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Business Recorder
14-05-2025
- Business
- Business Recorder
Commerce over chaos: Trump's Saudi play may be smarter than it looks
US President Donald Trump's current visit to Saudi Arabia isn't just a diplomatic showcase – it's a signal that the geopolitical axis is shifting, and the United States has a closing window to redefine its relevance in the Gulf. With over $600 billion in investment agreements, including a record-breaking $142 billion arms deal and transformative tech partnerships, the visit has marked a recalibration of American policy in a region increasingly central to global power dynamics. Amid rising tensions in the Middle East, a tech arms race with China, and the fragility of global supply chains, the U.S. must pursue deeper and smarter engagement with Gulf states – not out of nostalgia for oil diplomacy, but to architect a shared future built on strategic interdependence, innovation, and resilience. 'We will work together. We will be together. We will succeed together. We will win together, and we will always be friends,' declared Trump at the Saudi-US investment summit on Tuesday. After a debilitating tariff war that strained alliances and yielded limited gains, Trump appears to recognize that building strategic economic bridges – not walls – will better serve U.S. interests in a multipolar world. Meanwhile, Saudi investments – from tech to infrastructure – are ultimately bets on a stable U.S. economy and a strong dollar, linking the kingdom's diversification goals to America's financial health. Tech, not just tanks Notably a number of tech CEO'S and business leaders accompanied Trump – Tesla's Elon Musk, BlackRock CEO Larry Fink, Nvidia CEO Jensen Huang, among others. Expectedly, one of the most consequential moves from Trump's visit was the announcement of AI partnerships between U.S. firms like Nvidia and Saudi-backed entities such as Humain. These deals, previously restricted by U.S. export controls, allow for advanced chip deployment and AI model training in the Gulf – a move designed not just to empower allies, but to outflank China's digital expansion. In doing so, the U.S. offers a viable alternative to Huawei-backed infrastructure, while ensuring the data-rich future of the Gulf. With bold investments and strategic alliances, Gulf states are not just adopting AI – they're positioning themselves to lead the next phase of the global AI race. Mutual gains: What the Gulf stands to win Far from being passive recipients, Gulf states are emerging as decisive actors in a multipolar order – and the benefits of renewed U.S. engagement are vast: Economic diversification: Investments in data centers, cloud services, and semiconductors directly support Vision 2030 and similar blueprints across the Gulf, helping transition from resource-dependent economies to innovation-driven ones. Knowledge transfer: Joint ventures with U.S. firms bring not just capital but talent pipelines, IP development, and next-generation R&D ecosystems. Digital sovereignty: Hosting U.S.-built cloud infrastructure enhances Gulf control over their own data while embedding them into global digital value chains. Defense industrialization: Arms deals with co-production clauses – if negotiated right – can jumpstart local defense industries and reduce external dependence. Geopolitical leverage: By aligning more closely with Washington, Gulf states maintain strategic optionality while increasing their bargaining power with China and Russia. Israel, Gaza and the optics of neutrality Notably, Trump's itinerary omitted Israel – a choice that, whether tactical or symbolic, reflects a recalibrated reality. The Gaza conflict has reshaped regional diplomacy. While Israel faces increasing isolation, Gulf states are positioning themselves as brokers and stabilizers. The recent release of the last living American hostage by Hamas, reportedly facilitated by Qatari mediation, underscored that power no longer lies solely in Tel Aviv. Trump's pause on U.S. strikes against the Houthis – without informing Israeli allies – as well as lifting sanctions on Syria, further signals a shift toward nuanced regional balancing, where Gulf capitals are as central to American strategy as Jerusalem once was. The $400 million carrot Perhaps the most eye-catching gesture came from Qatar: the gifting of a luxury Boeing 747-8 to Trump. While critics may read this as symbolic extravagance, it's better understood as strategic signaling. The Gulf is betting on a future where American leadership remains vital – and they're investing accordingly. Currency, chips, and the long game Meanwhile, China quietly continues to court the Gulf with yuan-denominated oil contracts, defense deals, and Belt and Road digital infrastructure. If Washington hopes to counter this encroachment, economic alignment must come with foresight. The threat of de-dollarization is real. As more and more Asian economies prefer to trade oil in their respective currencies, the less leverage Washington holds. Economic alignment today protects dollar supremacy tomorrow. This isn't a return to Cold War-era oil politics. It's a forward-looking recognition that Gulf states are fast becoming global power brokers – economically, digitally, and diplomatically. The United States cannot afford a passive role. What Trump's trip proved is that engagement, if serious and sustained, can be mutually transformative. The Gulf has changed. The world has changed. The U.S. must now catch up – not just to protect its interests, but to shape a shared, secure, and sovereign future.
