint investment in oil, natural gas, and mineral deposits but also to conclude broader economic, trade, taxation, and technical accords, a vocational training agreement, and to finalize a Saudi Arabian Development Bank urban development loan for the historic Muslim Chinese city of Aksu in the western province of Xinjiang.[3]

Still, energy is the backbone of the relationship. Until 1993, China was a net oil exporter,[4] but it has since become the second-greatest oil consumer after the United States. More than half of Chinese oil imports originate in the Persian Gulf with 15 percent in Saudi Arabia. Total Saudi-Chinese trade grew 59 percent in 2005 to US$14 billion and may reach $40 billion in the next four to five years.[5] By 2010, the Middle East might account for 95 percent of China’s imported oil.[6]

Saudi Arabia has also emerged as a major investor in Chinese refineries. In 1999, Saudi Arabia’s Aramco Overseas Company provided a $750 million investment—25 percent of the total project—in a petrochemical complex in Fujian capable of processing 8 million tons of Saudi crude oil per annum. Saudi Arabia, in cooperation with several members of OPEC, intends to build a new refinery in Guangzhou involving a total investment of $8 billion.[7]

Sino-Saudi trade and investment will only increase. During his trip, Abdullah invited Chinese businessmen to invest in Saudi Arabia and take advantage of the kingdom’s economic reforms and privatization of some state-owned firms. Beijing and Riyadh plan to expand bilateral investments with emphasis on energy, infrastructure, and telecommunications.[8] The Saudi government may seek Chinese assistance as it works towards diversifying its economy.

Already, Saudi Arabia is China’s biggest trading partner in the greater Middle East, and China is Saudi Arabia’s fourth-largest importer and fifth largest exporter while Saudi Arabia is China’s tenth-largest importer and largest crude oil supplier.[9] Chinese industrial goods are increasingly displacing Western products in the Saudi markets, affecting Saudi attitudes towards the relative importance of the United States and China. Such a trend may accelerate if Chinese government plans to sign a free trade agreement with the Gulf Cooperation Council come to fruition.[10] In the last two years, growing bilateral trade has led to three rounds of free trade area negotiations, most recently in January 2006.

The new economic symbiosis is having an increasing impact on Saudi Arabia’s military and political posture. Riyadh once relied on Washington for its defense.[11] But while Washington was a major military supplier, it was not the only one. Between 1990 and 1994, the Saudi Defense and Aviation Ministry spent $50 billion purchasing military hardware, not only from the United States but also Great Britain, France, and China.[12]

In the 1980s, the kingdom sought to tap the Chinese arms market. In 1985, the Saudi government risked Washington’s ire to import Chinese CSS-2 nuclear-capable, intermediate-range ballistic missiles with a 3,000-kilometer range. With the CSS-2 becoming obsolete, Riyadh is considering purchase of the upgraded, solid-fuelled CSS-5 and CSS-6 with a range of 1800 and 600 kilometers respectively.[13]

It is not just the Saudi government that is happy to find an alternative to its traditional dependence on Washington. Chinese authorities are happy to provide a political and diplomatic alternative for states such as Saudi Arabia that are upset with U.S. pressure to curtail support for terrorism and perceived U.S. interference in domestic affairs. After all, Beijing and many Arab governments share suspicions of U.S. policy.[14] China’s president, Hu Jintao, visited Riyadh in April 2006 and addressed the Shura, the consultative council that advises the king. It is an honor that has been granted to only a select few foreign leaders. The latest U.S. National Security Strategy declares the White House’s belief that “the fundamental character of regimes matters as much as the distribution of power among the states” and reiterated Washington’s goal “to help create a world of democratic, well-governed states that can meet the needs of citizens and conduct themselves responsibly in the international system.”[15] Such objectives threaten equally the Chinese government and that of Saudi Arabia, which is—with Libya and Syria—among the most autocratic and arbitrary regimes in the Arab Middle East.[16] Many Arab governments also see Beijing’s U.N. Security Council veto as an important counterbalance to U.S. hyper-power.[17]

