Board of Trustees
His Excellency Minister Ali Ibrahim Al-Naimi
Minister of Petroleum and Mineral Resources
Chairman, KAUST Board of Trustees
November 13, Conferment Ceremony of Honorary Doctorate, Peking University, China
Excellencies,
Distinguished guests,
Members of the faculty of Peking University,
Dear students,
Ladies and gentlemen:
Good morning.
I would like first to thank the University President, Professor Zhou Qifeng, for the privilege of addressing such a distinguished audience at your world-renowned institution. It is truly an honor for me to be here at Peking University, or Beida if I may, and I am deeply moved that your esteemed university is conferring on me an honorary doctoral degree.
Since its founding in 1898, Peking University has nurtured a large number of outstanding talents for China and also the world. They not only led the development of China, but also contributed to the advancement of human society. During the period of China’s New Cultural Movement, your former president, Professor Cai Yuanpei, advocated for Beida the principle of freedom of inquiry and an all-embracing openness to ideas “循思想自由原则，取兼容并包主义”.
I very much admire how Peking University has served as the cradle of modern Chinese thought. Moreover, Beida embodies a sense of social responsibility colored by a dose of idealism. This sense of social responsibility has driven Beida’s faculty and students to persevere in serving the larger society. The famed Chinese writer of the early 20th century, Lu Xun, once commented, "Peking University will always be about being new, being creative, and being the pioneer of innovation and reform, helping to drive China towards what is good and along the path of progress.” It sounds even more beautiful when said in Chinese: 北大是常为新的，改进的运动的先锋，要使中国向着好的，往上的道路走.
This, I feel, is a wonderful summary of the Beida spirit. And I want to express my best wishes for the faculty and students to continue to take this spirit of Peking University to greater heights. By making Beida my honorary alma mater, you make me feel at home in your university community. You make me feel at home in China. To be associated with Cai Yuanpei’s noble spirit of cultural and intellectual openness also makes me feel welcome here. Still another reason why I can call this place a home is that I am an Asian. When a Saudi Arabian studies, or conducts business, or travels to savor the culture and natural beauty of China, he is at home on his native continent.
As China represents the eastern shore of the Asian mainland, Saudi Arabia inhabits the western reaches of our continent. Recently the economic relations between our two countries have expanded dramatically compared with just a few decades ago. However, in the longer view of history there is nothing new about commerce and cultural exchange between China and the Arab world.
About 1,000 years ago, during the early times of the ‘Abbasid Caliphate in the Arab lands, Arab mariners and merchants developed regular sea trade with China and established trade centers along the south China coast. At the height of their commercial relationship, China and the ‘Abbasid domain were the world’s two largest economies. Arab artisans of this period came to excel at making paper after having learned this skill from the Chinese. Arabian ports and trading networks were vital in carrying Chinese silks, porcelains and other goods to European markets. Intellectual and cultural historians would agree also that China and the Arab/Muslim world of the first half of the last millennium both were among the world’s most advanced civilizations in terms of philosophy, the arts, science, and technology.
A few centuries after the height of the ‘Abassid relations with China, there came a remarkable series of Chinese naval expeditions to Arabia. Between 1413 and 1432, fleets commanded by the Chinese Admiral Zheng He made several calls to Arabian ports. Ma Huan, a young scholar of Arabic from China’s Zhejiang Province – the same province that was home to Lu Xun – traveled with the fleet as a translator and chronicler. After one of his voyages, he wrote one of the influential books of his time, The Overall Survey of the Ocean’s Shore (Ying-yai sheng-lan chiao-chu.) On another of his journeys, he spent several months in what is now Saudi Arabia. In fact, he sojourned in the vicinity of the new King Abdullah University of Science and Technology, known as KAUST, north of the ancient and still thriving port of Jiddah. Of that experience, Ma Huan wrote: “The customs of the people are pacific and admirable.” He also wrote: “In truth it is a most happy country.”
Ladies and gentlemen, and dear students:
Though nearly 600 years have passed since Ma Huan made his visit, let me assure you that when you visit KAUST and other places in Saudi Arabia today, you also will find a most happy country. KAUST is one of the world’s newest universities, in its very first semester of studies. Fourteen percent of the students in our inaugural class are from China – the largest national representation of students after Saudi Arabia itself. In all, 61 countries are represented in the student body. For the same reasons I feel at home with you in east Asia, you should feel at home in west Asia, in Saudi Arabia.
I am pleased to note that students travel in the other direction too. Today more than 400 students from Saudi Arabia are studying in medical and technical disciplines in Chinese universities, and about 100 more will be joining them within the next year, making China the largest recipient in Asia of Saudi students.
As of this morning, KAUST and Beida are in a formal partnership. We have just signed a Memorandum of Understanding for research collaboration and student exchange. This is most fitting in that Beida was the first university in modern China to offer Arabic studies, more than six decades ago. I am happy to know that Beida will also host a facility for King Abdulaziz Library to preserve all manuscripts in Arabic and Chinese. Beida now joins Stanford, Berkeley, Cambridge, the Imperial College London, and 40 other leading research universities in partnerships with KAUST. We also have valuable partnerships with the research and development divisions of several major corporations. We have built at KAUST a research park and innovation cluster in order to create an innovation and enterprise ecosystem. We hope that over time, KAUST will play a pivotal role in helping to grow Saudi Arabia’s most precious resource – human capital, to diversify our economy to an innovation-driven one, and to bring important benefits to the world.
Our focus is not solely on the needs of Saudi Arabia, or for that matter, on the aspirations of the Saudi people alone. The research agenda at KAUST seeks to address some of the biggest challenges facing humanity today: for example, clean water for the thirsty, food for the hungry, and renewable resources for a world economy constantly in search for more energy.
Yes, I did say renewable resources. It may surprise you to learn that Saudi Arabia, with the world’s largest proven reserves of petroleum, recently launched a major R&D effort to develop solar energy. Why would we do such a thing? Well, even though our petroleum reserves are abundant and are expected to last for many decades to come, they too are finite. Meanwhile, we also have in great supply both sunlight and the raw material for solar cells – pure silica sand.
Ladies and gentlemen, and dear students:
As my country’s Minister of Petroleum and Mineral Resources, I wish to make some remarks on the strategic relations between the People’s Republic of China and the Kingdom of Saudi Arabia. We view China as a strategic partner and seek to strengthen and enhance such partnership. Soon after assuming the throne, King Abdullah bin Abdulaziz underscored the importance of our relationship by making China the destination for his first state visit. Our mutual trade relations continued to flourish in all fields and have reached new heights in trade with the rapid economic growth in our two regions.
Today China is one of our leading trading partners in Asia and the world. Asia is our largest trade partner among continents with 45 percent share of our overall trade. At the same time Saudi Arabia is China’s, as well as all of Asia’s, principal trading partner in the Middle East.
While China’s share of our imports at 11 percent is second only to the United States among individual nations, the Asian continent accounts for more than 30 percent of our imports. Our total oil and non-oil exports to China are the second largest in Asia.
When it comes to energy trade and investment relations, Asia accounts for more than half of our crude oil, refined products and natural gas liquids exports, while China accounts for one fifth of our Asian export market. The investment relation is as important. Today our largest refining assets outside of Saudi Arabia are in Asia, with a total equity capacity of 1.32 million barrels per day in China, Japan and South Korea.
We are pleased to see that Saudi Aramco’s two integrated refining, petrochemical and marketing joint ventures in China’s Fujian Province with ExxonMobil and Sinopec are progressing to reach crude processing of 240,000 barrels per day of sour Arabian crude by the end of this year. Chinese investment in our oil and gas industry is also expanding – in gas exploration, drilling and other services to the oil and petrochemical industries.
Looking ahead, and according to some international organizations, China’s oil consumption is projected to increase by 1.7 million barrels per day by 2015 and 7 million barrels per day by 2030, accounting for around 32 percent of the projected increase in global oil demand. This demand will continue to be driven by the process of industrialization, urbanization and mobility. China’s and Asia’s demand are projected to be met mainly from supplies from Saudi Arabia and the other Gulf states.