The Age
06-05-2025
- Automotive
- The Age
This luxury car can use ‘leap mode' for potholes – but it's not a Ferrari
You wouldn't suspect it from the crowds that vied for snaps with Porsche's line-up of new and classic models at Shanghai's auto show, but the German luxury carmaker has fallen on tough times in China. Chinese buyers have dimmed on the brand, whose sales plunged 42 per cent in the first quarter this year, accelerating a precipitous slide throughout 2024, as the country's economic downturn bites into the wallets of the luxury-loving classes. But the real culprit is the relentless march of China's electric vehicle industry, which, having conquered domestic demand for cheap, accessible cars, is making inroads into the high-end market where European brands once seemed unassailable. As hundreds of thousands of people traversed the sprawling, multi-level display floors showcasing more than 70 Chinese and international automotive brands at the fortnight-long Shanghai expo, there was plenty of anecdotal evidence of the challenges facing the legacy manufacturers. When it comes to price, technological prowess and even aesthetics, buyers are increasingly turning to homegrown Chinese brands. Next door to Porsche on the showroom floor was the Huawei-backed AITO brand, one of the Chinese companies eating the lunch of the foreign automakers. 'We would have considered a Porsche if we continued with an internal combustion engine, but it doesn't actually make much sense. We want to experience more high-tech things,' said Song Junqun, 41, a worker in the semiconductor industry. Song and his wife, Yu Qiong, were eyeing off the AITO's M9 luxury SUV, which pulled a sizeable crowd as people clambered into the leather-clad interior to test the software embedded in multiple screens. Huawei is viewed with suspicion in the West, particularly in Australia, where it was banned from the 5G network rollout. But in China, where it is the leading smartphone company, its pivot into the auto sector is paying off as customers seek out its cutting-edge smart driving systems. The M9 is billed as a direct rival to the Mercedes-Benz GLS, the car Song's family currently drives. But at about 500,000 yuan ($107,000), it's about half the cost. They considered Mercedes' latest EV models, and quickly passed them over. 'We made many comparisons and found that Chinese cars definitely perform better in the field of intelligent driving,' Song said. Amid the bright lights and cacophony of the Shanghai expo, one of the largest international car shows, it's almost unfathomable to think that 40 years ago, China didn't have a car manufacturing industry. Today, China is the world's biggest carmaker and exporter. Its booming EV industry is oversaturated with brands and models, sparking warnings from experts of a reckoning on the horizon. BYD, which made its first fully electric car in 2009, is now China's best-selling car brand. In 2024, it overtook Tesla as the world's top EV seller. It had sales of more than 4.27 million fully electric and hybrid vehicles, more than double its rival. Aside from BYD dominance, more than 130 Chinese EV brands are competing for the nation's buyers. The auto expo, which alternates between Shanghai and Beijing, has become a glitzy testament to the cut-price showdown in the overcrowded sector. Bolstered by generous Chinese state subsidies, most of the EV brands are loss-making ventures. BYD, Li Auto and the Seres Group (which produces the AITO brand) are among the few turning a profit. But the furious competition is driving an innovation race that spans the incredible to the absurd. At the BYD showroom, sales reps demonstrated its five-minute fast-charging technology. Another brand deployed a violin player to set the tune as its top model SUV 'danced' on its suspension. Other