From China, King Abdullah flew to India, Asia’s other emerging giant, where he was a guest of honor at India’s national Republic Day celebrations. It was the first visit of a Saudi monarch to India since King Saud’s brief visit to the subcontinent in 1955. Relations subsequently froze, as Riyadh sided with Washington during the Cold War, and New Delhi drifted closer to Moscow. Saudi-Indian ties strained further after the Indian government failed to condemn the 1979 Soviet invasion of Afghanistan while the Saudi government helped bankroll the opposition Afghan mujahideen.[18] However, with the Cold War over, such impediments to Saudi-Indian relations evaporated.

The two countries have significant interests beyond oil. While India is not a Muslim-majority country, it still hosts the second-largest Muslim population in the world,[19] a constituency that remains interested in Saudi Arabia as the site of the holy shrines at Mecca and Medina. There is already significant cultural interchange. Approximately 1.5 million Indian workers constitute the largest expatriate community in the kingdom.[20]

Riyadh, for its part, has agreed to support New Delhi’s petition for observer status in the Organization of Islamic Conference. It has also been supportive of Indian moves to reduce tension in Kashmir and has tried to move beyond its traditional approach of looking at India through a Pakistani prism.

New Delhi has also cultivated Riyadh for strategic reasons. To Indian strategists, any ally that can act as a counterweight to Pakistan in the Islamic world is significant. Initially, New Delhi sought to cultivate Tehran, but such efforts stumbled in recent years as the Islamic Republic has adopted an increasingly aggressive anti-Western posture.[21] Saudi Arabia now fills that gap. Indeed, Iranian nuclear ambitions have helped draw New Delhi and Riyadh closer.

The Saudi government has its own reasons for cultivating Indian ties. Saudi Arabia and Iran have long competed for power and influence in the Persian Gulf.[22] The 1979 Islamic Revolution in Iran added a new edge to the rivalry, as Iranian ayatollahs sought increasingly to challenge the Saudi officials on religious matters, such as the rules and regulations surrounding the hajj or pilgrimage to Mecca. The fact that about 40 percent of Saudi Arabia’s oil-producing eastern province is Shi‘ite and resents Wahhabi rule worries Riyadh.[23] The anxiety is mutual. In 1994, the Iranian intelligence ministry designated Salafi terrorism as the primary threat to Iranian national security.[24] Tehran’s nuclear drive, Iranian interference in neighboring Iraq, and Iranian president Mahmoud Ahmadinejad’s aggressive rhetoric further raise Saudi anxiety of a resurgent Iran, and all were subjects of discussion during the king’s meeting with the Indian prime minister.[25]

Still, the relationship is not all rosy. The Indian military has been fighting separatist groups in its northern state of Kashmir for several years now. Thousands of lives have been lost because of Islamist terrorism or the associated crackdown. Saudi financiers bankroll many of the Pakistani and Kashmiri groups that conduct the terrorism.[26] The Indian government would like its Saudi counterparts to manage the funds transferred to India better, a substantial portion of which ends in Islamist pockets. The Indian prime minister and Saudi king used their New Delhi meeting to sign a memorandum of understanding dealing with terrorism, transnational crime, and underworld operations.[27] Both governments agreed to cooperate toward the conclusion of a comprehensive convention on international terrorism before the U.N. General Assembly and to establish an international counterterrorism center as called for by the International Conference on Counter-Terrorism held in Riyadh in February 2005.[28]

While the Indian government would like political reforms to take hold in Saudi Arabia to mitigate the Islamist threat,[29] energy is now the driving force in Saudi-Indian relations. Riyadh is the chief supplier of oil to India’s booming economy, and India is now the fourth largest recipient of Saudi oil after China, the United States, and Japan.[30] India’s crude oil imports from the Saudi kingdom will likely double in the next twenty years.[31] During his visit to India, the Saudi king emphasized his country’s commitment to uninterrupted supplies to a friendly country such as India regardless of global price trends.[32]

