Middle East investments in China to bloom in amount, scope in 2024 as sovereign wealth funds aim to diversify: bankers

Sovereign wealth funds in Saudi Arabia and the United Arab Emirates (UAE) are gearing up to invest more in Chinese companies in 2024, as the oil-producing nations seek to diversify their economies and broaden their global investment portfolios amid warming ties between China and the Middle East, according to the regional head of Deutsche Bank.

State-owned investors in Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE invested more than US$2.3 billion into Greater China in 2023, compared with about US$100 million in 2022, according to Global SWF, a database that tracks the world’s sovereign wealth funds. This came amid Beijing’s push to strengthen ties with the Middle East, following Chinese President Xi Jinping’s visit to Riyadh in December 2022.

“Saudi Arabia and UAE companies are turning their attention towards China because they want to diversify beyond the US or Western Europe, and this is driven in part by their confidence in the strength of China’s economy as well,” said Kees Hoving, CEO for Middle East and Africa at Deutsche Bank.

The Jafal Fund of Funds, owned by Saudi Arabia’s US$800 billion Public Investment Fund (PIF), in December increased its stake in eWTP Arabia Capital, a joint venture fund with Chinese tech giant Alibaba Group Holding in a bid to tap Chinese tech companies with the potential to expand in the Middle East. Meanwhile, Mubadala Investment Company, Abu Dhabi’s sovereign investor, opened a Beijing office in September.