brands boasted rotating seats that allow back-seat passengers to face each other and play cards or, as one ill-advised promotional video shows, eat hotpot on the road. Another spruiked its 'pet-mode' customisation features. Under its luxury spin-off brand, Yangwang, BYD showcased its ultra-sleek U9 electric super-coupe – in red, of course. Alongside wing-like doors and acceleration that takes it from zero to 100km/h in under two seconds, it also has a 'leap mode' designed to jump potholes and, for unexplained reasons, road spikes. It's China's most expensive vehicle, priced at 1.68 million yuan ($360,000), pitched at the country's elite with a penchant for Ferraris or Lamborghinis. Just 160 have been sold so far in China, and while it is not widely available overseas, the vice president of the United Arab Emirates has purchased two, or so a sales rep told curious onlookers. While China's impressive technological strides in electrification should be applauded, the glut of brands heralds a warning for Australia, says Australian Automotive Dealer Association chief executive James Voortman. 'The Chinese brands are moving at a pace we've never seen before in this industry. But it is also a little bit disconcerting because it does have a feel that there are too many of them. There's a bit of a bubble,' Voortman, who visited the expo last month, says. AADA data shows there are about 60 car brands in Australia, more than a dozen of them Chinese. At least six further Chinese brands are expected to enter the market in the near future. Loading 'In Australia, we are reaching a dangerous level of oversupply. We have more makes and models than most developed countries,' Voortman says. 'It's a very perilous time.' While competition, most notably between BYD and Tesla, is driving down prices, the risk is that consumers and dealers are left high and dry when either legacy brands or new entrants quit the market, he says. Global consulting firm AlixPartners predicts that just 19 Chinese EV brands will be profitable by 2030. Among those warning of a consolidation is He Xiaopeng, chief executive of EV maker XPeng, who recently told his colleagues the next two years 'marks the elimination round in the automotive industry'. Australians still have a love affair with Japanese, Korean and US cars, which dominate new car sales. Toyota has been the country's top-selling brand for two decades. But even as EV sales in Australia have flattened recently, appetite for plug-in hybrids has soared. Last month, BYD's Shark 6 plug-in ute cracked the top 10 best-selling vehicles, in sixth spot. 'Your EV dollar in Australia these days is much more contested,' says Electric Vehicle Council head of legal, policy and advocacy Aman Gaur. The cheapest EV in Australia is BYD's Dolphin, priced under $30,000. Unlike Europe and America, which have imposed heavy tariffs on imported Chinese vehicles, Australia no longer has a local car manufacturing industry to defend. With no tariffs hobbling their entry, the Australian market, though comparatively small compared to its Asian neighbours, is seen by Chinese carmakers as a valuable testing ground for their competitiveness. 'If a Chinese car company can make a sound development in Australia, it can promote this model to other markets,' says Shanghai-based automotive analyst Zhang Xiang. Savvy Chinese buyers are also aware of the risks of betting on newer EV brands. Arriving at the show early to beat the midday rush, Mr Li, 35, a Peugeot driver for most of the past decade, made a beeline for BYD, passing the European carmakers and the less-established Chinese brands. 'The technology in Chinese cars, especially EVs, is more advanced than foreign cars,' he said. 'But new car-making brands are unstable and may go bankrupt one day. This is what I'm concerned about.'
