Saudi Arabia Inks MoU with China USD 5.6 Billion to Produce EVs – EQ Mag
SINGAPORE : Saudi Arabia and China have inked $10bn worth of investment agreements, including a $5.6bn deal involving Chinese electric vehicle (EV) manufacturer Human Horizons.
The deals were signed during the first day of the 10th Arab-China Business Conference in Riyadh, Saudi Arabia, which runs on 11-12 June.
The other investment agreements signed span sectors such as technology, renewables, agriculture, real estate, minerals, supply chains, tourism, and healthcare, the official Saudi Press Agency (SPA) said.
The memorandum of understanding (MoU) deal signed between Saudi Arabia’s Ministry of Investment and Chinese autonomous driving technologies and manufacturer Human Horizons aims to establish a joint venture for automotive research, development, manufacturing and sales of electric cars.
Human Horizons specialises in building luxury electric cars and sells its cars under the HiPhi brand. Details of the planned production plant from the deal were not immediately available.
The automotive industry is a key end-market for petrochemicals, which account for more than one-third of the raw material costs of an average vehicle, according to ICIS calculations.
Among others, vehicles use antifreeze and other fluids, catalysts, plastics, rubber tyres and hoses, upholstery fibres, coatings, and adhesives.
Saudi foreign minister Faisal bin Farhan in a speech at the conference said that China is the largest trading partner of Arab countries, with the volume of trade exchange reaching $430bn in 2022, up 31% from the previous year.
Saudi Arabia makes up 25% of the total volume of trade exchange between China and Arab countries, which reached $106.1bn in 2022, a 30% increase over 2021, the minister stated.
The foreign minister said Chinese President Xi Jinping’s visit to Riyadh in December 2022, ”further strengthened political, economic, investment and trade ties between the two friendly countries”.
The visit coincided with the launch of the first China-Arab States Summit and China-Gulf Cooperation Council (GCC) Summit, both of which resulted in the signing of several agreements and memorandums of understanding worth more than $50bn, according to the SPA.
The GCC comprises Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE.
In March 2023, Saudi Aramco – the world’s biggest crude exporter – had announced deals with Chinese producer Rongsheng Petrochemical and Zhejiang Petrochemical following Xi’s visit to Saudi Arabia.
Aramco agreed to acquire a 10% interest in Rongsheng Petrochemical Co for $3.6bn, to expand the company’s downstream presence in China.
Under the deal, Aramco would supply 480,000 bbl/day of Arabian crude oil to Rongsheng affiliate Zhejiang Petroleum and Chemical Co Ltd (ZPC) under a long-term sales agreement.
Source: Reuters
