China’s Oil Strategy: The Potential of the Strategic Partnership with Saudi Arabia

Abstract

This thesis focuses on the growing relationship between China, the world’s second-largest oil consumer, and Saudi Arabia, the world’s top oil exporter. The high interdependence between China and Saudi Arabia represents a theoretical challenge: Does economic interdependence increase or decrease the probability of conflict between China and other significant energy users, notably the United States, over Middle East oil? The study is literature-based and expanded by exploratory case study research using different variables or indicators (import dependence, trade, energy, arms sales and political factors). The thesis’ main aim is to investigate the causes of China's motives to establish a strategic relationship with Saudi Arabia and its implications for the United States, using a qualitative method with quantitative resources as primary data and the state as unit of analysis. On the basis of the theoretical frameworks, it raises three hypotheses, respectively: (1) China is not seeking to challenge the United States in the Middle East; (2) China will contribute to the stability of the Middle East because it expects its trade and energy imports from the region to increase in the future; and (3) China will not use the military means to protect its interests in the Middle East. To verify these hypotheses, the study attempts to address the theoretical flaws of both realism and liberalism in regard to Sino-Saudi relations, guided by Trade Expectation Theory (TET). The finding is simple: China’s policy of strengthening its relationships with Saudi Arabia is neither aimed at undermining U.S. regional interests nor aimed at challenging the U.S.’s dominant position; it is primarily driven by economic imperatives