Saudi Arabia and China’s Baosteel to establish steel complex

Al-Monitor Staff

May 1, 2023

BEIJING, CHINA - MARCH 17: Chinese Premier Li Keqiang (2nd-L) meets with Saudi Arabia's King Salman bin Abdulaziz Al Saud (2nd-R) at Great Hall of the People on March 17, 2017 in Beijing, China. At the invitation of President Xi Jinping, King Salman Bin Abdul-Aaziz Al-Saud of the Kingdom of Saudi Arabia will pay a state visit to China from March 15 to 18, 2017. (Photo by Lintao Zhang - Pool/Getty Images) — Chinese Premier Li Keqiang (2nd-L) meets with Saudi Arabia's King Salman bin Abdulaziz Al Saud (2nd-R) at Great Hall of the People on March 17, 2017 in Beijing, China. — Lintao Zhang - Pool/Getty Images

Saudi Arabia announced on Monday a steel manufacturing agreement with a Chinese company. The deal constitutes the latest example of growing cooperation between Saudi Arabia and China.

Saudi Arabia’s state-owned oil company, Aramco, and its sovereign wealth fund, the Public Investment Fund, signed a shareholders’ agreement with Baosteel to establish a steel plate manufacturing complex in eastern Saudi Arabia. The joint venture, which is subject to regulatory approval, will be located in the Ras al-Khair Industrial City. They plan to produce 1.5 million tons of steel per year via natural gas power, Aramco said in a press release.

Why it matters: Saudi Arabia and China are rapidly strengthening their relations. In March, China brokered the relations resumption agreement between Saudi Arabia and Iran. Later the same month, Saudi Arabia’s Cabinet approved the decision to join the China-led Shanghai Cooperation Organization alongside Russia and Iran.

The friendship between the two countries involves energy as well. Saudi Arabia was China’s second-largest oil producer in January and February of this year. The following are some notable energy developments between Saudi Arabia and China in the past year or so: