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Source: www.asiaecon.org |

CHINA TO INVEST IN MUSLIM HOLY SITES


  China has acquired a $1.8 billion contract from Saudi Arabia to invest in linking the Muslim holy city of Mecca with other holy sites outside of the city through the construction of a railroad. This project is expected to facilitate the annual pilgrimage process that attracts millions of visitors to Mecca. According to Saudi authorities, the project is due to complete by the next season of pilgrimage.


 

China has acquired a $1.8 billion contract from Saudi Arabia to invest in linking the Muslim holy city of Mecca with other holy sites outside of the city through the construction of a railroad. This project is expected to facilitate the annual pilgrimage process that attracts millions of visitors to Mecca. According to Saudi authorities, the project is due to complete by the next season of pilgrimage.

The contract was signed by Abdulah Ben Abdulaziz, the heir to the Saudi throne, and Hu Jintao, the Chinese president, during his first visit to the Kingdom. Hu Jintao’s visit, which lasted for three days, aimed at boosting economic ties between the two countries while discussing the latest developments in the region.

The Chinese Railroad Company is responsible for executing this project and is currently undergoing negotiations with the Saudi authorities concerning the details of the contract. Earlier  last month, the Saudi authorities had requested the Chinese government to appoint a suited company to execute the project, which is the first form of cooperation between the two countries concerning infrastructure development.

The project is expected to be completed within two years, where 35% of the entire project is expected to operate to accommodate the needs of pilgrims during the upcoming pilgrimage season. Furthermore, the railroad project is planned to expand further to not only link Mecca to the surrounding holy sites but also to the neighboring city of Medina, where pilgrims go to visit the first Mosque of Islam. The project encompasses four main railway lines that has the capacity to transport 20,000 pilgrims each hour.     

With very complementary economies, China and Saudi Arabia have enjoyed strong bilateral ties in recent years. China’s rapidly growing economy has fueled its need for energy resources, substantially raising the importance of cooperation with the oil rich country of Saudi Arabia as well as its oil producing neighboring countries.

Bilateral trade has experienced rapid growth, reaching a volume of $25 billion in 2007, more than 80 times the initial amount since both countries forged diplomatic ties 18 years ago. In 2008, trade volume between the two countries exceeded $41.8 billion. Both sides expect to increase ties by expanding current trade to include cooperation in fields such as environmental protection, vocational education and high technology.

China’s efforts to strengthen ties with Saudi Arabia is a crucial step towards increasing Beijing’s influence in the Gulf. Saudi Arabia is a major oil producer in the Middle East, a key player in the Cooperation Council for the Arab States of the Gulf (GCC) and a traditional ally of the United States.

Further, China is predicted to considerably strengthen GCC relations as experts predict the country to import 20% more oil from the region in the following years, going from the current 50% to 70% in 2015. China also seeks to increase phosphate and aluminum imports, which are abundant in GCC countries. Increased dependency on GCC oil, phosphate, and aluminum exports could result in further Chinese investment in the region in order to avoid any local political or economic instability.

Source: www.AsiaEcon.org

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Source: www.asiaecon.org |


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