As with Saudi Arabia and China, energy infrastructure investment is a major component in the development of Saudi-Indian relations. During the state visit, King Abdullah and Indian prime minister Manmohan Singh signed an Indo-Saudi “Delhi Declaration” calling for a wide-ranging strategic partnership, putting energy and economic cooperation on overdrive, and committing to cooperate against terrorism.[33] According to some reports, the king waived off Saudi bureaucratic concerns about precedents the declaration might create with regard to its relations with India’s neighbors, especially Pakistan, by calling India a “special case.” [34]

The private Indian energy firm Reliance will invest in a refinery and petrochemicals project in Saudi Arabia, and India’s state-owned energy firm, Oil and Energy Gas Corporation, will also engage Saudi Arabia as its equity partner for a refinery project in the Indian state of Andhra Pradesh.[35] The Iranian government’s decision to renege on some oil supply commitments in the aftermath of India’s vote against Iran at the International Atomic Energy Agency (IAEA) has also spurred New Delhi to diversify suppliers. There are more than 100 Indian joint ventures in Saudi Arabia and about half that number of Saudi joint ventures in India.[36] As the king visited New Delhi, close to eighty top Saudi businessmen participated in the first “Saudi Arabia in India” business exhibition. A new Saudi-India Joint Business Council will provide an institutional framework to expand bilateral economic ties. Saudi authorities hope that such a channel can tap Indian expertise and help it diversify its economy in fields ranging from information technology and biotechnology to education and small business development.

While Riyadh might welcome its upgraded relations with both Beijing and New Delhi, constraints might limit future expansion of their ties. Sino-Indian energy competition may force an unpalatable choice upon Saudi officials. And once Washington is thrown into the mix, the picture becomes more complicated. With the United States viewing China as its greatest future challenge[37] and Washington working actively to bolster U.S.-Indian ties,[38] joint pressures upon Riyadh will only build. U.S. officials are already concerned that Beijing’s outreach to the Middle East has undercut nonproliferation efforts and challenged U.S. standing.[39]

Riyadh’s close relationship to Islamabad will also constrain its relations with India. Pakistan not only receives oil from Saudi Arabia at discounted rates, but there remains speculation that Saudi interests underwrote Pakistan’s nuclear program and missile purchases,[40] presumably to allow Saudi Arabia ready access to nuclear and ballistic missile technology if the need arose. Pressure has increased on Saudi Arabia to open its nuclear facilities as the IAEA suspects that Pakistani nuclear cooperation has advanced Saudi Arabia’s program to a level warranting international safeguards.[41] Washington also wants Riyadh to provide unhindered access to its nuclear facilities. The Saudis argue that they would do so only if other states—Israel—do the same.[42]

Saudi authorities may also be uncomfortable with improvements in Chinese and Indian relations with Israel.[43] Neither Beijing nor New Delhi may accept Saudi pressure to downgrade their relationship to Jerusalem; unwillingness to compromise on their antagonism toward the Jewish state may pose a quandary for hard-line Saudi officials. Nor will Riyadh enjoy a monopoly over outreach to the two Asian giants. Despite recent tension in Indo-Iranian relations, Indian officials insist that the 1,625-mile, $4.16-billion pipeline project to transport gas from Iran through Pakistan to India remains on track.[44] Chinese firms have also increased their investment in Iran.[45]

A more significant impediment, especially with regard to India, is the proliferation of Saudi-funded religious schools in the country. The Salafi movement has taken advantage of India’s liberal environment and Muslim unease with resurgent Hindu nationalism to preach radicalism to India’s 130-million strong Muslim populace.

