- Saudi Aramco CEO Amin Nasser praised China for making solar panels and electric vehicles affordable.
- The West has recently stepped up its criticism of China’s dumping of cheap green products on global markets.
- Saudi Arabia favors closer ties with China and courts Chinese investment and business partnerships.
China’s green industries have an unlikely ally in Saudi Aramco – the world’s largest oil company – which has praised the world’s second-largest economy for making solar panels and electric vehicles affordable.
“China has really helped by reducing the cost of solar energy,” Amin Nasser, CEO of state-owned Saudi Aramco, said Monday at the World Energy Congress in Rotterdam, according to the Financial Times.
“We can see the same thing now in electric vehicles. Their cost is between a third and half the cost of other electric vehicles,” Nasser added, calling for globalization and collaboration, according to the FT.
Because China has made these green products so affordable, they will help the West meet its goal of reducing carbon emissions to net zero by 2050, Nasser said.
The West attacks China’s overcapacity
Nasser’s comments come amid Western criticism that China is marketing cheap solar panels and electric vehicles to global markets.
Earlier this month, US Treasury Secretary Janet Yellen criticized overcapacity and overproduction in China during a visit to this East Asian country.
“China is now simply too big for the rest of the world to absorb this enormous capacity,” Yellen said. She warned China against repeat his actions more than a decade ago when he sold goods like steel cheaply on global markets, decimating industries and communities.
Last week, German Chancellor Olaf Scholz also echoed Yellen’s concerns during a visit to China when he called for fair competition.
Beijing has hit back at accusations of dumping from the West, presenting the criticism as a tactic aimed at limiting China’s economic development.
China, the world’s second-largest economy, is undergoing a painful transition from its old growth engines of real estate and low-end manufacturing to the hot new sectors of electric vehicles, solar cells and lithium batteries.
Saudi Arabia seeks closer ties with China
Nasser’s praise of China also comes at a strategic time for Riyadh’s relations with Beijing.
Unlike the West, Saudi Arabia is moving closer to China.
In January, Faisal Alibrahim, Saudi Arabia’s minister of economy and planning, told the Nikkei that his country believed it was “very wise” to strengthen its relations with China, among other partners.
“There are many opportunities for China to invest in Saudi Arabia,” Alibrahim told the media outlet. “At the same time, we are prioritizing investment all over the world, including in China in terms of opportunities there.”
Saudi Arabia is trying to attract Chinese investors to pour money into its Neom megacity project on the Red Sea, which aims to shift the kingdom’s economic diversification away from oil and toward sectors such as technology and tourism.
As a key contributor to the Saudi economy, Aramco has good reason to forge closer ties with China amid the West’s commitment to reducing fossil fuel consumption.
On Monday, Aramco announced it was in talks to acquire a 10% stake in China’s Hengli Petrochemicals – the latest in a series of deals with Chinese refiners in less than 12 months. These agreements are expected to expand Aramco’s presence in China.
In March last year, China negotiated a détente between Saudi Arabia and Iran, raising concerns about the decline of American influence in the Middle East.
Despite the development of relations between Saudi Arabia and China, the Chinese are not quite present on the ground in Saudi Arabia, said Jon Alterman, director of the Middle East program at the Center for Strategic and International Studies, in testimony before the US-China Council. Economic and Security Review Commission, Friday.
“It is clear to the Saudis that the country needs a strong relationship with China,” Alterman said. “Even if China does not replace the United States, Saudi Arabia views China as an important check on the United States and an important complement to what the United States is willing to provide to China.”
businessinsider
