Saudi Arabia has secured a significant $5.6 billion agreement with a Chinese company to manufacture electric vehicles (EVs), as part of the kingdom’s efforts to forge stronger economic ties with Beijing and lead Arab nations in this direction.

The memorandum of understanding, signed during the 10th Arab-China Business Conference held in Riyadh, focuses on the development, production, and sale of EVs by Human Horizons, a leading electric and self-driving car manufacturer. This deal accounted for over half of the $10 billion in investments inked on the conference’s opening day. The event, co-organized with the Arab League and the China Council for the Promotion of International Trade, attracted more than 3,500 officials, investors, and experts from 23 countries.

While Saudi Arabia’s relationship with China has traditionally centered around energy as the world’s top oil exporter, the kingdom aims to diversify its economy under its Vision 2030 plan. Expanding investments in non-oil sectors, including electric cars, is a significant part of this strategy. Human Horizons, known for its luxury EVs produced under the HiPhi brand in China, is eager to enter Western markets and expand its global presence.

Saudi Arabia, meanwhile, has also unveiled its own domestic EV brand, Ceer, and expects to commence production of electric SUVs and sedans by 2025. In addition to the EV deal, Saudi officials announced several multi-billion-dollar agreements in areas such as technology, renewable energy, agriculture, real estate, metals, tourism, and healthcare.

The conference highlighted the growing trade relationship between China and the Arab world, with Saudi Arabia alone accounting for about 25% of the record $430 billion in trade volume in 2022. Furthermore, the conference followed Chinese President Xi Jinping’s visit to Riyadh in December, during which a comprehensive strategic partnership agreement was signed between China and Saudi Arabia.

While critics have expressed concerns about Saudi-China ties, Saudi officials emphasised their commitment to prioritising business interests and welcomed the strengthening Arab-Chinese friendship. The conference served as a platform to foster collaboration and build a mutually beneficial future for both sides.