China is strengthening its financial connections with Saudi Arabia by selecting the kingdom as the location for its first U.S. dollar bond issuance in three years, underscoring growing collaboration between the two nations. Saudi Arabia, in turn, is leveraging Chinese investments to drive forward its Vision 2030 project, a transformative plan to modernize the Saudi economy, valued at approximately $1.3 trillion. This initiative focuses on sustainability, technological advancement, and large-scale infrastructure development.
A significant part of this collaboration involves Neom, a futuristic megacity project that Saudi Arabia hopes to fund through substantial Chinese investments. In recent years, Saudi Arabia’s Public Investment Fund has secured deals worth $50 billion with Chinese lenders. The partnership extends into technology, as seen when Saudi Arabia backed a Chinese AI company competing with OpenAI, and further collaboration emerged in October with Saudi Arabia’s launch of two new exchange-traded funds targeting Hong Kong and Chinese markets, facilitating Saudi investment in Chinese equities.
However, this growing alliance has sparked concerns in the United States. In response, the U.S. has proposed tech and security deals to Saudi Arabia, contingent on the kingdom limiting its partnership with China in the technology sector.