A secondary marker

This is about markers and my speculation on them. I would go towards presumption, but in this instance might have the folly thought that these markets haven’t evolved since 1982 and that would indeed be folly. Still, an article in the South China Morning Post aka SCMP (at https://www.scmp.com/economy/china-economy/article/3276753/saudi-arabia-seeks-chinese-tech-it-reinvents-itself-car-and-automation-hub) where we see ‘Saudi Arabia seeks Chinese tech as it reinvents itself as car and automation hub’ and this goes against Trumpism to seek 60% tariff on Chinese imports. Well, China has its own solution to this. As we are given “Saudi industry and mineral resources minister Bandar Alkhorayef is leading a delegation to visit Guangzhou, Hong Kong and Singapore from Sunday until September 8, according to a statement from his office. The trip is aimed at improving relations and exploring joint venture opportunities.” 

The setting is given, but it doesn’t seem all is given (as one could accept). You see I got news (slightly unreliable) that there was a trade show recently where China had given a presentation to Arabic parties. This seems perfectly normal, the fact that Norinco is part of that seems normal enough, its a defence contractor dream and they are all hungry for Arabic dineros (aka digital currency). The parts that we do not see here is that this Chinese tech is a lot more versatile, or better stated far reaching. It implies that the tech allows Saudi Arabia to manufacture Tiger armoured vehicles with a deployment to the customers in Oman, Bahrain and Egypt to name just three. Saudi Arabia is fulfilling its promise to cater to internal manufacturing their defence needs and gain customers at the same time. As such Trumps goals are missed completely as well as losing out their own industry towards export. See how all these blocks of censorship come tumbling down? And as we take notice that Chinese is no good. Feast your eyes on this “China lacks the necessary international standards to be considered a reliable producer of foolproof weaponry” according to Euclides Tapia, professor of International Relations at the University of Panama. Yet the thing to remember is that the setting of “necessary international standards” is not clearly given and a standard that is filtered to who can be given those reminds me of the SAS standard in the 90’s ‘SAS stamp of quality’ which SAS products got. A little one sided. Still no matter what these ‘standards’ are, America, UK and the EU nations are missing out on another set of billions to the degree that now Saudi Arabia is also becoming a manufacturing party. As such the Americans woke up to a hungry tiger. With allegedly Huawei scoring the option of communication systems deployed all over Saudi Arabia both civilian and military (still unverified) we see a better relationship between Saudi Arabia and China with several middle easters nations now following suit. I reckon that Egypt is the first and most likely player to get on board with that express line. Norinco seemingly had a net income of $1.7B in 2023 with a little over $80B revenue. 

I reckon that they are hungry for more revenue, especially as in increases their net revenue and as I see it, the Saudi link get them there fast. Is it wishful thinking? Is it presumption or speculation? All great questions and yes, there is a speculative side to this. Now consider that you have a car plant, would it be such a stretch to build a second one to get the orders for the Tiger armoured vehicles? I don’t think so, especially when we consider the 2030 promise to get 50% of the defence spending in country (as was given to us 2 years ago). That one thing will not get them there, but there is more coming and this is a whopper of a delivery towards their 2030 goal.

As such there are things that need verification, or we could wait until these plants become a reality in an expected 2026 stage. So what do you think? I believe that Chinese commerce will find a way to thrive and the Trump setting made is much easier as well as make things harder for Europe. This is the consequence of arrogance when you do not have the cash to back up your actions and America and western Europe are about to learn just how much they lose out of (as per 2026/2027). So how will Norinco stock fare when this gets released?

Have a great day.