Arab News, Sat, Apr 06, 2024 | Ramadan 27, 1445
China becomes top greenfield investor in Saudi Arabia with $16.8bn
Saudi Arabia:
China has become the top greenfield foreign direct investor in Saudi Arabia with
investments amounting to $16.8 billion in 2023, a 1,020 percent rise from the
previous year.
According to Emirates NBD, China was followed by
the US and the UAE, with greenfield FDI amounting to $2.7 billion and $2.67
billion, respectively.
Kuwait came in fourth with $937 million, while
Hong Kong garnered the fifth spot at $796 million.
Greenfield FDI is a form of investment where a
parent company starts a new venture in a foreign country by constructing
operational facilities.
Saudi Arabia is targeting over $100 billion in FDI
by 2030, as the Kingdom is steadily diversifying its economy by reducing its
dependency on oil.
According to the report, $5.6 billion of the
Chinese capital flowed into the automotive original equipment manufacturing
sector, completely backed by a deal signed by Human Horizons and the Kingdom’s
Ministry of Investment in June 2023 during the Arab-China business conference.
Under the deal, the Chinese company is setting up
an automotive research, development, manufacturing, and sales facility in Saudi
Arabia.
The Asian giant also invested $5.26 billion and
4.26 billion in the metals and semiconductor sectors, respectively.
The report revealed that the inflow of total
greenfield FDI in Saudi Arabia also soared by 110 percent year-on-year to $28.78
billion.
The inflows in 2023 have surpassed the 2018 high
of $17.57 billion but remained shy of the 2008 record of $34.26 billion.
Riyadh captured the largest share of the total
greenfield FDI, receiving $8.18 billion, followed by Ras Al-Khair and Dammam,
with $4.23 billion and $772 million, respectively.
The report highlighted that the tourism sector in
the Kingdom received $227 million in investments.
A major acquisition in the tourism sector was
completed by US-based Radisson Hospitality, which opened a 223-room hotel in
Riyadh Convention and Exhibition Center at an estimated cost of $112 million.
Additionally, Liechtenstein-based Olayan
Investment Co. Establishment has invested an estimated $112 million to build The
Mondrian Riyadh Al-Malga Hotel and Residences. The 200-room inn is expected to
open in 2026 and will be operated by UK-based hospitality developer and operator
Ennismore.