Arab News, Tues, Nov 28, 2023 | Jumada Al-Uola 14, 1445
Saudi Arabia’s trade surplus with China soars by 257% in September
RIYADH:
China maintained its position as Saudi Arabia’s primary trading partner in
September, dominating both exports and imports, according to the latest data
released by the General Authority of Statistics.
The trade surplus with China soared to SR6.67 billion ($1.78 billion),
reflecting a 257 percent surge compared to August.
During this period, Saudi Arabia recorded an increase in exports to China at
a growth rate of 34 percent reaching a total of SR18.99 billion. Exports
comprised mainly oil, to which this increase is attributed, and non-oil
products included chemical components, plastic, and rubber.
China’s share of Saudi Arabia’s exports also saw a rise from 14 percent in
August to 18 percent in September.
Recently, the People’s Bank of China and the Saudi Central Bank, also known
as SAMA, signed a local currency swap agreement valued at 50 billion yuan
($6.93 billion). This development, announced on Nov. 20, reflected the
growing momentum in bilateral relations between the two countries.
Saudi Arabia, the world’s leading oil exporter, and China, the largest
energy consumer, have broadened their relationship beyond oil-focused ties.
This diversification includes collaboration in security and technology.
The recently signed three-year local currency swap agreement is a key
initiative to enhance financial cooperation, increase the use of local
currencies, and boost trade and investment between Riyadh and Beijing,
according to a statement by China’s central bank.
Earlier in March, the state oil giant Saudi Aramco revealed two significant
deals aimed at increasing its multibillion-dollar investment in China,
solidifying its position as the country’s primary crude provider. These
deals marked the most significant announcements since Chinese President Xi
Jinping’s visit to Saudi Arabia in December, during which he advocated for
oil trade in yuan, a step that could diminish the dominance of the US
dollar.
The UAE stood as the primary non-oil export destination for Saudi Arabia,
with 83 percent of the country’s imports from the Kingdom being non-oil.
Saudi Arabia’s main exports to the UAE included mechanical, electrical, and
transport components, making up 56 percent of the total.
The Kingdom achieved a trade balance of SR43.74 billion in September,
marking a 27 percent increase from the previous month and reaching the
highest value in nearly five months.
While merchandise exports remained relatively stable compared to August, the
rise in the trade balance during September can be attributed to a 14 percent
decrease in merchandise imports that hit a five-month low at SR60.09
billion.
Non-oil exports saw a 14 percent decrease from the preceding month, totaling
SR16.39 billion. Nevertheless, this decline was almost balanced by a 7
percent rise in oil shipments, comprising 80.1 percent of overall exports
and reaching SR83.12 billion in September.
Mineral products played a significant role, constituting an 80 percent share
of total exports from Saudi Arabia, up from 75 percent the previous month.
The total value of mineral products exported increased by 6.4 percent,
reaching SR83.25 billion.
Japan, South Korea, and India trail China as the primary destinations for
the Kingdom’s exports.
Exports to Japan marked a 37 percent monthly increase, totaling SR11.37
billion during the same period, elevating its percentage share to 11
percent, up from 8 percent in August.
South Korea and India also experienced boosts in the percentage share of
Saudi exports, amounting to SR10.25 billion and SR9.7 billion, respectively.
The UAE and the US secured the fifth and sixth positions in terms of export
destinations. While exports to the UAE remained nearly unchanged at SR5.25
billion, exports to the US declined by 43 percent, totaling SR3.56 billion.
China, India, and Turkey trailed the UAE as the leading non-oil export
destinations in September. Chemical products, plastic, and rubber comprised
21 percent of non-oil exports to the UAE, 91 percent to China, 89 percent to
Turkey, 82 percent to India, 77 percent to Egypt, and 74 percent to the US.
Regarding Saudi Arabia’s imports, mechanical and electronic devices, along
with transport vehicles, constituted 40 percent of total imports in
September, amounting to SR23.8 billion.
However, this figure declined from SR28.69 billion in August. This, coupled
with a 29 percent decrease in vegetable product imports, contributed to over
62 percent of the monthly decline in imports between August and September.
Imports from China amounted to SR12.33 billion in September, constituting 21
percent of Saudi Arabia’s total imports, and they mainly constituted
industrial machinery and transport equipment.
The US and the UAE follow China as the top countries for Saudi imports.
Imports from the US totaled SR5.23 billion, accounting for 9 percent of the
total, while those from the UAE and India amounted to SR4 billion and SR3.5
billion, respectively.
Saudi Arabia primarily imports mechanical, electrical, and transport
equipment from China, the US, India, Germany, and Japan. Imports of base
metals and textiles also predominantly come from China and India.
Additionally, the majority of the Kingdom’s imports of pearls and jewelry
are sourced from the UAE and Switzerland, and mineral products from Egypt.
Of the items imported to Saudi Arabia, 46 percent are designated for
intermediate consumption, 34 percent for final consumption, and 21 percent
are allocated as fixed assets.
The ratio of non-oil exports to imports in Saudi Arabia stood at 34.5
percent in September, compared to 37.5 percent in August.
In September 2023, a non-oil trade surplus existed with the UAE and Kuwait,
while there was a trade deficit with Bahrain, Oman, and Qatar.
The trade deficit between Saudi Arabia and the Gulf Cooperation Council
countries contracted to SR388.5 million in September 2023, a significant
decrease from SR1.96 billion in the same month last year. This reduction is
attributed to the non-oil trade surplus with the UAE, which increased by 140
percent during this period.
Concerning future trade prospects, the Britain, Russia, India, China, and
South Africa bloc of countries, known as BRICS, invited Saudi Arabia and
other nations to join as full members starting January 2024 during its 15th
summit in South Africa.
BRICS emphasizes its economic strength for global recovery and addressing
supply chain disruptions, aiming to counter Western influence and the
dominance of the US dollar. Saudi Arabia is considering the invitation, with
Foreign Affairs Minister Prince Faisal bin Farhan expressing appreciation
and stating a thorough evaluation before potential membership by Jan. 1.