From the perspective of Middle Eastern nations, strategies such as “Looking East,” “Balancing East and West,” and “Enhancing Strategic Autonomy” are being implemented, not solely relying on political diplomacy but also on close economic cooperation and significant capital investments. In recent times, there has been an unprecedented surge of interest in investing in China across the Middle East, with countries and businesses in the region increasingly turning to China.
Notable Investments in China
- Saudi Aramco’s Stake in Rongsheng Petrochemical: On July 21, Saudi Aramco, the Saudi Arabian petroleum company, completed a strategic investment of $3.4 billion in China’s privately-owned refining company, Rongsheng Petrochemical, acquiring a 10% stake. Media reports suggest that Saudi Aramco’s total investments in China have exceeded CNY 100 billion, with plans for further expansion.
- UAE Sovereign Wealth Fund Invests in NIO: On July 13, CYVN Holdings, a subsidiary of a United Arab Emirates sovereign wealth fund, completed a $1.1 billion strategic investment in NIO, the Chinese smart electric vehicle company, acquiring a 7% stake.
- Jordanian-Chinese Joint Venture with Great Wall Motors: On June 19, Jordan’s largest private company, Manaseer Group, signed a strategic cooperation agreement with China’s Great Wall Motors to establish a joint venture for electric vehicle production and sales in Jordan.
- Saudi Government Collaboration with Human Horizons: On June 11, Saudi Arabia’s Ministry of Investment signed a $5.6 billion cooperation agreement with Human Horizons, a Chinese innovative travel technology company, to establish a joint venture focused on automotive research, manufacturing, and sales.
- Saudi Vision Industries and TCL Energy Cooperation: On May 24, Saudi Vision Industries and China’s TCL Energy, a new energy technology company, signed a strategic cooperation agreement to establish a joint venture and invest in a photovoltaic crystal chip factory project in Saudi Arabia.
In addition to these investments, Middle Eastern countries and businesses are also expanding into various sectors in China, including internet technology, petrochemicals, biopharmaceuticals, and high-end equipment. According to reports, Middle Eastern sovereign wealth funds, including the Abu Dhabi Investment Authority and the Kuwait Investment Authority, have become top shareholders in over 40 Chinese A-share listed companies.
Why the “Heavy Investment in China”?
- Positive Outlook on China’s Macroeconomy: In the first half of 2023, China’s economy maintained steady growth, achieving a year-on-year GDP increase of 5.5% in the midst of global economic uncertainties. This resilience, potential, dynamism, and long-term positive trajectory of the Chinese economy have not gone unnoticed. In contrast, major economies like the United States, the Eurozone, and Japan reported GDP growth rates of 1.8%, 1%, and 1.9% respectively in the first quarter of the year. Even considering second-quarter factors, China’s economic prospects remain robust. The accelerated investment in the Chinese capital market reflects regional countries’ sustained confidence in China’s macroeconomic prospects.
- Alignment of China’s Development Strategy with Regional Needs: In the face of the current challenges posed by “de-globalization,” China is rapidly constructing a new development pattern characterized by the “dual circulation” strategy, emphasizing high-quality development, expanding high-level opening-up, and offering widely popular public goods such as the Belt and Road Initiative and global development proposals. Meanwhile, Middle Eastern nations are unveiling economic diversification strategies, including Saudi Arabia’s Vision 2030 plan, aiming to reduce their dependence on oil-based economies. The alignment of regional economic transformation goals with China’s development strategy has encouraged further investment to strengthen mutual interests and share the benefits of China’s development strategy.
- China’s Attractive Industries for Regional Countries: China holds a leading position in traditional infrastructure sectors such as ports, high-speed railways, roads, and urbanization. It is also dominant in cutting-edge areas like 5G, e-commerce, electronic payments, smart automobiles, photovoltaics, biopharmaceuticals, and space science. These align closely with the priority industries in Middle Eastern nations. China’s integrated industrial chains allow regional countries to access a “one-stop” service for the transfer of capabilities, technologies, and experiences through investments, making it a natural choice for collaboration.
In Conclusion
The growing interest and investment in the Chinese market by Middle Eastern countries and businesses are a clear reflection of the global consensus on China’s promising prospects. As China continues to promote the development of an open world economy, it is expected that more countries and enterprises will come to China for investment and growth opportunities.