A madrasa (Islamic school) education in India has long been a part of many Muslim children’s lives. Madrasas in India number between 8,000 and 40,000.[46] But concerns have been rising in India about the dated and, with Saudi financing, increasingly radical curricula. In 2001, a report of the Group of Ministers on “Reforming the National Security System” recommended the need to modernize madrasa education.[47]

Saudi financial assistance has gone to a range of Indian-Islamic organizations resulting in the establishment of mosques, madrasas, and publishing houses inculcating the Saudi worldview.[48] Riyadh also provides scholarships to Indian students to study religion in its universities. These Saudi-educated imams often return and preach Salafi ideology to unemployed and susceptible Indian Muslims.[49] Some of the returning Indians also transfer funds to local Islamic institutions, often through the hawala system in which no records of individual transactions are produced.[50]

The Ahle-Hadith (People of the Tradition of the Prophet), a Sunni Islamic sect with ties to the Saudi state dating back to the 1920s, has arguably been the biggest beneficiary of Saudi monetary assistance contributing to internecine rivalries among various Indian Muslim sects.[51] Several Indian madrasas that follow the Ahle-Hadith tradition have begun to emphasize their closeness with the Saudi Salafis. While the early Ahle-Hadith was in many ways progressive, it has now altered into an intolerant, literalist strand.

Several Indian Islamic jurists and scholars seem to have gravitated towards this Saudi-sanctioned, radical interpretation of Islam and to a conspiratorial version of global politics. Instructive in this context is a claim made by a Muslim jurist from the Deoband sect in India that [52] Another Islamic scholar from a prominent seminary in north India has argued that “a worldwide anti-Muslim alliance has been formed and is headed by the U.S. It runs in an arc from Hindu fundamentalist India, through China and Russia, and ends with Europe and the U.S. in the west. The effect is to encircle and choke the Islamic world.”[53]

Terrorism will brake Saudi relations with both Asian powers. New Delhi and Riyadh differ over the definition of terrorism. Most Arab states, including Saudi Arabia, argue in the context of the Israeli-Palestinian conflict that liberation struggles justify acts of terror; the Indian government categorically opposes terrorist attacks on civilians. The two states had intended to sign a mutual legal assistance treaty on criminal matters during the king’s visit. Such a treaty usually serves as a precursor to an extradition treaty. But, unable to break the impasse, the two sides’ diplomats could only agree to a watered-down memorandum of understanding on combating crime.[54] New Delhi is especially sensitive given Saudi links to jihadi groups such as Lashkar-e-Taiba, which have staged attacks within India.[55] The group has tried to recruit Indian Muslims—so far with only limited success—for its radical causes from the Indian diaspora in Saudi Arabia and other states in the Persian Gulf. It has been claimed that, despite the best efforts of Lashkar, it has not been very successful in wooing Muslim youth in India.[56]

The Chinese government’s autocratic character has retarded the spread of Salafism in China, relative to the traction extremists have found in the more permissive Indian society.[57] There are approximately twenty million Muslims in China and more than 40,000 Islamic places of worship, at least half of which are in the northwestern province of Xinjiang[58] where Chinese repression is severe. Not only does the state censor sermons, but Chinese officials also ask imams to focus on the damage caused to Islam by terrorism in the name of religion.[59] Chinese authorities often charge practicing Muslims there with incitement, separatism, and Islamic extremism. There has been some evidence of small numbers of Chinese-Muslim Uighurs fighting with Al-Qaeda in Afghanistan with a few even incarcerated at Guantanamo.[60] But even if Chinese authorities conflate religion with Uighur separatism, they still acknowledge that separatist activities have decreased in recent years.[61]

Nevertheless, Chinese oppression of eight million ethnic Uighur Sunnis not to mention other Chinese Muslims may complicate its future relationship with Saudi officials. Uighur grievances are unlikely to dissipate.[62] As Sino-Saudi ties expand, Saudi religious activists may draw parallels between Xinjiang and the West Bank, Gaza, and Kashmir.

