Development has been key to tackling security problem in the Middle East, the president told a Beijing conference with 21 representatives from Arab nations on Tuesday.
He said: “We should treat each other frankly, not fear differences, not avoid problems and have ample discussions on each aspect of foreign policy and development strategy.”
China will offer aid worth of $15m to Palestine to support economic development, as well as a further $91m to Jordan, Lebanon, Syria and Yemen, he said.
Additionally, a group of banks from China and Arab nations will also be set up, with a dedicated fun of $3bn.
The relationship between the bank consortium, financial aid and overall loan package was not clear.
Xi added that the loans will fund an “economic reconstruction” and “industrial revival” plan, which include cooperation on oil and gas, nuclear and clean energy.