China to invest $55 billion in loans and investments to the Middle East

Chinese President Xi Jinping tours Middle East, inks deals worth billions in bid for influence

Chinese President Xi Jinping has announced billions of dollars in special loans and investments in the Middle East as Beijing seeks to boost its economic ties and clout in the oil rich region.

Mr Xi offered China’s financial support in an address to the Cairo-based Arab League after holding talks with Egypt’s President Abdel Fattah al-Sisi during his first tour to the Middle East as president.

He arrived in Cairo late Wednesday from Saudi Arabia and will travel on Friday to Iran, the last leg of his three-nation tour.

Beijing has long taken a backseat to other diplomatic players in the Middle East but analysts say the region is crucial to Mr Xi’s signature foreign policy initiative — known as “One Belt One Road” — touted as a revival of ancient Silk Road trade routes.

China, the world’s second-largest economy, also relies heavily on oil and gas imported from the energy-rich Middle East.

Mr Xi offered $US55 billion ($79 billion) in loans and investments to the Middle East.

“We are not setting up proxies or building a sphere of influence in the region,” Mr Xi told the Arab League.

On Thursday, Mr Xi signed a slew of separate agreements with Cairo for undertaking projects in sectors like electricity, transportation and infrastructure.

“These projects will offer a new impetus to the economic development of Egypt,” he said in a joint statement with Mr Sisi.
Egypt’s President Abdel Fattah al-Sisi and China’s President Xi Jinping shaking hands with children.

Photo: Egypt’s President Abdel Fattah al-Sisi (L) and China’s President Xi Jinping signed a range of deals in Cairo. (AFP: Egyptian Presidency)

In Saudi Arabia, Mr Xi met with King Salman and oversaw the opening of a joint-venture oil refinery in the Yanbu Industrial City on the Red Sea.

Saudi Arabia is China’s biggest supplier of crude.

Few details have emerged of Mr Xi’s talks with leaders in Riyadh, but the Saudi Press Agency reported that the two countries decided to establish a “comprehensive strategic partnership”.

During his visit to Riyadh, Mr Xi had been expected to seek to ease tensions between Saudi Arabia, the region’s main Sunni power, and Shiite rival Iran.

Saudi Arabia and a number of its Sunni Arab allies broke diplomatic ties with Tehran this month after protesters angry over Riyadh’s execution of a prominent Shiite cleric ransacked Saudi diplomatic missions in Iran.

Mr Xi was expected in Iran, just days after sanctions were lifted when Tehran implemented its historic nuclear deal with world powers.

China, with the United States, Britain, France, Germany and Russia, was among the countries that reached the agreement with Iran in July to curtail its nuclear activities in exchange for ending international sanctions.


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