Saudi Arabia Signs $5.6 Billion EV Deal As It Closes China

Adeyemi Adeyemi

Global Courant

Riyadh is leading the Arab region in strengthening trade ties with Beijing as it seeks to diversify its economy away from oil.

Saudi Arabia has signed a $5.6 billion deal with a Chinese company to produce electric vehicles as the kingdom aims to lead the Arab world in expanding economic ties with Beijing.

The memorandum of understanding signed Sunday with electric and self-driving car maker Human Horizons over the development, production and sale of vehicles accounted for more than half of the $10 billion in investment signed on the first day of a major business conference in the capital Riyadh.

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The 10th Arab-Chinese trade conference, held under the patronage of Crown Prince Mohammed bin Salman, aims to strengthen a “strategic” partnership around the Belt and Road Initiative, the Saudi news agency said.

More than 3,500 government officials, investors, business representatives and experts from 23 countries are reported to have participated in the event, co-organized by the Arab League and the China Council for the Promotion of International Trade.

As the world’s largest oil exporter, Saudi Arabia’s relations with China still largely revolve around energy, but as part of its Vision 2030 plan to diversify the economy, Riyadh plans to increase investment in non-oil sectors, including encourage electric cars.

Human Horizons produces luxury EVs under the HiPhi brand in China, but also wants to expand and progress in Western markets. The company announced in March that it would enter European markets this year, with a view to Western Europe or Scandinavia.

Saudi Arabia unveiled its own homegrown electric car brand called Ceer in October, which it expects to produce electric SUVs and sedans from 2025 through a factory now under construction.

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In addition to the $5.6 billion EV deal, Saudi officials on Sunday announced billions of dollars in deals in sectors including technology, renewables, agriculture, real estate, metals, tourism and healthcare.

These include a $533 million deal to set up an ironworks in Saudi Arabia and a $500 million cooperation agreement for copper mining in the kingdom, a Saudi statement said.

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Kingdom officials have said more announcements can be expected, while Energy Minister Abdulaziz bin Salman Al Saud said more energy deals will be forthcoming. He also brushed off Western criticism of growing Saudi ties with China and said the kingdom would prioritize its business interests.

Saudi Foreign Minister Faisal bin Farhan Al Saud addresses the 10th Arab-Chinese Trade Conference in Riyadh. (Fayez Nureldine/AFP)

Saudi Foreign Minister Prince Faisal bin Farhan Al Saud, who addressed the conference as keynote speaker, praised growing ties between China and the Arab world.

“Our meeting today is an opportunity to work and strengthen the historic Arab-Chinese friendship and to work towards building a common future,” which will benefit both sides, he was quoted as saying by Arab media.

Saudi officials told the conference that the total trade volume between China and the Arab world reached a record $430 billion by 2022, with Saudi Arabia accounting for about 25 percent with a huge bilateral trade volume of $106 billion rising by 30 percent. increased compared to the previous year .

The conference comes shortly after Chinese President Xi Jinping visited Riyadh in December. He held a joint meeting with Arab leaders and signed a comprehensive strategic partnership agreement with Riyadh.

China has also increased its diplomatic foothold in the region, having brokered a groundbreaking deal in March between Iran and Saudi Arabia that led the two regional rivals to restore diplomatic ties after a seven-year rift. .

Saudi Arabia Signs $5.6 Billion EV Deal As It Closes China

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