RIYADH: 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.

Source: ARAB NEWS