China has escalated its investment presence in Saudi Arabia, particularly concentrating on sectors pivotal for non-oil economic expansion. With a significant 58% stake in the region’s new business ventures, China’s focus has been on industries such as semiconductors, automotive, and metals.
The influx of Chinese capital reached $16.8 billion, a substantial leap from the $1.5 billion recorded in the previous year, according to Emirates NBD data. Saudi Arabia aims to attract over $100 billion in foreign direct investments (FDI) by 2030 as part of its economic diversification strategy.
FDI in Saudi Arabia saw a twofold increase, reaching $28.9 billion, outstripping the past high of $17.6 billion in 2018, yet not reaching the 2008 zenith of $34.3 billion. The report from EmiratesNBD highlights a shift in foreign capital towards nations like India and China.
After China, the United States emerged as the second-largest investor in the region, with investments soaring to $2.7 billion, marking a 238% growth. The majority of these U.S. investments were channeled into technology and software.
The United Arab Emirates claimed the third spot as a source of greenfield FDI into Saudi Arabia, with investments amounting to USD 2.67 billion, representing a 225% increase from the previous year. The UAE’s investments were predominantly in the renewable energy sector, which received USD 1 billion in greenfield FDI, followed by the communications sector with $444 million, and the food and beverages sector with $237 million. Kuwait secured the fourth position with $949 million invested, reflecting a 189% increase from the prior year.
Kuwait’s investments were heavily weighted towards the real estate sector, with $639 million committed, metals at $228 million, and food and beverages at $83 million.
Ranking fifth, Hong Kong invested $796 million in greenfield FDI, mainly steered by GCL Technology Holdings’ $763 million venture in a manufacturing project within the chemical sector.
Leading the investment front, Oracle has allocated $950 million across two projects. A notable initiative includes a partnership with Saudi Arabia’s Ministry of Communications and Information Technology (MCIT) to establish a new public cloud region in Riyadh for an estimated $750 million. Additionally, Oracle is boosting the capacity of its existing cloud region in Jeddah with a projected $200 million investment.