The strategy of China is always driven by a desire to obtain local user data. Chinese laws force Huawei to collect information from the countries in which they operate and share it with Beijing. The United States has repeatedly asked the Saudi Kingdom to restrict the use of technologies developed by Huawei. China's growing engagement in the Middle East, coinciding with U.S. disengagement and the application of sanctions on Russia, has strengthened Beijing's credibility as an economic partner for many states in the area and as a diplomatic and military player. In particular, ties between China and Saudi Arabia are expanding rapidly, involving economics, diplomacy, intelligence and regional security. For the U.S., the real risk is increased Chinese state-sponsored espionage throughout the Middle East
Chinese tech giant Huawei on Tuesday signed a memorandum of understanding with several universities in Saudi Arabia on the sidelines of the LEAP Tech Conference 2024 in Riyadh. This is stated in a statement from Huawei.
Representatives from Huawei and the University of Jeddah sign talent development Memorandums of Understanding (MoUs) on the sidelines of the LEAP Tech Conference 2024 held in Riyadh, Saudi Arabia, March 5, 2024. Chinese technology giant Huawei on Tuesday signed with several Saudi universities talent development MoUs on the sidelines of the LEAP Tech Conference 2024 held in Riyadh, according to a statement by Huawei. (Xinhua/Wang Haizhou)
It is clarified that these agreements involve providing higher education institutions, including King Khalid University, Jeddah University and Shaqr University, with advanced technologies to train and empower students through the Huawei Information and Communications Technology (ICT) Academy.
Zhao Liang, president of Huawei Tech Investment Saudi Arabia, said, "Huawei is proud to partner with leading universities as part of our ongoing efforts to support the kingdom's universities in cultivating talent to meet the demands of the ICT sector, providing the sector with high-quality talent for its development."
King Khalid Faleh al-Solami University President, for his part, noted the very high interest in advanced technologies among young staff in Saudi Arabia. "That is why we are confident that the collaboration with a leading technology company like Huawei will be a great success," he stressed.
Representatives from Huawei and Shaqra University sign talent development Memorandums of Understanding (MoUs) on the sidelines of the LEAP Tech Conference 2024 held in Riyadh, Saudi Arabia, March 5, 2024. Chinese technology giant Huawei on Tuesday signed with several Saudi universities talent development MoUs on the sidelines of the LEAP Tech Conference 2024 held in Riyadh, according to a statement by Huawei. (Xinhua/Wang Haizhou)
Huawei's new data center
Last September, Huawei announced the opening of a cloud data center in Riyadh, the Saudi capital, as part of its efforts to expand its online service offerings in the Middle East.
Photo taken on Sept. 4, 2023, shows the Huawei Cloud Summit Saudi Arabia 2023 held in Riyadh, Saudi Arabia. (Xinhua/Wang Haizhou)
The Beijing-based company said the new center will become a key data center for Huawei's cloud services in the Middle East, Central Asia and Africa.
The new data center will provide a range of cloud services, including infrastructure, databases, big data and artificial intelligence, the note said.
Chinese, Saudi Arabian Companies Announce USD 200 Million Partnership to Manufacture Surveillance Hardware
On 20 February, Dahua Technology and Saudi Arabia’s Industrial Company for Electronics (doing business as Alat) signed a partnership worth USD 200 million to manufacture surveillance hardware in Saudi Arabia. Per the partnership, the two companies established a joint venture, Alat AIVisio Technology Co. Ltd. (埃耐特人工智能视觉科技有限公司), which will manufacture sensors to be used in smart cities as well as establish a research and development centre in Saudi Arabia. Alat is owned by Saudi Arabia’s Public Investment Fund (PIF), a sovereign wealth fund. In 2023, PIF direct investments in China exceeded USD 1 billion.
China, Saudi Arabia Partner to Increase Air Transport, Freight Co-operation
On 21 February, the Saudi Arabian General Authority of Civil Aviation and the Civil Aviation Administration of China signed an agreement to expand air transport co-operation. The agreement includes an increase in number of air transportation visits, greater air traffic, and a commitment to develop regulatory frameworks to promote increased trade and transportation between the two countries. The agreement is a means to boost bilateral economic activity and is in line with Saudi Arabia’s Vision 2030, a development plan to diversify the country’s economy away from hydrocarbons.
China's strategy
China's growing engagement in the Middle East, coinciding with U.S. disengagement and the application of sanctions on Russia, has strengthened Beijing's credibility as an economic partner for many states in the area and as a diplomatic and military player. In particular, ties between China and Saudi Arabia are expanding rapidly, involving economic, diplomatic, intelligence, and regional security.
