January 19, 2016 - 2:17 PM EST
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Xi Jinping arrives in Saudi Arabia for trade, oil talks

RIYADH, Saudi Arabia, Jan. 19 (UPI) --

Chines President Xi Jinping arrived in Saudi Arabia Tuesday to begin discussions centered on trade relations and crude oil sales.

The visit comes at time when Asia's largest economy is battling the slowest growth in 25 years, and Saudi Arabia is anxious to boost its oil exports, The Wall Street Journal reported.

Saudi Arabia and its regional oil rival Iran could be locked in a competition for Chinese demand. Saudi Arabia's economy has been badly hit by the steep decline in oil prices.

Iran, meanwhile, is gearing up to expand its oil output by 500,000 barrels a day since sanctions over its nuclear program have been removed.

But Chinese oil demand has been sliding downward with economic growth registering an annual rate of 6.9 percent in 2015, its slowest rate in more than two decades, CNN Money reported.

China is also seeking stability in the region, said Gordon Kwan, a researcher at Nomura.

China wants some reassurance that tensions in the Middle East will not continue to escalate, especially between Saudi Arabia and Iran, Kwan told The Journal.

The lackluster performance of the Chinese economy in a period when the United States has shown signs of a recovery has been followed by new developments.

Bloomberg reported U.S. Treasury Secretary Jacob J. Lew has been speaking with Liu He, one of Xi's top advisers, regarding China's currency policy, instead of Vice Premier Wang Yang, who is higher in status.

The change in interlocutor could mean Xi's influence is increasing while the State Council's power is waning.

Premier Li Keqiang leads the Council.

The move does underline this idea, which has taken grip over the last couple of years, that Li Keqiang is somewhat sidelined and weak as a premier, said Kerry Brown, a Chinese studies professor at King's College London.

Source: United Press International (January 19, 2016 - 2:17 PM EST)

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