Increasing Number of Chinese Tech Companies Invest in Saudi Arabia
In recent years, the relationship between China and Saudi Arabia has seen significant growth, with closer economic and trade ties. As the level of cooperation between the two nations continues to rise, more and more Chinese technology companies are setting up operations in Saudi Arabia. Notably, companies like Huawei are playing a vital role in supporting Saudi Arabia’s digital economy transformation, while Chinese e-commerce enterprises are also gaining a foothold in the country.
The Saudi authorities have expressed their willingness to work together with China to strengthen friendship and exchanges between the two nations continually. They aim to expand the scope of cooperation in areas such as economy, trade, energy, big data, and artificial intelligence, deepening the comprehensive strategic partnership between Saudi Arabia and China for the benefit of both peoples.
In December of the previous year, a joint statement from China and Saudi Arabia emphasized the importance of close exchanges between the two governments and private sectors. The objective is to explore economic and investment opportunities and transform them into concrete cooperation to elevate the economic and developmental relationship to a higher level.
As a result of the increasing cooperation between the two countries, Saudi Arabia is becoming an appealing choice for Chinese tech companies looking to expand internationally. In the realm of digital infrastructure, Chinese tech companies are making notable contributions to Saudi Arabia’s digital economy transformation. Huawei, for example, announced during the first LEAP Tech Exhibition last February that it would establish a cloud region in Saudi Arabia to provide more robust and secure cloud services. Subsequently, Huawei signed a memorandum of understanding with the Saudi government to promote cloud computing and smart city development.
Last June, Huawei collaborated with the Saudi Space Commission (SSC) to launch the Future Space, the first-ever technology experience center in Saudi Arabia. The center focuses on advanced technologies such as autonomous driving, 3D printing, and brainwave-controlled robots. In December, Huawei signed a memorandum of understanding with the Saudi Ministry of Communications and Information Technology to strengthen information and communication technology cooperation, committing to achieve a 10Gbps society and establish ultra-high-speed broadband infrastructure in support of Saudi Arabia’s Vision 2030 digital transformation goals.
In February of this year, Haisam Oqlah, the Deputy Minister of Communications and Information Technology of Saudi Arabia, attending Huawei’s annual conference for the Middle East and Central Asia region, expressed Saudi Arabia’s commitment to collaborating with the private sector to enhance technological innovation. He mentioned that continued cooperation with Huawei would improve Saudi Arabia’s industry competitiveness and drive the development of its digital economy.
The momentum of Chinese e-commerce companies expanding into Saudi Arabia is robust. Recognizing the advantages of international and regional traditional e-commerce brands like Amazon and Noon, which offer a wide range of products, Chinese e-commerce companies are focusing more on brand uniqueness, specialization, and localization. For instance, Hibobi, a company specializing in mother and baby products, capitalized on China’s dominant position in children’s clothing globally and combined it with the underdeveloped children’s clothing market and ample room for growth in Saudi Arabia. The company positioned itself as a provider of mid-to-high-end clothing, catering to the preferences of local Saudi consumers, and has been well-received in the country. In Onesight’s 2022 Q3 ranking of the most influential e-commerce brands with overseas presence, Hibobi jumped into the top 30, with a significant portion of its natural traffic originating from Saudi Arabia.
Similarly, SheIn, a Chinese e-commerce company focusing on women’s apparel, has been prominent in the Saudi Arabian market. It emphasizes brand operation, inventory control, and supply chain support. SheIn consistently ranks among the top in the shopping app download rankings in Saudi Arabia. In a recent gesture of corporate social responsibility, SheIn donated SAR 400,000 to the Saudi Autism Society, providing rehabilitation, education, and family support programs for children with autism spectrum disorders. This act received widespread appreciation.
New energy vehicles are an important aspect of Saudi Arabia’s efforts to promote industrial localization, presenting numerous cooperation opportunities for both Chinese and Saudi companies in this field. In December of the previous year, Skywell Automobile and a local Saudi company jointly established a joint venture, investing approximately $500 million in Saudi Arabia to set up a new energy vehicle production and research base. The joint venture aims to produce around 100,000 new energy vehicles annually, extending the influence of Chinese new energy vehicle brands to Saudi Arabia and its surrounding regions. In early March, Saudi Aramco announced its plan to invest in the powertrain technology (PWT) joint venture company established by Geely and Renault. According to Aramco’s statement, the new company will focus on internal combustion engine and hybrid powertrain technology. Aramco’s investment is expected to contribute to the development of synthetic fuel solutions and key technologies for the next-generation hydrogen power.
In recent times, there has been frequent interaction between China and Saudi Arabia concerning technological industrial cooperation. In mid-March, the Saudi-Chinese Business Council and the Ajlan & Bros Holding Group organized a technology industry exchange and sharing event in Beijing. The event called for companies from both countries to seize new opportunities for technological cooperation. The chairman of the Saudi-Chinese Business Council and vice-chairman of Ajlan & Bros Group, Mohamed El Ajlan, stated during the event that China is a natural partner for Saudi Arabia in its quest to become a leader in technological innovation. At the same time, Saudi Arabia is a crucial strategic partner for China’s digital economic development.
Since the beginning of the year, delegations from various Chinese regions such as Hong Kong, Inner Mongolia, Guangxi, and Ningxia have come to Saudi Arabia to conduct economic and trade matchmaking activities. They have connected with Saudi government agencies, companies, and sovereign funds, exploring cooperation opportunities in various fields, including technology. Anas Fada, Vice President of the Saudi-Chinese Business Council, expressed during one of the matchmaking activities that Saudi Arabia is willing to work together with China to strengthen friendship and exchanges between the two countries. They aim to expand the scope of cooperation in areas such as economy, trade, energy, big data, and artificial intelligence, deepening the comprehensive strategic partnership between Saudi Arabia and China for the benefit of both peoples.