The Age
05-05-2025
- Automotive
- The Age
This luxury car can leap potholes and road spikes - but it's not a Ferrari
You wouldn't suspect it from the crowds that vied for snaps with Porsche's line-up of new and classic models at Shanghai's auto show, but the German luxury carmaker has fallen on tough times in China. Chinese buyers have dimmed on the brand, with its sales plunging 42 per cent in the first quarter this year, accelerating a precipitous slide throughout 2024, as the country's economic downturn bites into the wallets of the luxury-loving classes. But the real culprit is the relentless march of China's electric vehicle industry, which, having conquered domestic demand for cheap, accessible cars, is making inroads into the high-end market where European brands once seemed unassailable. As hundreds of thousands of people traversed the sprawling, multi-level display floors showcasing more than 70 Chinese and international automotive brands at the fortnight-long Shanghai expo, there was plenty of anecdotal evidence of the challenges facing the legacy manufacturers. When it comes to price, technological prowess, and even aesthetics, buyers are increasingly turning to homegrown Chinese brands. Next door to Porsche on the showroom floor was the Huawei-backed AITO brand, one of the Chinese companies eating the lunch of the foreign automakers. 'We would have considered a Porsche if we continued with an internal combustion engine, but it doesn't actually make much sense. We want to experience more high-tech things,' Song Junqun, 41, a worker in the semiconductor industry, said. Song and his wife, Yu Qiong, were eyeing off the AITO's M9 luxury SUV, which pulled a sizeable crowd as people clambered into the leather-clad interior to test the software embedded across multiple flat-screens. Huawei is viewed with suspicion in the West, particularly in Australia, where it was banned from the 5G network rollout. But in China, where it is the leading smartphone company, its pivot into the auto sector is paying off as customers seek out its cutting-edge smart driving systems. The M9 is billed as a direct rival to the Mercedes-Benz GLS, the car Song's family currently drives. But at about 500,000 yuan ($107,000), it's about half the cost. They considered Mercedes' latest EV models, and quickly passed them over. 'We made many comparisons and found that Chinese cars definitely perform better in the field of intelligent driving,' Song said. Amid the bright lights and cacophony of the Shanghai expo, one of the largest international car shows, it's almost unfathomable to think that 40 years ago, China didn't have a car manufacturing industry. Today, China is the world's biggest carmaker and exporter. Its booming EV industry is oversaturated with brands and models, sparking warnings from experts of a reckoning on the horizon. BYD, which made its first fully electric car in 2009, is now China's best-selling car brand. In 2024, it overtook Tesla as the world's top EV seller, with sales of over 4.27 million fully electric and hybrid vehicles, more than double its rival's. Despite BYD dominance, more than 130 Chinese EV brands are competing for the nation's buyers. The auto expo, which alternates between Shanghai and Beijing, has become a glitzy testament to the cut-price showdown in the overcrowded sector. Bolstered by generous Chinese state subsidies, most of the EV brands are loss-making ventures. BYD, Li Auto and the Seres Group (which produces the AITO brand) are among the few turning a profit. But the furious competition is driving an innovation race that spans the incredible to the absurd. At the BYD showroom, sales reps demonstrated its five-minute fast-charging technology. Another brand deployed a violin player to set the tune as its top model SUV 'danced' on its suspension. Other brands boasted rotating seats that allow back-seat passengers to face each other and play cards or, as one ill-advised promotional video shows, eat hotpot on the road. Another spruiked its 'pet-mode' customisation features. Under its luxury spin-off brand, Yangwang, BYD showcased its ultra-sleek U9 electric super-coupe – in red, of course. With wing-like doors and the ability to hit 100km/hr in under two seconds, it also has a 'leap mode' designed to jump potholes and, for unexplained reasons, road spikes. It's China's most expensive vehicle, priced at 1.68 million yuan ($360,000), pitched at the country's elite with a penchant for Ferraris or Lamborghinis. Just 160 have been sold so far in China, and while it is not widely available overseas, the vice president of the United Arab Emirates has purchased two, or so a sales rep told curious onlookers. While China's impressive technological strides in electrification should be applauded, the glut of brands heralds a warning for Australia, Australian Automotive Dealer Association chief executive James Voortman says. 