From
George Castro
International Analyst
The decision of Prince Mohamed bin Salmán (MBS), heir and leader of the Saudi Kingdom, the world’s second largest oil power after Russia, and the world’s leading exporter, is diversify and transform the Saudi economy and society into a long-term project, ending its absolute dependence on hydrocarbon production, which above all involves modifying and expanding its workforce, incorporating the female population as a key strategic measure, which constitutes a direct challenge to the rigid “Wahhabi” sect of the Islamic religion, on which King Ibn Saud – initiator of the dynasty – founded the Kingdom in 1932; Since then and for 90 years it has had the strategic, political and military support of the United States, which has guaranteed its internal and external security.
For that prince MBS has the strategic alliance of Chinasealed in President Xi Jinping’s recent trip to Riyadh in December last year.
There they agreed on a number of key points investment and high-tech collaborationespecially in the decisive fields of interconnectivity and industrial development, with particular attention to the production of electric vehicles (SUV) and hybrids.
Saudi Arabia has established a $600 billion Transformational Development Fund, which can be doubled or tripled as needed.
The Kingdom of Saudi Arabia and Russia are the main beneficiaries of the phenomenal increase in the price of energy in the last two yearscaused by the Ukrainian war and the sanctions imposed on Moscow by the European Union and the United States.
Saudi Arabia bought his own company that produces electric cars (SUV): Lucid Motors of the United States with an initial investment of 2,000 million dollars; and with it it intends to produce around 100,000 vehicles in 2030, in a market which by then will have a capacity of 500,000 units.
For his part, China’s electric vehicle industry has the following characteristics: Chinese consumers will buy between 8 and 10 million units this year, compared to 6.5 million purchased in 2022 and 3.5 million accessed in 2021 (3 million units are produced in Europe this year SUV units and 2 million in the US).
In short, Chinese production is growing by 35% a year, which means this 7 out of 10 electric vehicles in the world are produced in the People’s Republic.
China’s leading SUV company is “China BYD”, which stands for “Build Your Own Dreams”.
BYD sold 641,000 units in the first six months of 2022 (300% year-over-year growth) and surpassed China’s market leader for the first time to date, Elon Musk-owned Tesla, which produced 564,000 units in the same period.
BYD has only one foreign investor, owner of 8% of its shares: it is Warren Buffethead of Berkshire Hathaway, is based in Omaha, Nebraska, and is the largest investor in the world.
This investment and the high-tech connection between Omaha, Nebraska and Shenzhen, China is what is called globalization, which is the phase of capitalist accumulation of the 21st century.
BYD is also the first manufacturer of electric batteries SUV of the global system and, therefore, the largest consumer of lithium in the world.
BYD’s growing leadership in the Chinese market it is based on its superior productivity, and therefore, its lower production costs; and at this point it competes above all with Tesla, the highly efficient American company, whose Shanghai plant is almost completely automated.
BYD and Tesla are the ones that establish the competitiveness/productivity standards of the SUV industry in the world, and to which the rest of the companies in the system, including those of Saudi Arabia, must comply, on pain of irrelevance and disappearance.
This is a point of particular importance to underline, and it is that the industrialization – or “reindustrialization” – of emerging countries must be performed in today’s world according to the most advanced productivity guidelineswhich are those of the US/China axis.
The next step for the Chinese SUV industry to take this year is the hegemonic dominance of world exports of the sectorwhich above all implies supremacy in the European and North American markets.
The calculation that can be made is the following: in 2022 China – including and primarily Tesla – has exported half a million SUVs to Europe and aims to double that number this year, which is equivalent to declaring that it can conquer the European market in 3 years; and leading that formidable export push into a new industry is BYD (and its partner Warren Buffett of Omaha, Nebraska).
If this is what is considered a “Chinese threat”, it is certainly an apt description.
“Intelligence is the ability to surprise,” says Charles Peguy. Anyone who is not surprised and amazed in Chesterton’s terms by what takes place in this phenomenal world of creativity and historical novelty has either stopped thinking, or is an “idiot”, which is the Greek term for identify those who are out of age in which they live.
Source: Clarin
