34 Asian Legal Business | September 2024 Eastern promise China’s economic ties with the Middle East have been rapidly expanding. This surge in economic activity has led to a growing trend of Chinese companies investing in various sectors across the region. Lawyers say that while opportunities abound, companies must carefully consider the business logic of their investments and navigate the unique cultural and legal landscape to ensure success. By Hu Yangxiaoxiao cially the six GCC countries, and experienced first-hand changes in Chinese companies’ investment in the region. He believes that the strong interest shown by Chinese companies in the Middle Eastern market recently indeed should not be underestimated. “According to figures disclosed by embassies and consulates, in 2023 alone, there were seven sub-national and more than 70 ministerial-level delegations, as well as numerous delegations from various regions and associations, to the Middle East.” “Those delegations also had relatively clear itineraries upon arrival in the Middle East. They mostly visited Abu Dhabi, Dubai and Riyadh, and sometimes Saudi Arabia’s two port cities of Dammam and Jeddah.” In general, Chinese companies are most interested in UAE which is more sophisticated in development and Saudi Arabia which has greater market potential, while Qatar and Oman have also attracted the interest of some investors. To Maria Hou, partner of Zhong Lun Law Firm, changes in the international environment have led to Chinese companies “pivoting towards the Middle East”, which is particularly evident in photovoltaic companies. “Between 2018 and 2022, Chinese photovoltaic companies were more interested in investing in Southeast Asia. In March 2022, however, due to U.S. anti-circumvention investigation of Chinese companies’ investments in Cambodia, Malaysia, Thailand and Vietnam, photovoltaic companies began to consider relocating to safer investment destinations. The timing coincided with closer exchanges between Middle East Ever since Chinese President Xi Jinping visited Saudi Arabia at the end of 2022, China’s economic, trade and investment exchanges with Saudi Arabia and the Middle East in general have become increasingly active. “Going to the Middle East” has become a popular strategy for Chinese companies in the past two years. According to official data, in 2022 and 2023, bilateral trade between China and the Middle East both reached approximately $500 billion, an increase of over 20 percent compared with 2021. Despite the lack of authoritative investment statistics at present, by the end of 2022, China has become the third largest foreign investor in the United Arab Emirates (UAE), and according to data from Emirates NBD Bank, China was Saudi Arabia’s largest greenfield investor in 2023, with investment accounting for 58 percent of the latter’s total greenfield investment. Two-way advancement Speaking of the reasons behind China’s growing enthusiasm for investing in the Middle East over the past two years, Jia Huaiyuan, director of the Middle East office of DeHeng Law Offices, says that global geopolitics cannot be ignored. Amid the current macro environment, “regions suitable for outbound investment by Chinese companies and with a relatively relaxed investment environment are mainly in Southeast Asia, Mexico and the Middle East.” Based in Dubai since 2004, Jia has, over the past two decades, witnessed the development of the Middle East, espe-
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