China emerges as the largest greenfield investor
China emerged as Saudi Arabia’s largest greenfield investment country last year. This signifies a deepening relationship between the two nations.
According to the Institute for International Economic Policy, on the 10th, China invested $16.8 billion in Saudi Arabia last year, securing its position as a major greenfield foreign direct investment (FDI) country. This is a 1020% year-on-year increase.
This figure significantly surpasses the United States ($2.7 billion) and the United Arab Emirates ($2.67 billion). Greenfield FDI refers to the method in which overseas ventures establish production facilities or subsidiaries directly in the target country for investment.
Saudi Arabia’s total greenfield FDI recorded $28.78 billion, a 110% year-on-year increase. The capital, Riyadh, accounted for the largest portion of this investment.
Saudi Arabia and China have been strengthening their close relationship recently. Following the summit between Chinese President Xi Jinping and Crown Prince of Saudi Arabia Mohammed bin Salman in December 2022, the two countries are expanding their economic cooperation. China is the world’s largest oil importer and Saudi Arabia’s largest trading partner.
In November last year, the two countries signed their first currency swap agreement worth 50 billion yuan (approximately $6.89 billion). A currency swap is a foreign exchange transaction in which two different currencies are exchanged at a pre-agreed rate. Additionally, in the same month, the first Saudi Arabian exchange-traded fund (ETF) in Asia was listed on the Hong Kong stock market.
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