Saudi Arabia signs a $5.6 billion deal for electric cars as it looks forward to closer ties with China | Business and economic news

Riyadh leads the Arab region in boosting trade ties with Beijing as it looks to diversify its economy away from oil.

Saudi Arabia has signed a $5.6 billion deal with a Chinese electric car maker as the kingdom looks to lead the Arab world in expanding economic ties with Beijing.

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

The Saudi Press Agency said that the 10th Arab-Chinese Business Conference, held under the auspices of Crown Prince Mohammed bin Salman, aims to strengthen the “strategic” partnership based on the Belt and Road Initiative.

More than 3,500 government officials, investors, business representatives and experts from 23 countries reportedly participated in the event, which was jointly organized by the League of Arab States 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 boost investments in non-oil sectors, including electric cars.

Human Horizons makes luxury electric cars under the HiPhi brand in China but is looking to expand and make inroads into western markets as well. The company announced in March that it will enter European markets this year, focusing on Western Europe or Scandinavia.

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

In addition to the $5.6 billion electric car deal, Saudi officials on Sunday announced multibillion-dollar deals in sectors including technology, renewable energy, agriculture, real estate, minerals, tourism and healthcare.

These include a $533 million deal to establish an iron plant in Saudi Arabia, and a $500 million cooperation agreement on copper mining in the kingdom, a Saudi statement said.

Officials in the kingdom said more announcements can be expected, with Energy Minister Abdulaziz bin Salman Al Saud saying more energy deals will happen soon. He also brushed off Western criticism of Saudi Arabia’s growing ties with China, saying the kingdom would prioritize its commercial interests.

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

Arab media quoted him as saying, “Our meeting today is an opportunity to work and strengthen the historical Arab-Chinese friendship and work to build a common future” for the benefit of both sides.

Saudi officials told the conference that the total volume of trade between China and the Arab world reached $430 billion in 2022, with Saudi Arabia accounting for about 25 percent with a massive bilateral trade volume of $106 billion jumping 30 percent from 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 strengthened its diplomatic foothold in the region, after it brokered a landmark agreement between Iran and Saudi Arabia in March that led the two regional rivals to restore diplomatic ties after a seven-year spat.