The Hong Kong and Shanghai-listed company, one of the mainland's two main railway building firms, is involved in more than 20 projects in Saudi Arabia with investments totalling at least US$3.5 billion, according to the firm's website.

In a July visit to China Railway's facilities in Kunming, the capital of Yunnan province, President Hu Jintao urged the company to expand into international markets and become a top-tier global entity.

For these large mainland construction companies, profit margins from overseas were higher than from domestic business, said Ben Simpfendorfer, the chief China economist of Royal Bank of Scotland Group.

China Railway is leading a consortium bidding for US$1.4 billion in contracts for a 450-kilometre high-speed line between Saudi Arabia's two holy cities of Mecca and Medina.

This is after another consortium headed by the company won a US$1.8 billion tender to build an 18-kilometre light rail system in Mecca.

The Saudi authorities wanted to see the first phase of the Mecca light rail completed in time for the Haj pilgrimage by Muslims in November next year, said Yam Kong, general manager of HCCG China Holdings, a subsidiary of Hsin Chong Construction Group.

Hsin Chong, a Hong Kong-listed construction firm, has teamed up with China Railway for the design and construction management of the Mecca project.

'We're talking about building the track within 22 months. Other similar projects take 48 months,' Yam said. 'This is one of the toughest and shortest metro projects in the world. We have no choice but to use more workers than normally needed.'

About 1,500 workers, many of them Chinese, were involved at present and this was likely to grow to 2,500 early next year, he said.

Construction companies try to source workers from China's Muslim population of 20 million.

'Two-thirds of the light rail track lies in areas forbidden to non-Muslims. This is one of the challenges,' Yam said. 'The Saudi infrastructure boom started two or three years ago and the global financial crisis does not seem to have affected Saudi infrastructure construction.'

Edmund Leung Kwong-ho, an executive director and managing director at Hsin Chong, said: 'The Middle East has a desire to build a lot more infrastructure. They need railways, power supply and airports, so they attract lots of contractors.'

According to Chinese officials, there are 62 mainland companies operating in Saudi Arabia. They employ almost 22,000, of whom 15,800 are Chinese, according to a report by Agence France-Presse.

'I expect ties, mainly commercial, to strengthen between China and the Middle East over the next few years. It definitely helps that China has an advantage over the West because it doesn't have the historical baggage going back to the Crusades,' Simpfendorfer said.

Chinese infrastructure firms are also active in Libya where leader Muammar Gaddafi witnessed the ceremonial laying of tracks by Libyan and Chinese workers in August to mark the completion of a coastal railway built by China Railway.

The same day, Gaddafi met the Chinese ambassador to Libya, Wang Wangsheng, along with two China Railway executives, which highlights the partnership between the Chinese government and state-owned enterprises in extending Beijing's political and business influence abroad.

'Our strategy accords with China's strategy for the Middle East. The Middle East is an important market for China Railway,' said senior engineer Sun Guofu.

Simpfendorfer said: 'A lot of European companies are active in Libya, but China is ahead of the pack.'

Chinese firms are also expanding in Algeria, despite reports of a threat by an al-Qaeda-backed organisation to attack mainland businesses in North Africa in revenge for Muslim deaths in the riots in Xinjiang in July.

In April, China Railway, Citic and several multinationals won a US$6.5 billion contract to build half of Algeria's 1,216-kilometre East-West Highway, the biggest road project in the world. China Railway has also won two railway contracts worth a combined Euro2.16 billion (HK$25 billion).

China State Construction Engineering Corp, a state-owned building firm that had one of the world's biggest initial public offerings in Hong Kong in July, employs 9,000 mainland workers in Algeria on projects such as building offices for the country's foreign ministry, according to Simpfendorfer's personal website.

Earnings drive

For mainland firms, overseas profits can dwarf domestic business

Value of China Railway Construction's 20 contracts in Saudi Arabia, in US$: $3.5b