SHANGHAI: China approved its first exchange-traded funds investing in Saudi Arabia equities on Friday, fund managers told Reuters, as Beijing expands ties with the Middle East amid rising tensions with the West. The products, managed by China’s Huatai-Pinebridge Investments and Southern Asset Management separately, will track Hong Kong-listed CSOP Saudi Arabia ETF, which debuted in November by Hong Kong-based CSOP Asset Management, according to the two fund managers. “The approval will further deepen the cooperation between Saudi and China in capital markets,” said Ding Chen, chief executive officer at CSOP. The CSOP Saudi Arabia ETF, which tracks the performance of the FTSE Saudi Arabia Index, is down roughly 5 percent so far this year, compared with a 3 percent gain in China’s stock benchmark CSI 300 . Reuters reported in August that China and Saudi Arabia’s stock exchanges were talking about allowing exchange-traded funds (ETFs) to list on each other’s bourses, as the countries look to deepen financial ties amid warming diplomatic relations. Through the ETF, investors in China will be able to trade Saudi stocks including the oil giant Saudi Aramco and Saudi National Bank. Beijing, frustrated by what it sees as Washington’s weaponization of economic policies, has sought to expand ties with countries in Europe, the Middle East and Africa. Its diplomatic push to court others include US ally Saudi Arabia. Earlier this week, China’s securities regulator told Reuters that it welcomes foreign financial institutions and investors, including those from the Middle East, to expand investment in China. The statement was made in response to a Reuters request seeking comment on news that Qatar’s sovereign wealth fund had agreed to buy a 10 percent stake in China Asset Management Co., the country’s second biggest mutual fund company.