Saudi-Chinese cooperation scales new heights with each passing year

Children play with a quadruped robot at the 2022 World Robot Conference in Beijing. (All photos: AFP)
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Updated 08 December 2022

Saudi-Chinese cooperation scales new heights with each passing year

  • 2022 turned out to be the year when Sino-Saudi collaborative projects in various fields truly prospered
  • China seeking to bolster its energy ties with the Gulf countries to secure adequate oil supply

RIYADH: Saudi-Chinese ties have prospered in 2022 amid the high cooperation efforts between the countries across various fields, including aviation, energy, tourism, artificial intelligence, technology and more.

On Nov.27, Saudi Arabia’s deputy foreign minister met with the Chinese ambassador to the Kingdom in Riyadh, Saudi Press Agency reported.

During the meeting, Waleed Al-Khuraiji and Chen Weiqing reviewed bilateral relations and ways of enhancing them to serve common interests. They also discussed issues of common interest.

Aviation

Earlier this year, in October, Saudi Arabia and China signed a memorandum of understanding to boost the number of flights and stations between the two countries. 

The MoU also aims to promote air traffic growth further and bolster cooperation in the air transport sector field between both countries, Zawya reported.

Energy

In September, the regional organization Arab League announced the first of its kind Arab-China summit to be hosted by Saudi Arabia in December, reflecting a milestone in the strategic collaboration between Arab countries and the Asian giant.

According to Hong Kong-based newspaper South China Morning Post, Beijing is seeking to bolster its energy ties with the Gulf countries to secure sufficient supply.

Tourism

In September, the Saudi Tourism Authority and Shanghai-based financial firm UnionPay signed an MoU to boost the number of Chinese visitors to Saudi Arabia.

Under the agreement, the Chinese state-owned financial services company will facilitate payment operations within the Kingdom for UnionPay card holders, the Saudi Press Agency reported.  

Culture

As part of Saudi-Chinese cultural cooperation, King Abdulaziz Public Library signed an MoU and collaboration with the Bayt El-Hekma Chinese Group in April.

The agreement aims to enhance cooperation between Saudi Arabia and China in different cultural, knowledge, and language fields of interest to both sides.

It also includes exchanging publication services and cultural visits between the two countries, besides holding scientific meetings and specialized exhibitions and activating cultural commonalities through forums.  

Artificial Intelligence

In March, Riyadh-based aerospace company TAQNIA and solution provider TAQNIA ETS signed an MoU with Chinese aerospace firm Star Vision to elevate the space sector’s supply chain and work hand in hand on artificial intelligence applications and technologies.

Under the MoU, all parties will participate in collaborative research and work together to facilitate the development of top-notch space technologies, satellites, and geospatial products, trade publication Times Aerospace reported.

The MoU aims to introduce localized services and products that align with the Kingdom and the region’s strategic space and geospatial industry.

 Technology

In March, Saudi Advanced Communications and Electronics Systems Co., ACES, partnered with China Electronics Technology Group to manufacture unmanned aerial vehicle payload systems in the Kingdom.

Under the partnership, China Electronics Technology Group, the state-owned defense conglomerate specializing in dual-use electronics, aims to aid ACES in establishing a research and development center and manufacturing team for various types of unmanned aerial vehicle payload systems.  

Oil

In March, a Saudi Arabian Oil Co. unit signed an initial agreement with China Petroleum & Chemical Corp., known as Sinopec, for potential downstream collaboration in China.  

The subsidiary, Saudi Aramco Asia Company Ltd., and Sinopec aim to support Fujian Refining and Petrochemical Co. in conducting a feasibility study into the optimization and expansion of capacity, according to a statement.  

Building & Construction

In January, Saudi Aramco and the China Building Materials Academy announced plans to launch a new Nonmetallic Excellence and Innovation Center collaboratively.

Also referred to as NEXCEL, the new center will be based in Beijing and advance the use of nonmetallic materials in the building and construction sector.


Pakistani rupee plummets to all-time low against US dollar at 271.36

Updated 14 min 36 sec ago

Pakistani rupee plummets to all-time low against US dollar at 271.36

  • Pakistan's rupee declines by Rs2.53 or 0.93% against US dollar, according to central bank data
  • Pakistani rupee continues free fall after currency dealers removed cap on exchange rate last week

KARACHI: Pakistan's rupee continued its free fall against the US dollar on Thursday, with the greenback reaching an all-time high of Rs271.36, a week after Islamabad removed artificial controls from its exchange market to secure an International Monetary Fund (IMF) bailout package. 

After Pakistan's currency dealers announced removing the exchange rate cap last week, the rupee declined by a massive Rs25 or 9.6% in a single day. With a staggering $3.6 billion in reserves barely enough to cover import payments for a month, Islamabad has agreed to the IMF's tough conditionalities to revive a stalled $7 billion loan program it hopes would lead to more inflows from multilateral organizations and "friendly countries."