It is simplistic to assume that Saudi Arabia is fashioning its foreign policy only in opposition to that of the United States. Nevertheless, the 9-11 terrorist attacks and the U.S.-led war on terror caused both Riyadh and Washington to reevaluate their “special relationship.” It is in this context that Riyadh has begun courting an Asian alternative. Riyadh’s relations with Beijing and New Delhi are on an upward swing as a consequence of shifting global political and economic realities and are unlikely to alter as a result of a change in Saudi leadership.

The prospects for a tight Sino-Saudi relationship, however, are rosier than a future Indo-Saudi relationship. Simply put, the threat of Islamism and friction between autocratic Saudi Arabia and democratic India are too great. This may create complications in the long-term but in the near-term, Saudi Arabia’s “look east” policy is firmly on track, and the United States will have to configure its foreign policy accordingly.

[1] International Herald Tribune, Jan. 26, 2006.
[2] Jin Liangxiang, “Energy First: China and the Middle East,” Middle East Quarterly, Spring 2005, pp. 3-10.
[3] “China, Saudi Arabia Forge Closer Relationship,” China Daily (Beijing), Jan. 24, 2006.
[4] Matthew Forney, “China’s Quest for Oil,” Time, Oct. 25, 2004.
[5] Associated Press, Jan. 23, 2006.
[6] Ibid.
[7] Financial Times (London), Jan. 24, 2006.
[8] Hindustan Times (New Delhi), Jan. 24, 2005.
[9] The New York Times, Apr. 23, 2006.
[10] China Daily, July 7, 2004.
[11] Rachel Bronson, Thicker than Oil: America’s Uneasy Partnership with Saudi Arabia (New York: Oxford University Press, 2006), pp. 56-60.
[12] Ibid., p. 207.
[13] Dan Blumenthal, “Providing Arms: China and the Middle East,” Middle East Quarterly, Spring 2005, pp. 11-9.
[14] Arab News (Jeddah), May 2, 2006.
[15] The National Security Strategy of the United States of America, White House, Mar. 2006, p. 1.
[16] Saliba Sarsar, “Democracy in the Middle East: Quantifying Arab Democracy,” Middle East Quarterly, Summer 2006, pp. 21-8.
[17] Arab News (Jeddah), May 2, 2006.
[18] P.R. Mudiam, India and the Middle East (London: British Academic Press, 1994), pp. 85-97.
[19] Detailed statistics can be found at “Census of India,” Table 1: Total Population, Government of India, Ministry of Home Affairs.
[20] Divya Pakkiasamy, “Saudi Arabia’s Plan for Changing Its Workforce,” Migration Information Service, Nov. 1, 2004.
[21] See Harsh V. Pant, “India and Iran: An ‘Axis’ in the Making,” Asian Survey, May/June 2004, pp. 369-83.
[22] R.K. Ramazani, Revolutionary Iran: Challenge and Response in the Middle East (Baltimore: Johns Hopkins University Press, 1986), pp. 8-11.
[23] Anthony H. Cordesman, Saudi Arabia Enters the Twenty-First Century: The Political, Foreign Policy, and Energy Dimensions (London: Praeger, 2003), p. 206.
[24] Mahan Abedin, “The Iranian Intelligence Services and the War on Terror,” Terrorism Monitor, Jamestown Foundation, May 20, 2004.
[25] Indian Express (New Delhi), Jan. 24, 2006.
[26] Husain Haqqani, “The Ideologies of South Asian Jihadi Groups,” Current Trends in Islamist Ideology, vol. 1, pp. 23-4; J. Millard Burr and Robert O. Collins, Alms for Jihad (Cambridge: Cambridge University Press, 2006), pp. 26-50.
[27] The Hindu (Chennai, Madras), Jan. 26, 2006.
