Perhaps the greatest threat to the Saudi economy over the coming year comes from events almost half way round the world in China. China has, over the past 10 years, become the dominant market for Saudi crude – Chinese imports of Saudi crude of 1.2mn b/d for the first four months this year are almost three times their 2006 volumes (MEES, 19 April). The Chinese and Saudi economies have thus become intertwined to an ever-increasing extent.

The IMF, in a supplement to its September 2012 Saudi Arabia country report, set out the extent of the risk to Saudi Arabia of “economic spillovers” from the rest of the world. This analysis shows that Saudi Arabia is far more sensitive to economic developments from China than to Europe or the US. (CONTINUED - 503 WORDS)