To meet this demand growth and expansion in trade in oil and gas products, investment is needed all along the oil and gas value chain and in all regions – especially in Asia and the Middle East. Saudi Arabia alone has been executing investment plans totaling more than $100 billion involving maintaining and increasing oil and gas production capacities and increasing and upgrading refining and processing facilities, including projects in and out of Saudi Arabia.
Having achieved our crude oil production capacity increase to 12.5 million barrels per day in June 2009, we are expanding our gas production and processing capacities by 4.5 billion cubic feet per day by 2014, a 40 percent increase over the current capacity, to fuel the local needs of electricity generation, desalination plants, petrochemicals and other industries. We are also executing plans to build two new refineries in Saudi Arabia, in partnerships with the international oil industry, with a total capacity of 800 thousand barrels per day, and we are upgrading existing refineries with association to petrochemical complexes. Our overall downstream investment drive will double our domestic and international refining capacities by 2015.
These investments, as well as our external investments in joint venture refineries in the United States, China, Korea and Japan, highlight our overall endeavor towards global market stability and supply continuity and reliability. Our special commitment to the Asian market is a cornerstone of this endeavor. On this last note, let me be as explicit as possible: China can rely on Saudi Arabia to provide it with the oil it will need to continue its projected growth for the coming decades.
Ladies and gentlemen, and dear students:
Allow me to address some of the more general global concern about energy security. If energy security is properly defined as the diversity, availability and affordability of energy at all times, then it is a producers’ as much as a consumers’ concern. Unfortunately, energy security has been narrowly defined by some and associated with efforts to address climate change, energy independence and oil import dependence. I think such association could lead to expedient, inefficient and trade restrictive policies which will ultimately undermine security and the global efforts to tackle climate change.
When it comes to the adequacy of energy resources, it should be pointed out that, from the perspective of oil and gas resource endowment, the picture is different from what the resource pessimists paint. In 1990, global proven oil reserves stood at one trillion barrels while today, after the world had extracted and consumed some 485 billion barrels, proven oil reserves have increased to 1.3 trillion barrels. The resource picture for gas is similar. Gas reserves have increased by 50 percent, despite an accumulated production of 44 trillion cubic meters since 1990. The fact of the matter is that technology and human ingenuity have contributed to the growth in global hydrocarbon resources to last the world longer.
Viewed from an energy demand perspective, the world economies today are more energy and oil efficient than at any prior time in history. Today, the world consumes 20 percent less energy per $1,000 GDP as it did back in 1990. China’s energy consumption for each $1,000 in constant prices is down from 2.6 barrels of oil equivalent in 1990 to 1.3 today. This is all the more remarkable considering China’s extraordinary economic growth and the associated growth in energy and oil demand. In the pursuit of renewable energy sources, China in particular is gaining well-deserved attention for its major investments in wind and solar power for electricity generation. The remarkable economic expansion in Asia over the past three decades was met by expanding supplies from the energy-endowed region of the Gulf. This continued throughout different oil price episodes, economic and financial crises and political conflicts.
Let me also say a few things about the concern of the oil producers. Since oil is a finite resource, it should be utilized to improve the well-being of the present and future generations. This requires that the resources as well as its proceeds are used efficiently to support national development objectives. The complexity of the oil and gas industry requires technological and managerial mastery.
In Saudi Arabia, our economic strategy focuses on utilizing oil and gas and their proceeds to develop our human resources, build the required infrastructure, fuel and develop the non-oil sectors of the economy, and channel more resources to science and technology. Besides continuing the emphasis of our expenditure on human resource development, the past five years witnessed remarkable increases in infrastructure such as the number of schools, universities, hospitals and vocational training centers. These were associated with noticeable improvements in the quality of the education and health services and the enactment of different reform programs in the related sectors.
We continue to channel resources to the productive sectors to diversify our economy, and to enact or reform laws and regulations to foster a sound business environment. The construction of a major north-south railroad with involvement of many firms, some from China, to transport the mining deposits from the north of our country to the newly constructed industrial and mining city of Ras Al-Zoor in the Gulf Coast for processing such minerals, aims at utilizing fully Saudi Arabia’s comparative advantages.
