Saudi Arabia:How Low Oil Price Prompts Its Economic Transformation And Moves Itself Toward China's Belt And Road Initiative

The global financial crisis in 2008 brought the global economy into a downturn and international oil price also fell.The supply and demand relationship of oil all over the world has undergone a significant change.Since then,the recovery of the global economy has faltered.Moreover,the United States started the "shale revolution" and "energy independence" movement.As a result,the slightly rising international oil price begun to fall.It is still hovering around 70$ per barrel,a wide gap with the historic peak of 147$ per barrel.Saudi Arabia is the second largest oil exporter in the world.Its economy has been long relying on oil and gas exports,resulting in a single structure for its economy which is extremely sensitive to the variations of the international oil and gas market and prices.Although Saudi Arabia has implemented economic diversification policies for decades to improve the vulnerability of the single economy.However,due to domestic high welfare social policies and increasing population pressures,economic structure diversification policies had little effect.The continuous changes in international oil prices have caused great harm to the Saudi Arabian economy.In addition,environmental issues such as global warming have made oil alternative energy and new energy become the focus of future energy industry development increasingly.The gloomy outlook of oil and gas markets has caused Saudi Arabia tremendous pressure.Deepening the transformation of domestic economic has become an inevitable choice for Saudi Arabia.In this context,Saudi Arabia has issued an ambitious economic transformation plan “Saudi Arabia 2030 Vision” and a 2020 refinement goal “National Transformation Plan”.Based on these two official documents,this paper selects several key areas of economic transformation in Saudi Arabia,including tourism,construction,mining,petrochemicals,finance,wholesale and retail.Besides,this article will briefly introduce the development status of these industries and make analysis of the development direction according to the Vision.Due to the estrangement of relations between the United States and Saudi Arabia in recent years,Saudi Arabia has strengthened its strategic autonomy to deal with internal and external difficulties.Since the establishment of diplomatic ties between China and Saudi Arabia,bilateral relations have developed steadily.The implementation of China's “One Belt and One Road” initiative faces many opportunities and challenges in the Middle East.In the context of Saudi Arabia's “seeing east” and China's “looking west”,the strategic cooperation between the two countries is imperative.First,cooperation in the economic fields should be carried out.The economic cooperation between China and Saudi Arabia plays an important role in the economic transformation of Saudi Arabia.The oil and gas industry is still the focus of cooperation,and then cooperation should be expanded to all-round layers such as in agriculture,industry,and service industries especially in financial industry.The broad prospects for economic cooperation between China and Saudi Arabia can not only help Saudi Arabia's economic transformation but also achieve mutual benefits as well.