There is no doubt that China's growing presence in the Middle East presents a challenge to the U.S. but also to allies around the Mediterranean. "With such a large military presence in the region, the U.S. needs to make sure that China does not get its hands on sensitive U.S. technology," Senator Murphy said during a hearing in the U.S. Congress. "I was opposed to the U.S. selling F-35 aircraft and Reaper drones to the UAE, and I don't want China to get a monopoly on energy trade in the Middle East," he added.
For decades, economic ties between the two countries were limited to crude oil exports, but in recent years the relationship has rapidly diversified, reflecting China and Saudi Arabia's desire to advance economic relations beyond the traditional focus on energy resources alone.
Indeed, the Chinese approach has shifted from being purely transactional to being more multifaceted and intertwined with future economic and political developments in Saudi Arabia and other Persian Gulf countries.
Beijing is attempting to surrogate the United States as a regional player of geoeconomic and strategic influence.
By integrating its own technologies into the local digital infrastructure, Beijing paves the way for building new long-term business dependencies.
Regarding Huawei's presence in the Middle East, and more specifically in Saudi Arabia, expertee Niu Xinchun recently said that the "U.S. attaches great importance to cooperation with Middle Eastern countries in high-tech areas, such as 5G and satellite navigation. This is a whole set of technological and economic ecosystems, jointly built by the United States and Middle Eastern countries. Washington is concerned that the use of Chinese technology threatens the security of its entire system, and is even more concerned that China will replace the U.S. system."
Chinese laws force Huawei to collect information from the countries in which they operate and share it with Beijing.
According to Huawei's official statement, the company has no connection with the Chinese state, as can be seen from the FAQs (Frequently Asked Questions) published on the company's official website.
However, US intelligence agencies allege that the Chinese government helped finance Huawei, as well as enabled the theft of intellectual property.
According to new CIA revelations, Huawei received funding from the People's Liberation Army, the National Security Commission and a third branch of China's state intelligence network.
On January 28, 2019, the US Department of Justice has indicted the company for theft of trade secrets, wiretapping and obstruction of justice. Following this, Huawei was added to the US Department of Commerce's Entity List for export controls on May 16, 2019.
Since then, the US government has continued to take action to ensure that national telecommunications networks were free from Chinese suppliers. In March 2021, the Commerce Department announced that it had served subpoenas on “multiple Chinese companies that provide ICT services in the United States,” without specifying which companies were targeted.
The move was completed pursuant to Executive Order 13873 former President Trump's Information and Communications Technology Services Supply Chain Protection Act, for which the Department of Commerce issued implementing rules in January 2021.
Separately, the Federal Communications Commission, the Agency independent government for communications, has published a new list of information and communications technology (ICT) equipment and services "deemed to pose an unacceptable risk to national security". The list identified five Chinese companies: Huawei, ZTE, Hytera Communications, Hikvision Digital Technology and Dahua Technology.
Therefore, the United States has repeatedly asked the Saudi Kingdom to restrict the use of technologies developed by Huawei.
The close ties between China and the Gulf Kingdom.
Saudi Arabia has been the largest crude oil exporter to China for years. The Saudi Kingdom has also been Beijing's most important trading partner in the Middle East for more than two decades. In turn, Beijing has been Saudi Arabia's largest trading partner since 2013.
The sense that the relationship between the two countries was evolving into something more important was distinctly felt last December during President Xi Jinping's visit to Saudi Arabia. Indeed, the two governments identified a broad spectrum of future cooperation, including on energy, automobiles, supply chains, communications, transportation, mining and in the financial sector.
Countries that are members of the BRI, especially developing ones, are increasing a technological dependence from Beijing, in part because many Chinese companies have improved their competitiveness with advanced and affordable infrastructure and devices.
Beijing and Riyadh have also found an overlap between China's Belt and Road Initiative with Saudi Arabia's Vision 2030 reform program, generating cooperation on new energy resources including solar, wind and hydropower and on the digital economy, such as fifth-generation (5G) telecommunications networks.
The scope of these deals indicate , therefore, an evolution of China's relationship with Middle Eastern countries. Indeed, over the past decade, Beijing's strategy has become more deliberate and intentional, and the diversification of economic ties with Saudi Arabia is one example.
Beijing is no longer content to be just a major crude oil customer in the region. Instead, it wants to maximize the area's potential as a market for Chinese goods, labor, and technology, inserting itself into the area's economic future through long-term investments and collaborations.
For the U.S., the real risk is increased Chinese state-sponsored espionage throughout the Middle East.
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