China and Saudi Arabia’s financial relationship is becoming increasingly significant, with China set to issue U.S. dollar-denominated bonds in Saudi Arabia, marking its first such issuance in three years. This decision highlights the strengthening economic ties between the two nations, with Saudi Arabia relying heavily on Chinese investment to support its ambitious development agenda.
Saudi Arabia’s Vision 2030 project, aimed at transforming the kingdom into a technology-driven, eco-friendly economy, has grown to a valuation of $1.3 trillion. China has played a key role in this initiative, particularly in supporting Neom, the highly futuristic mega-city at the heart of Vision 2030. In August, Saudi Arabia’s Public Investment Fund, the country’s sovereign wealth fund, signed agreements with Chinese lenders totaling $50 billion, and numerous Chinese firms have engaged in technology deals as part of the Neom project. Additionally, Saudi Arabia has backed Chinese tech projects, including support for a competitor to OpenAI.
Recently, Saudi Arabia launched two new exchange-traded funds (ETFs) that provide Saudi investors with access to Chinese and Hong Kong markets, facilitating more direct exposure to Chinese equities.
These strengthened ties, however, have drawn U.S. attention. Earlier this year, the U.S. proposed technology and security partnerships to Saudi Arabia, contingent upon Saudi Arabia distancing itself from its expanding tech alliance with China.
