Chinese investment in the Gulf states will rise

Significance

Chinese businesses are building investment in countries of the Gulf Cooperation Council (GCC), where they currently lag the United States, Europe and Japan. Renewable energy is a priority target, along with electric vehicles (EVs), logistics and artificial intelligence (AI). The Chinese government has supported the investment drive through high-profile diplomacy.

Impacts

• Many deals announced in Saudi Arabia will require the development of large manufacturing sites, which will present resource challenges.
• Washington will pressure GCC governments to limit Chinese AI investment.
• GCC sovereign wealth funds will build equity stakes in Chinese firms, including those involved in new investment ventures in the Gulf.