[28] “Final Report of the Counter-Terrorism International Conference,” Riyadh, Feb. 5-8, 2005.
[29] The Indian Express (New Delhi), Jan. 24, 2006.
[30] The Hindu Business Line (Chennai), Mar. 29, 2005.
[31] Ibid.
[32] Hindustan Times, Jan. 25, 2006.
[33] “Delhi Declaration,” Joint Declarations and Statements, Ministry of External Affairs, New Delhi, India, Jan. 27, 2006.
[34] The Tribune (New Delhi), Jan. 27, 2006.
[35] Arab News, Jan. 6, 2005.
[36] Press Trust of India news agency, Jan. 21, 2006.
[37] “Quadrennial Defense Review Report 2006,” U.S. Department of Defense, Feb. 6, 2006, pp. 29-30; Richard R. Russell, “Oil for Missiles,” The Wall Street Journal, Jan. 25, 2006.
[38] “President Discusses Strong U.S.-India Partnership in New Delhi, India,” White House news release, Mar. 3, 2006.
[39] Blumenthal, “Providing Arms: China and the Middle East.”
[40] Thomas Woodrow, “The Sino-Saudi Connection,” China Brief, Jamestown Foundation, Oct. 24, 2002.
[41] Paul Kerr, “IAEA Board Seeks Strengthened Safeguards,” Arms Control Today, July/Aug. 2005.
[42] Ibid.
[43] On Sino-Israeli ties, see P.R. Kumaraswamy, “At What Cost Israel-China Ties?” Middle East Quarterly, Spring 2006, pp. 37-44; Dan Blumenthal, “Providing Arms: China and the Middle East,” Middle East Quarterly, Spring 2005, pp. 11-9. On India-Israel ties, see Harsh V. Pant, “India-Israel Partnership: Convergence and Constraints,” Middle East Review of International Affairs, Dec. 2004, pp. 60-73.
[44] Associated Foreign Press, Feb. 24, 2006.
[45] Financial Times, Jan. 4, 2006.
[46] Amir Ullah Khan, Mohammad Sadiq and Zafar H. Anjum, “To Kill the Mockingbird,” India China Economic and Cultural Centre, New Delhi, accessed June 28, 2006.
[47] “Reforming the National Security System—Recommendations of the Group of Ministers,” Feb. 19, 2001.
[48] Yoginder Sikand, “Intra-Muslim Rivalries in India and the Saudi Connection,” Jamia Hamdard University, accessed June 28, 2006.
[49] Pakkiasamy, “Saudi Arabia’s Plan for Changing Its Workforce.”
[50] Haqqani, “The Ideologies of South Asian Jihadi Groups.”
[51] Sikand, “Intra-Muslim Rivalries in India and the Saudi Connection.”
[52] Quoted in Bernard Haykel, “The Silence of Moderate Muslims,” The Dawn (Karachi), Dec. 5, 2002.
[53] Ibid.
[54] “What’s Terror? India, Saudi Differ,” Hindustan Times, Jan. 27, 2006.
[55] G. Parthasarthy, “Saudi-Pakistani Nexus on Terrorism,” The Tribune, Sept. 25, 2003; Husain Haqqani, “India’s Islamist Groups,” Current Trends in Islamist Ideology, vol. 3, pp. 10-23.
[56] B. Raman, “Al-Qaeda, the IIF and Indian Muslims,” International Terrorism Monitor, South Asia Analysis Group, paper no.1743 (34), Mar. 20, 2006.
[57] “Devastating Blows: Religious Repression of Uighurs in Xinjiang,” Human Rights Watch, Apr. 2005, p. 12.
[58] “China (includes Tibet, Hong Kong, and Macau),” International Religious Freedom Report 2005, Bureau of Democracy, Human Rights, and Labor, U.S. State Department, Nov. 8, 2005.
[59] Ibid.
[60] Ibid, p. 8.; Paul Wiseman, “China Equates Muslim Rebels with Terrorists,” USA Today, June 20, 2002; The Washington Post, Dec. 15, 2005.
[61] “China,” International Religious Freedom Report 2005.
[62] Igor Rotar, “The Growing Problem of Uighur Separatism,” China Brief, Jamestown Foundation, Apr. 15, 2004.