Saudi Arabia’s oil giant boss speaks up for China, saying its massive production of solar panels and EVs helps affordability

“We can see the same now in electric vehicles. Their cost is one-third to one-half the cost of other electric vehicles,” Nasser added, as he called for globalization and collaboration, per the FT.

Because China has made these green products so affordable, they will help the West achieve its target of cutting carbon emissions to a net zero level by 2050, said Nasser.

The West has hit out against China’s overcapacity

Nasser’s comments came amid the West’s criticism that China has been dumping cheap solar panels and EVs on the global markets.

Earlier this month, US Treasury Secretary Janet Yellen slammed overcapacity and overproduction in China during a visit to the East Asia nation.

“China is now simply too large for the rest of the world to absorb this enormous capacity,” said Yellen. She warned China against repeating its actions over a decade ago when it dumped products like steel on the global markets, decimating industries and communities.

Last week, German Chancellor Olaf Scholz, too, echoed Yellen’s concerns during a visit to China when he called for fair competition.

Beijing has hit back against the West’s accusations of dumping, framing the criticism as a tactic to limit China’s economic development.

China, the world’s second-largest economy, is undergoing a painful transition from its previous growth drivers of real-estate and lower-end manufacturing to the hot new sectors of EVs, solar cells, and lithium batteries.

Saudi Arabia looks to foster closer ties with China

Nasser’s praises of China also came at a strategic time for Riyadh’s relationship with Beijing.

Unlike the West, Saudi Arabia is cozying up to China.

In January, Faisal Alibrahim, the Saudi Arabian minister of economy and planning, told the Nikkei that his country thinks it’s “very wise” to strengthen its relationship with China, among other partners.

“There are lots of opportunities for China to invest in Saudi Arabia,” Alibrahim told the media outlet. “At the same time, we are prioritizing, investing all around the world, including China in terms of the opportunities there.”

Saudi Arabia is trying to attract Chinese investors to pump money into its Neom megacity project on the Red Sea, which aims to drive the kingdom’s economic diversification away from oil to sectors including tech and tourism.

As a key contributor to Saudi Arabia’s economy, Aramco has good reasons to build closer ties with China amid the West’s commitment to reduce fossil fuel consumption.

On Monday, Aramco announced it’s in talks to acquire a 10% stake in China’s Hengli Petrochemicals — the latest in a string of deals with Chinese refiners in less than 12 months. The deals are poised to expand Aramco’s footprint in China.

In March last year, China brokered a détente between Saudi Arabia and Iran, prompting concerns over waning US influence in the Middle East.

Despite Saudi Arabia and China’s developing relationship, the Chinese aren’t quite present on the ground in Saudi Arabia, Jon Alterman, the director of the Middle East program at the Center for Strategic and International Studies, said in a testimony before the US-China Economic and Security Review Commission on Friday.

“It is clear to Saudis that the country needs a robust relationship with China,” said Alterman. “Even if China doesn’t replace the United States, Saudi Arabia sees China as an important check on the United States, and an important supplement to what the United States is willing to provide to China.”