The Petrodollar is said to be under threat. The ‘Harvard Political Review’ published an article on Dec 18, saying that “China has taken steps to negotiate a potential economic deal that could harm United States’ economic, social, and political supremacy. The deal regards increased Chinese influence over oil and the petrodollar …”
“…Recent conversations between Saudi Arabia and China have dealt with lifting the dollar off oil and replacing it with China’ national currency, the yuan. This motion directly threatens the petrodollar influence on the world and could
lift the roof off steady inflation in the United States, create unsupported national deficits, and stir economic turmoil in the United States …”
Deal on trading in crude oil is not the only collaborative zone between Saudi and China (China accounted for more than 15 percent of Saudi’s crude oil sales in 2018). On Dec 7, for example, China launched two Saudi Arabian Earth observation satellites by its Long March 2D rocket.
Down to earth, another example is that, according to Gulf Business’ Dec 13 report, a Saudi firm “has signed a deal to ship thousands of tonnes of shrimp to China … Bloomberg reports that export of the frozen crustacean have totaled more than 6,000 tonnes since last week … The kingdom’s shrimp exports to China, the world’s largest consumer of the sea creature, are expected to exceed 30,000 tonnes by the end of the year …”
Furthermore, what is diplomatically important is that Saudi and China have jointly found a common enemy — Canada. Canada’s Global News said on Dec 14 that “First …Trump attacked Canada on trade. Then Saudi Arabia punished it for speaking up for human rights. Now China has the country in its cross-hairs …” While the Jamal Khashoggi issue was being stir fried by Washington, Reuters reported from the G20 forum in Argentina on Dec 1 that “… China firmly supports Riyadh in its drive for economic diversification and social reform, President Xi Jinping told Saudi Crown Prince Mohammed bin Salman …”
Therefore, it is not a surprise to this: “Pompeo warns Senate not to push Saudi Arabia into China’s arms …” as reported by Washington Examiner on Dec 24.
At least two points to note. Firstly, the closer Saudi-China ties indicate the on-going formation of a multi-polar world. Do not overlook the reality that Saudi is also improving its relation with Russia. It is why President Trump’s pragmatic wisdom is so outstanding. He has recognized this trend, and understands that it will be too costly for the U.S. to maintain its unipolar global supremacy status. Therefore, his goal is to make America great, not just ‘again’ but also in a longer horizon under the shadow of multi-polarity.
Secondly, whatever the items are (petrodollar or oil or shrimp or anything else), all Saudi-China deals will improve these two nations’ relation but no deal whatsoever can let China be influential in the Middle East. Occasionally, Beijing may act as mediator, or act to balance out some dynamics. However, the Middle East belongs to the regional powers in the Middle East. The Middle East was, is, and will continue to be a civilization fundamentally different from the West and also from East Asia. The nations there will work out a way of their own to live their life peacefully.
What Saudi is doing, including the downplay of the petrodollar, is merely an attempt to bring the overriding power back to the Middle East. Neither the U.S. nor China nor Russia can reign this region. If there is anything Harvard has to worry about, it is multi-polarity, not China.
The opinions expressed are those of the author, and not necessarily those of China Daily Mail.