Saudi Arabia targets Chinese tourists to bolster Vision 2030 and diversify economy

The bond between Saudi Arabia and China continues to strengthen as Saudi Arabia advances its Vision 2030 plan and Beijing pursues its Belt and Road Initiative (BRI). The collaboration between these two countries has grown significantly in recent years, with Saudi Arabia shifting its geoeconomic focus towards the East and China expanding its presence in the kingdom’s economy.

The potential for further connection between the two nations is evident in the synergies between Vision 2030, Saudi Arabia’s economic diversification plan launched in 2016, and the BRI. A key component of Vision 2030 is the development of the tourism industry, with China ranking as the top source of international tourists in 2019. Chinese tourists made 155 million outbound trips that year, spending over US$250bn on their travels. However, due to the COVID pandemic, these numbers fell to 20 million and 26 million in 2020 and 2021, respectively.

The Saudi government aims to generate US$46bn in annual tourism revenue by 2030, with the potential for significant growth if more Chinese tourists visit the kingdom. In 2019, just before the pandemic caused a downturn in tourism revenue, Saudi Arabia earned a record US$19.85bn from the sector.

As China recovers from the economic impact of its strict zero-COVID policies, Saudi Arabia is keen to tap into its tourism market, anticipating an increase in Chinese tourists travelling overseas. In March, Saudi Tourism Authority CEO Fahd Hamidaddin met with China’s Vice Minister of Culture and Tourism Rao Quan to discuss joint tourism initiatives aimed at attracting nearly four million Chinese tourists a year to the kingdom by 2030.

Beijing views the success of Vision 2030 as crucial to its interests in the Middle East. A failure to diversify Saudi Arabia’s economy beyond oil could lead to a devastating economic crash, potentially creating further instability in the region and threatening the BRI and China’s global trade ambitions.

Hussein Ibish, a senior resident scholar at the Arab Gulf States Institute in Washington, said, “Chinese tourism is a potentially huge market for them. If they can tap into that vast potential, it will be another large step forward in moving beyond total reliance on hydrocarbons for foreign exchange and commerce.”

Saudi Arabia has several attractions that could draw in many tourists, including ancient sites like the oasis city of al-Ula, the natural beauty of its Red Sea coast and mountains, and a growing entertainment sector. The planned megacity of Neom, set to house up to two million people by 2030, could also attract many tourists to the kingdom.

Ahmed Aboudouh, nonresident fellow with the Middle East Programs at the Atlantic Council, explained that Saudi Arabia’s plans for attracting Chinese tourists include “relaxing visa policies, improving air links, upgrading travel services and other targeted approaches, including utilising traditional Chinese media and popular social media platforms to promote Saudi destinations and rolling out technological payment solutions”.

Increased competition for Chinese tourists within the Gulf region could put Beijing in a challenging position regarding its strategy of maintaining good relations with all Gulf countries. However, experts believe that this competition need not be a zero-sum game, as rail and visa schemes could increase connectivity between Saudi Arabia and the other Gulf Cooperation Council member states, allowing them to share the benefits of increased tourism.

Greater tourism flows from China to Saudi Arabia will have social and cultural impacts in the kingdom, contributing to the strengthening of Sino-Saudi relations beyond economic ties. Expanded tourism links can promote people-to-people exchange and understanding, forming a solid foundation for a stronger partnership between the two countries.