CONFIDENTIAL

FM RIYADH

IMMEDIATE FCO

TELNO 491

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OF 22101OZ JULY 90

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170733

MDHIAN 9767

MJ 22/7

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INFO PRIORITY PEKING, WASHINGTON, AHONG KONG, ACTOR, CABINET OFFICE INFO PRIORITY MOSCOW, PARIS ESKMISENEW YORK Taken

INFO SAVING MIDDLE EAST POSTSX

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OUR TELNO 486: SAUDI CHINESE RELATIONS

1. ON 21 JULY THE FOREIGN MINISTERS OF SAUDI ARABIA AND THE PRC SIGNED IN RIYADH AN AGREEMENT TO ESTABLISH DIPLOMATIC RELATIONS AT AMBASSADORIAL LEVEL. THE EVENT HAS BEEN PROMINENTLY REPORTED IN THE SAUDI PRESS. A JOINT STATEMENT DESCRIBED THE EVENT AS A STEP OF MAJOR REGIONAL AS WELL AS BILATERAL SIGNIFICANCE. THE CHINESE GOVERNMENT GAVE ITS SUPPORT TO SAUDI ARABIA'S EFFORTS TO ACHIEVE SECURITY, STABILITY AND ITS NATIONAL INTERESTS. IN TURN THE SAUDI GOVERNMENT RECOGNISED THE GOVERNMENT OF THE PRC TO BE THE SOLE LEGAL GOVERNMENT REPRESENTING THE CHINESE PEOPLE AS A WHOLE. THE PRESS ALSO REPORTED THAT IT WAS INTENDED THAT THE EMBASSY OF NATIONALIST CHINA IN RIYADH WOULD CHANGE ITS STATUS TO THAT

OF A TRADE OFFICE.

COMMENT

2.

THE AGREEMENT TO ESTABLISH DIPLOMATIC RELATIONS, COMING AS IT DOES APPROXIMATELY ONE YEAR AFTER THE OPENING OF THE SAUDI TRADE MISSION IN PEKING IS IN LINE WITH THE PROGRAMME FOR RELATIONS AGREED BY THE TWO SIDES IN 1988. SAUDI OBJECTIVES ALL ALONG HAVE BEEN TO GO FOR THE MAJOR OPPORTUNITIES THEY SEE FOR EXPORT BUSINESS WITH THE PRC, PARTICULARLY IN HYDROCARBON PRODUCTS AND PETROCHEMICALS. THE LAST YEARS OF THE GULF WAR ALSO LED TO THE PURCHASE OF MEDIUM-RANGE BALLISTIC MISSILES FROM CHINA, THE INSTALLATION OF WHICH IN SAUDI ARABIA IS WELL UNDERWAY. WERE SEEN AS A SHIELD AND DETERRENT AGAINST IRAN, AND COULD ACQUIRE A WIDER REGIONAL RELEVANCE. MORE RECENLTY WE HAVE SEEN A GROWING SAUDI INTEREST IN CONTACT WITH CHINA'S MOSLEM POPULATION, STIMULATED IN PART BY CONCERN TO COUNTER IRANIAN EVANGELISM, HOSTILE TO SAUDI CUSTODIANSHIP OF THE HOLY PLACES. IF THIS IS A SENSITIVE ISSUE FOR THE CHINESE GOVERNMENT, IT HAS EVIDENTLY NOT LED THEM TO TRY TO KEEP THE SAUDIS AT ARMS LENGTH.

3. WE DO NOT BELIEVE THAT THIS EVENT HAS DIRECT IMPLICATIONS

1

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170733

MDHIAN 167

FOR SAUDI/SOVIET RELATIONS, ALTHOUGH IT HAS BEEN SUGGESTED THAT THE SAUDIS WERE RELUCTANT TO RESUME RELATIONS WITH THE SOVIET UNION UNTIL THEY HAD COMPLETED THE PROCESS OF ESTABLISHING RELATIONS WITH THE PRC. A SOVIET PRESENCE HERE MAY NOW BE A

STEP NEARER.

MUNRO

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