© Reuters. FILE PHOTO: Flags of participating countries are pictured ahead of the China-Arab summit in Riyadh, Saudi Arabia, December 7, 2022. REUTERS/Mohammed Benmansour
By Julie Zhu and Aziz El Yaakoubi
HONG KONG/RIYADH (Reuters) – Chinese entrepreneurs and investors are flocking to Riyadh this week to attend a business conference, which will bring together business and government leaders aiming to explore expansion and fundraising opportunities, amid warming diplomatic relations.
Saudi Arabia will be hosting the 10th Arab-China Business Conference, the first such forum since Chinese President Xi Jinping’s ‘epoch-making’ visit to the Gulf state, which Beijing described as the biggest diplomatic initiative in the Arab world.
The gathering on Sunday and Monday will take place two days after U.S. Secretary of State Antony Blinken visited Saudi Arabia as Washington works to mend frayed ties with its closest ally in the Middle East.
Deepening cooperation between Riyadh and Beijing in security and sensitive high-tech has been a major U.S. concern.
The business conference will draw about 2,000 attendees from Greater China, in what will be one of the region’s biggest-yet business delegation to Saudi Arabia, according to one person with direct knowledge of the matter.
The gathering between the world’s second-largest economy and Gulf energy giants comes as economic slowdown and geopolitical tensions have made fundraising and expansion challenging for many Chinese funds and companies.
“From the perspective of both capital and new market, the Middle East, Saudi Arabia are really good new choices for Chinese companies and investors,” said Henry Zhang, president of Hong Kong-based private equity firm Hermitage Capital.
Zhang, who will travel to Riyadh and attend the conference for the first time along with a number of portfolio companies, said he hopes the trip can help his investees explore the local market and help himself understand the real demands of Middle Eastern investors for Chinese funds.
“Since late last year, a large number of Chinese funds have rushed to the Middle East looking for new investors. In light of this, what we have to think about is what the potential investors want and how we can differentiate ourselves.”
The event also comes as Saudi Arabia, the world’s top crude exporter and largest Arab economy, aims to cut oil dependence and modernise the country with new industries under its economic agenda – Vision 2030 while deepening ties with Beijing.
China is Saudi Arabia’s top trading partner globally with bilateral trade worth $87.3 billion in 2021. While economic ties remain anchored by energy interests, bilateral relations have expanded under the latter’s infrastructure and technology push.
Robert Mogielnicki, senior resident scholar at the Arab Gulf States Institute in Washington, said one key reason for Saudi-Chinese linkages strengthening is that the Arab country is looking for major growth areas via international partnerships.
“The calculation here is that there (is) much to gain from more cooperation with China,” he said.
“Chinese technology firms have read the writing on the wall and see the Saudi Vision 2030 transformation agenda as an invitation for longer-term commercial engagement with Saudi customers.”
For the upcoming conference, Chinese entrepreneurs in attendance represent a range of industries — from renewable energy and artificial intelligence to biotech, finance and tourism.
According to Edison Gao, China-based group vice president of Saudi conglomerate Ajlan & Brothers, the attitude of Chinese enterprises towards expanding in the Gulf state has also undergone “tremendous changes”.
“I’ve never seen Chinese companies being so interested in and committed to the Saudi market,” said Gao, who joined Ajlan in 2017 and has since been helping attract Chinese firms to expand locally.
“Previously, I had to actively pitch Chinese companies to consider Saudi Arabia as their destination of outbound investment and overseas expansion. But it’s the other way around recently, I’ve received many business proposals from them.”