'The Chinese brands are moving at a pace we've never seen before in this industry. But it is also a little bit disconcerting because it does have a feel that there are too many of them. There's a bit of a bubble,' Voortman, who visited the expo last month, says. AADA data shows there are about 60 car brands in Australia, more than a dozen of them Chinese, with at least six further Chinese brands expected to enter the market in the near future. Loading 'In Australia, we are reaching a dangerous level of oversupply. We have more makes and models than most developed countries,' Voortman says. 'It's a very perilous time.' While competition, most notably between BYD and Tesla, is driving down prices, the risk is that consumers and dealers are left high and dry when either legacy brands or new entrants quit the market, he says. Global consulting firm AlixPartners predicts that just 19 brands Chinese EV brands will be profitable by 2030. Among those warning of a consolidation is He Xiaopeng, the chief executive of EV maker XPeng, who recently told his colleagues the next two years 'marks the elimination round in the automotive industry'. Australians still have a love affair with Japanese, Korean and US cars, which dominate new car sales. Toyota has been the country's top-selling brand for two decades. But even as EV sales in Australia have flattened recently, appetite for plug-in hybrids has soared. Last month, BYD's Shark 6 plug-in ute cracked the top 10 best-selling vehicles in sixth spot. 'Your EV dollar in Australia these days is much more contested,' Aman Gaur, the head of legal, policy and advocacy at the Electric Vehicle Council, says. The cheapest EV in Australia is BYD's Dolphin, priced under $30,000. Unlike Europe and America, which have imposed heavy tariffs on imported Chinese vehicles, Australia no longer has a local car manufacturing industry to defend. With no tariffs hobbling their entry, the Australian market, though comparatively small compared to its Asian neighbours, is seen by Chinese carmakers as a valuable testing ground for their competitiveness. 'If a Chinese car company can make a sound development in Australia, it can promote this model to other markets,' Zhang Xiang, an automotive analyst based in Shanghai, says. Savvy Chinese buyers are also aware of the risks of betting on newer EV brands. Arriving at the show early to beat the midday rush, Mr Li, 35, a Peugeot driver for most of the past decade, made a beeline for BYD, passing the European carmakers and the less-established Chinese brands. 'The technology in Chinese cars, especially EVs, is more advanced than foreign cars,' he said. 'But new car-making brands are unstable and may go bankrupt one day. This is what I'm concerned about.'
Sydney Morning Herald
05-05-2025
- Automotive
- Sydney Morning Herald
This luxury car can leap potholes and road spikes - but it's not a Ferrari
You wouldn't suspect it from the crowds that vied for snaps with Porsche's line-up of new and classic models at Shanghai's auto show, but the German luxury carmaker has fallen on tough times in China. Chinese buyers have dimmed on the brand, with its sales plunging 42 per cent in the first quarter this year, accelerating a precipitous slide throughout 2024, as the country's economic downturn bites into the wallets of the luxury-loving classes. But the real culprit is the relentless march of China's electric vehicle industry, which, having conquered domestic demand for cheap, accessible cars, is making inroads into the high-end market where European brands once seemed unassailable. As hundreds of thousands of people traversed the sprawling, multi-level display floors showcasing more than 70 Chinese and international automotive brands at the fortnight-long Shanghai expo, there was plenty of anecdotal evidence of the challenges facing the legacy manufacturers. When it comes to price, technological prowess, and even aesthetics, buyers are increasingly turning to homegrown Chinese brands. Next door to Porsche on the showroom floor was the Huawei-backed AITO brand, one of the Chinese companies eating the lunch of the foreign automakers. 'We would have considered a Porsche if we continued with an internal combustion engine, but it doesn't actually make much sense. We want to experience more high-tech things,' Song Junqun, 41, a worker in the semiconductor industry, said. Song and his wife, Yu Qiong, were eyeing off the AITO's M9 luxury SUV, which pulled a sizeable crowd as people clambered into the leather-clad interior to test the software embedded across multiple flat-screens. Huawei is viewed with suspicion in the West, particularly in Australia, where it was banned from the 5G network rollout. But in China, where it is the leading smartphone company, its pivot into the auto sector is paying off as customers seek out its cutting-edge smart driving systems. The M9 is billed as a direct rival to the Mercedes-Benz GLS, the car Song's family currently drives. But at about 500,000 yuan ($107,000), it's about half the cost. They considered Mercedes' latest EV models, and quickly passed them over. 