The IMF has been pushing Pakistan to remove artificial controls from its exchange market. Experts have warned the rapid weakening of the rupee would usher in an inflationary storm in the country. 

On Thursday, Pakistan's central bank shared data on Twitter according to which the rupee declined by Rs2.53 or 0.93%, with the greenback selling at Rs271.36 in the interbank market. 

 

 

 

"The Pakistani rupee witnessed pressure and closed at a record low against the U.S. dollar mainly due to less inflows of export proceeds," Zafar Sultan Paracha, general secretary of the Exchange Companies Association of Pakistan, said. 

"The country’s political and economic situation also continued to exert pressure on the rupee," he added. 

Earlier this week, international credit ratings agency, Finch Ratings, said Pakistan's rupee would further weaken and exacerbate inflation in the country.

Official data showed on Wednesday that Pakistan’s inflation rate surged to 27.6 percent, the highest in over four decades, on a year-on-year basis in January 2023. 

“In the near term, it [weakening rupee] could exacerbate imported inflationary pressure, and may eventually result in steeper policy rate hikes from the SOP,” Finch said. 


Amid economic crisis, Pakistan finance minister asks charity network to raise $2 billion from expats

Updated 02 February 2023

Amid economic crisis, Pakistan finance minister asks charity network to raise $2 billion from expats

  • Saylani Welfare International Trust sought Ishaq Dar’s approval to get interest-free debt for the country from Pakistani diaspora
  • The country is facing severe dollar liquidity crunch amid depleting foreign exchange reserves, growing import payment demand

KARACHI: Pakistan’s finance minister Ishaq Dar on Thursday allowed a charity organization operating in the country to voluntarily raise about $2 billion in debt to support the national exchequer amid ongoing economic turmoil.

Addressing a gathering on the Islamization of economy, Dar told the chairman of Saylani Welfare International Trust, Bashir Farooqui, he was free to generate money from overseas Pakistanis by utilizing his network. However, he said all the transactions must be kept transparent.

“The transactions must be transparent and well documented and the money must be raised under the defined procedures,” the minister said while participating in the gathering through a video link from Islamabad.

Farooqui had sought permission from Dar to generate the required amount during the course of the program.

“The debt will be raised for five years and will be interest-free,” he said. “The collected amount will be handed over to the government.”

Pakistan's finance minister Ishaq Dar addresses an event focusing on the Islamization of the country's economy through a video link from Islamabad, Pakistan, on February 2, 2023. (Photo courtesy: Finance Ministry)

Pakistan is currently facing an acute dollar liquidity crunch with official foreign exchange reserve down to $3.6 billion against the average import cover of $5 billion.

Responding to the Saylani Welfare Trust chairman, the finance minister asked him to coordinate with the central bank to determine the contours and mechanism of the proposed scheme while directing State Bank of Pakistan (SBP) officials to facilitate and record any inflows through meticulous documentation.

Dar also said the subject of Islamic economic system came very close to his heart, adding that he prayed for the elimination of interest-based financial environment.

“One of the actions taken in this regard has been the formation of a high-level steering committee consisting of all key stakeholders, including the finance ministry and central bank officials, Securities and Exchange Commission of Pakistan and Shariah experts,” he said.

Pakistan’s Federal Shariat Court (FSC) directed the government last April to eliminate riba – or interest – within five years.

Dar maintained it was possible to Islamize Pakistan’s economy even before the given deadline.

“There is no reason why we can’t achieve the Islamization of economy before five years,” he said.


Iraqi PM says banking reforms reveal fraudulent dollar transactions

Updated 01 February 2023

Iraqi PM says banking reforms reveal fraudulent dollar transactions

  • Iraq has in recent months been making efforts to ensure its banking system is compliant with the international electronic transfer system known as SWIFT

BAGHDAD: Iraq’s premier said Tuesday that new banking regulations had revealed fraudulent dollar transactions made from his country, as the fresh controls coincide with a drop in the local currency’s value.
Iraq has in recent months been making efforts to ensure its banking system is compliant with the international electronic transfer system known as SWIFT.
Referring to the new controls, Prime Minister Mohammed Shia Al-Sudani hailed “a real reform of the banking system,” but denounced “falsified invoices, money going out fraudulently,” in particular as foreign currency payments for imports.
“That is a reality,” he said in an interview on state television.
The adoption of the SWIFT system was supposed to allow for greater transparency, tackle money laundering and help to enforce international sanctions, such as those against Iran and Russia.
An adviser to Sudani had said that since mid-November, Iraqi banks wanting to access dollar reserves stored in the United States must make transfers using the electronic system.
The US Federal Reserve will then examine the requests and block them if it finds them suspicious.
According to the adviser, the Fed had so far rejected 80 percent of the transfer requests over concerns of the funds’ final recipients.
Before the introduction of the new regulations, “we were selling $200 million or $300 million a day,” Sudani said.
“Now, the central bank provides $30 million, $40 million, $50 million,” he said, questioning: “What were we importing in a single day for $300 million?“
“There are products that were entering (Iraq) for prices that make no sense. Clearly, the objective was to take foreign currency out of Iraq,” he said. “This must stop.”
Money may have been transported to Iraq’s autonomous Kurdistan province “and from there to neighboring countries,” Sudani said, without specifying whether he was referring to Turkiye, Iran or war-torn Syria.
He said the new controls had been planned for two years, in accordance with an agreement between Iraq’s central bank and US financial authorities, and deplored previous failures to put them in place.
Iraq, which is trying to move past four decades of war and unrest, is plagued by endemic corruption.
The official exchange rate is fixed by the government at 1,470 dinars to the dollar, but the currency was trading at around 1,680 on Tuesday on unofficial markets amid dollar scarcity.
The drop has sparked sporadic protests by Iraqis worried about their purchasing power.
Foreign Minister Fuad Hussein and the new central bank chief will be among a delegation traveling to Washington on February 7 to discuss the new mechanism and the fluctuating exchange rate, Sudani said.


