China has risen to prominence as the foremost investor in Saudi Arabia’s greenfield projects, with a staggering $16.8 billion directed into the nation in 2023. This represents an unprecedented 1,020 percent increase from the previous year’s investments.
Emirates NBD’s data places the United States and the United Arab Emirates as the subsequent leading contributors of greenfield FDI to Saudi Arabia, with $2.7 billion and $2.67 billion invested, respectively.
Further down the list, Kuwait claims the fourth position with investments of $937 million, closely trailed by Hong Kong at $796 million in the fifth spot.
Greenfield FDI is defined as a scenario where a parent company launches a new venture in a foreign country by building new operational facilities from the ground up.
Saudi Arabia has set an ambitious target of attracting over $100 billion in FDI by 2030, part of its strategic initiative to diversify its economy and reduce oil dependence.
The report indicates that a significant portion of the Chinese investment, amounting to $5.6 billion, was injected into the automotive original equipment manufacturing sector. This influx stemmed from a deal between Human Horizons and Saudi Arabia’s Ministry of Investment, signed during the Arab-China business conference in June 2023.
Under this agreement, the Chinese firm aims to establish an automotive research, development, manufacturing, and sales hub within the Kingdom.
Additional substantial Chinese investments include $5.26 billion in the metals industry and $4.26 billion in the semiconductor sector.
The report also notes a 110 percent surge in total greenfield FDI in Saudi Arabia for the year, totaling $28.78 billion. This figure eclipses the previous high in 2018 of $17.57 billion, though it falls short of the 2008 peak of $34.26 billion.
Riyadh commanded the lion’s share of greenfield FDI, with $8.18 billion, with Ras Al-Khair and Dammam following at $4.23 billion and $772 million, respectively.
The Kingdom’s burgeoning tourism sector also benefited from an inflow of $227 million. Notably, a major development was the inauguration of a 223-room hotel by US-based Radisson Hospitality, located at the Riyadh Convention and Exhibition Center, which had a construction cost of $112 million.
Additionally, Liechtenstein’s Olayan Investment Co. Establishment is investing a similar sum to develop The Mondrian Riyadh Al-Malga Hotel and Residences. This 200-room property, slated to open its doors in 2026, will be managed by the UK’s Ennismore, a reputable hospitality firm.