A few words about the global energy market also are in order. The past few years have been critical for the energy markets and their stakeholders. As oil prices and the prices of other commodities soared, they soon tumbled in the wake of the global financial and economic crisis and started recovering to more sustainable levels as the prospects of economic recovery became apparent.
While we have been concerned over oil price volatility and the contribution of other non-fundamental factors to such volatility, we have maintained that price extremes in the low and high ends are not sustainable; they are detrimental to oil producers and consumers alike. We on our part have tried to lessen the impact of the fundamental factors on market stability through our investments to increase production capacity and by working with all concerned parties to bring about predictability.
We have worked tirelessly with concerned parties in the Joint Oil Data Initiative coordinated by the International Energy Forum to improve transparency through the submission of timely and accurate data on oil consumption, production, trade and stocks. We have long argued that the lax control in the commodity exchanges including oil has lessened the role of fundamentals in price formation and contributed to price volatility. We are encouraged to see that in the wake of the financial crisis, our repeated calls to increase transparency and oversight in such markets has finally been heeded and that laws and regulations in the main exchanges in the United States and the United Kingdom are being enacted to that effect.
Ladies and gentlemen, dear students:
It is fashionable among commentators today in the East and West to speak of the 21st century as “The Asian Century.” Compared with the most recent 100-year intervals, and according to some of the statistics I have just discussed, in economic terms at least, this is a time of Asian prominence.
But in the longer scope, it is more apt to say this is an Asian century, not the Asian century. As we noted earlier in these remarks, there have been other eras of Asian eminence – as when China and the ‘Abbasid lands were the world’s leading economic powers. Even then, the power of those two Asian civilizations depended in significant part on open trade relations with the rest of the known world.
Without question, our promising new Asian century is possible only because Asia is open to the wider world. China’s and Saudi Arabia’s accession to the World Trade Organization is evidence of this. Asia cannot continue to thrive without continuing a constructive relationship with other regions of the world and pursuing mutually beneficial ties with emerging economies in Africa.
Saudi Arabia deeply appreciates the diplomatic efforts of China in sending Vice President Xi Jinping in June 2008 to meet with King Abdullah and to take part in the crucial Jeddah Energy Meeting, aimed at stabilizing oil prices. Continuing such dialogue between Saudi Arabia and China, and among us and other nations, will contribute to global prosperity and security. As we treasure the rich history of Arab-Chinese relations stretching back for more than 1,000 years, let us continue our cooperation to provide an abundance of energy for this new Asian century – not only energy for transportation and industry, but intellectual energy as well.
Professor Zhou, distinguished guests, dear students, ladies and gentlemen:
I am humbled that you have conferred upon me an honorary doctoral degree through which I have become a member of the distinguished Beida family and a closer associate of a country that I have long admired. I am very impressed by China’s dynamic and creative people, its rich traditions and culture, and its extraordinary socio-economic development. I sincerely hope that the longstanding friendly relations between our two countries, the People’s Republic of China and the Kingdom of Saudi Arabia, will continue to flourish, not only in the areas of oil and energy trade and investment, but in the political, commercial and cultural spheres. My sense is that we have tapped only a small fraction of the potential of our relationship, for the good of China, Saudi Arabia and the world.
Before I end, let me again express my deep appreciation for this great honor and for your gracious hospitality. I will cherish this recognition and never forget this special occasion.
On behalf of the youngest university in Saudi Arabia, and probably in the world, I would like to extend a hand of friendship to your long established institution with a proud heritage. We see today as another step in deepening our friendship, and we look forward to many years of friendship with you and with the people of the People’s Republic of China.
As the saying goes, “A friend from afar who understands you brings a distant land near” 海内存知己，天涯若比邻。And for my non-Chinese speaking friends, may the friendship between Peking University and King Abdullah University of Science and Technology – and the close ties between China and Saudi Arabia – endure forever. Thank you!