(Aug 2): Saudi Arabia’s wealth fund signed preliminary agreements worth as much as US$50 billion (RM226.50 billion) with six Chinese financial institutions, in the latest example of the kingdom’s deepening ties with Beijing.

The deals were done to boost two-way capital flows through both debt and equity, according to a statement from the US$925 billion Public Investment Fund (PIF). 

The memoranda of understanding were signed with the Agricultural Bank of China, Bank of China, China Construction Bank, China Export & Credit Insurance Corp, Export-Import Bank of China, and the Industrial and Commercial Bank of China.

While the US remains by far Saudi Arabia’s most important economic and strategic partner, the kingdom — and neighbouring United Arab Emirates — have moved closer to Beijing in recent years. 

PIF governor Yasir Al Rumayyan — a key lieutenant of Crown Prince Mohammed bin Salman and the country’s point person for Saudi-China relations — led a large delegation to Beijing last month and met with Chinese Vice Premier He Lifeng. 

That trip included a slew of announcements between the PIF and some of China’s largest renewables manufacturing firms. The Asian nation’s biggest steel producer also recently more than doubled its investment in a venture in the kingdom to US$1 billion.

Meanwhile, Chinese investors have poured money into two new exchange-traded funds tracking Saudi Arabian shares as the dismal performance of local equities supercharges demand for overseas assets.

Uploaded by Tham Yek Lee