Bangladesh secures $4.7 billion from IMF as Pakistan, Sri Lanka see delays

Updated 31 January 2023

Bangladesh secures $4.7 billion from IMF as Pakistan, Sri Lanka see delays

  • Bangladesh has seen a sharp widening of its current account deficit, depreciation of its currency
  • Pakistan, IMF negotiations expected to begin from today as Islamabad seeks to shore up its foreign reserves

The International Monetary Fund (IMF) has approved loans of $4.7 billion to Bangladesh for disbursal starting immediately, making it the first to secure such funds out of three South Asian countries that applied last year amid economic trouble.

The loans are a win for Prime Minister Sheikh Hasina ahead of a general election early next year and will help the country, which has seen a sharp widening of its current account deficit, depreciation of the taka currency and a decline in its foreign exchange reserves.

Bangladesh will get about $3.3 billion under the IMF's extended credit facility and related arrangements, with an immediate disbursement of about $476 million. The IMF executive board also approved about $1.4 billion under its newly created Resilience and Sustainability Facility for climate investments for Bangladesh, the first Asian country to access it.

The IMF said the loans will "protect macroeconomic stability and rebuild buffers, while helping to advance the authorities’ reform agenda". The agenda includes creating fiscal space to enable greater social and developmental spending, strengthening Bangladesh's financial sector, boosting fiscal and governance reforms and building climate resilience.

"Since independence, Bangladesh has made steady progress in reducing poverty and significant improvements in living standards," Antoinette M. Sayeh, the IMF's deputy managing director, said in a statement.

"However, the COVID-19 pandemic and subsequent Russia’s war in Ukraine interrupted this long period of robust economic performance," Sayeh added. "Multiple shocks have made macroeconomic management challenging in Bangladesh."

The country last year also sought $2 billion from the World Bank and the Asian Development Bank amid efforts to bolster its foreign exchange reserves.

Bangladesh's regional counterparts, Sri Lanka and Pakistan, are doing much worse economically but have not been able to get final approval for IMF loans.

Bangladesh's current account deficit hit a record $18.7 billion in the last financial year, which ended on June 30, as exports of garments failed to offset a surge in energy costs. The Bangladesh central bank expects the deficit to fall to about $6.8 billion at the end of the current fiscal year.

The government has also raised fuel and energy prices in recent months as it approached the IMF. It announced a 5% increase in retail power prices from Wednesday, the second such rise this month.


IMF mission due in Pakistan tonight to discuss resumption of stalled loan program

Updated 30 January 2023

IMF mission due in Pakistan tonight to discuss resumption of stalled loan program

  • A successful IMF visit is critical for Pakistan, which is facing an increasingly acute balance of payments crisis
  • Pakistan is desperate for external financing, with only enough forex reserves to cover three weeks of impotts

ISLAMABAD: An International Monetary Fund (IMF) mission will land in Pakistan tonight, Monday, to discuss a stalled ninth review of the country's current funding program, Pakistani media widely reported.

A successful IMF visit is critical for Pakistan, which is facing an increasingly acute balance of payments crisis and is desperate to secure external financing, with less than three weeks' worth of import cover in its foreign exchange reserves.

“The [IMF] delegation will stay in Pakistan for 10 days,” Samaa Digital, a leading Pakistani news portal, reported. “During the visit, the delegation will be briefed about the country’s economic performance during the second half of 2022 … The situation arising from $30 billion losses incurred by the recent floods will also be conveyed to IMF.”

The government will also brief the IMF delegation on actions it has taken to improve tax revenue and exchange rate conditions, as well as reforms in the energy sector and steps taken to squeeze the current account deficit.

Last week, Pakistan's ministry of finance announced petrol and diesel prices would rise by 35 rupees ($0.1400) a litre. Last week, the Pakistani rupee lost close to 12% of its value after the removal of price caps that were imposed by the government but which were opposed by the IMF.