'We made many comparisons and found that Chinese cars definitely perform better in the field of intelligent driving,' Song said. Amid the bright lights and cacophony of the Shanghai expo, one of the largest international car shows, it's almost unfathomable to think that 40 years ago, China didn't have a car manufacturing industry. Today, China is the world's biggest carmaker and exporter. Its booming EV industry is oversaturated with brands and models, sparking warnings from experts of a reckoning on the horizon. BYD, which made its first fully electric car in 2009, is now China's best-selling car brand. In 2024, it overtook Tesla as the world's top EV seller, with sales of over 4.27 million fully electric and hybrid vehicles, more than double its rival's. Despite BYD dominance, more than 130 Chinese EV brands are competing for the nation's buyers. The auto expo, which alternates between Shanghai and Beijing, has become a glitzy testament to the cut-price showdown in the overcrowded sector. Bolstered by generous Chinese state subsidies, most of the EV brands are loss-making ventures. BYD, Li Auto and the Seres Group (which produces the AITO brand) are among the few turning a profit. But the furious competition is driving an innovation race that spans the incredible to the absurd. At the BYD showroom, sales reps demonstrated its five-minute fast-charging technology. Another brand deployed a violin player to set the tune as its top model SUV 'danced' on its suspension. Other brands boasted rotating seats that allow back-seat passengers to face each other and play cards or, as one ill-advised promotional video shows, eat hotpot on the road. Another spruiked its 'pet-mode' customisation features. Under its luxury spin-off brand, Yangwang, BYD showcased its ultra-sleek U9 electric super-coupe – in red, of course. With wing-like doors and the ability to hit 100km/hr in under two seconds, it also has a 'leap mode' designed to jump potholes and, for unexplained reasons, road spikes. It's China's most expensive vehicle, priced at 1.68 million yuan ($360,000), pitched at the country's elite with a penchant for Ferraris or Lamborghinis. Just 160 have been sold so far in China, and while it is not widely available overseas, the vice president of the United Arab Emirates has purchased two, or so a sales rep told curious onlookers. While China's impressive technological strides in electrification should be applauded, the glut of brands heralds a warning for Australia, Australian Automotive Dealer Association chief executive James Voortman says. 'The Chinese brands are moving at a pace we've never seen before in this industry. But it is also a little bit disconcerting because it does have a feel that there are too many of them. There's a bit of a bubble,' Voortman, who visited the expo last month, says. AADA data shows there are about 60 car brands in Australia, more than a dozen of them Chinese, with at least six further Chinese brands expected to enter the market in the near future. Loading 'In Australia, we are reaching a dangerous level of oversupply. We have more makes and models than most developed countries,' Voortman says. 'It's a very perilous time.' While competition, most notably between BYD and Tesla, is driving down prices, the risk is that consumers and dealers are left high and dry when either legacy brands or new entrants quit the market, he says. Global consulting firm AlixPartners predicts that just 19 brands Chinese EV brands will be profitable by 2030. Among those warning of a consolidation is He Xiaopeng, the chief executive of EV maker XPeng, who recently told his colleagues the next two years 'marks the elimination round in the automotive industry'. Australians still have a love affair with Japanese, Korean and US cars, which dominate new car sales. Toyota has been the country's top-selling brand for two decades. But even as EV sales in Australia have flattened recently, appetite for plug-in hybrids has soared. Last month, BYD's Shark 6 plug-in ute cracked the top 10 best-selling vehicles in sixth spot. 'Your EV dollar in Australia these days is much more contested,' Aman Gaur, the head of legal, policy and advocacy at the Electric Vehicle Council, says. The cheapest EV in Australia is BYD's Dolphin, priced under $30,000. Unlike Europe and America, which have imposed heavy tariffs on imported Chinese vehicles, Australia no longer has a local car manufacturing industry to defend. With no tariffs hobbling their entry, the Australian market, though comparatively small compared to its Asian neighbours, is seen by Chinese carmakers as a valuable testing ground for their competitiveness. 'If a Chinese car company can make a sound development in Australia, it can promote this model to other markets,' Zhang Xiang, an automotive analyst based in Shanghai, says. Savvy Chinese buyers are also aware of the risks of betting on newer EV brands. Arriving at the show early to beat the midday rush, Mr Li, 35, a Peugeot driver for most of the past decade, made a beeline for BYD, passing the European carmakers and the less-established Chinese brands. 'The technology in Chinese cars, especially EVs, is more advanced than foreign cars,' he said. 'But new car-making brands are unstable and may go bankrupt one day. This is what I'm concerned about.'
