8 Factors Powering the Surge of Chinese Capital into Saudi Arabia

Saudi Arabia is experiencing a transformational shift in its investment landscape, positioning itself as a global investment hub driven by Chinese capital. In 2024, Chinese foreign direct investment (FDI) stock surged by 28.8%, reaching SAR 31.1 billion (USD 8.2 billion), marking a pivotal moment in the Kingdom's economic diversification.

This surge is further demonstrated by the rise of 35 Chinese Regional Headquarters (RHQs) in Riyadh, solidifying China’s commitment to long-term strategic operations within Saudi Arabia. This blog explores the key factors driving Chinese investments, the rise of RHQs, and why Saudi Arabia has become a focal point for Chinese capital in the MENA region.

Current Market Landscape: The Shifting Investment Terrain in Saudi Arabia

Saudi Arabia’s Vision 2030 has laid the foundation for an economic transformation, attracting foreign investments across sectors like energy, technology, and infrastructure. As part of this transformation, Saudi Arabia has introduced policies to create an investor-friendly ecosystem, including the RHQ program, Special Economic Zones (SEZs), and full 100% foreign ownership for businesses.

By mid-2025, over 600 multinational RHQs are expected to be operational in Riyadh, far surpassing the initial target for 2030. Bilateral trade between China and Saudi Arabia has exceeded USD 100 billion annually, making China Saudi Arabia’s top trading partner for over a decade. This strong trade base provides Chinese companies with a solid foundation to scale operations and expand investments in Saudi Arabia, perfectly aligned with Vision 2030.

Chinese FDI in Saudi Arabia: The $8.2B Surge

The surge in Chinese investments is evident from the numbers:

• Chinese FDI stock in Saudi Arabia grew to SAR 31.1 billion (USD 8.2 billion) in 2024, reflecting a 28.8% increase year-on-year. 
• Total FDI inflows into Saudi Arabia reached USD 31.7 billion in 2024, with Chinese capital emerging as a key contributor, particularly in greenfield investments and joint ventures.
• In H1 2025, Saudi Arabia recorded SAR 22.2 billion (USD 5.9 billion) in net FDI, underlining continued investor confidence despite global economic uncertainties.

These figures clearly show that Chinese capital is playing an increasingly pivotal role in Saudi Arabia’s economic growth, particularly in digital infrastructure, electric vehicles (EVs), renewable energy, and construction sectors central to the Kingdom’s Vision 2030.

The RHQ Program: A Key Driver of Chinese Investment in Saudi Arabia

The RHQ program is integral to Saudi Arabia’s economic strategy. Under this initiative, foreign companies are required to establish a local headquarters to qualify for government contracts, making it an essential move for those seeking access to Saudi Arabia’s government-backed projects.

Chinese firms have been quick to seize this opportunity, with 35 Chinese companies already establishing RHQs in Riyadh. For these firms, RHQs represent more than just compliance they are strategic footholds to embed operations, secure local partnerships, and access multi-billion dollar contracts, particularly in sectors aligned with Vision 2030.

8 Key Drivers Powering Chinese Investment in Saudi Arabia:

1. Strong Bilateral Trade Base

China and Saudi Arabia have maintained a strong trade relationship, with USD 100 billion in annual trade. This trade base provides Chinese companies with the confidence to scale investments in the Kingdom, leveraging the RHQ program to reduce market-entry risks and access local customers.

2. Alignment with Vision 2030

Saudi Arabia’s Vision 2030 highlights renewable energy, electric vehicles (EVs), cloud infrastructure, and artificial intelligence as strategic sectors. Chinese firms, particularly in EVs (BYD) and cloud computing (Huawei), are ideally positioned to take advantage of Saudi Arabia’s EV adoption target of 30% in Riyadh by 2030.

3. Favorable Policy Incentives

Saudi Arabia’s RHQ program offers tax exemptions, Saudization flexibility, and regulatory advantages, providing Chinese companies with a clear path to localize operations and access government contracts.

4. Greenfield Investments & Joint Ventures

Between 2021 and late 2024, China ranked as the top source of greenfield FDI into Saudi Arabia, with investments worth USD 21.6 billion. These investments are primarily focused on clean tech, digital infrastructure, and manufacturing, which are critical for Saudi Arabia’s economic diversification.

5. Strategic Location

Riyadh is emerging as a regional HQ capital, offering Chinese firms access to Saudi Arabia’s domestic market, as well as GCC, Africa, and European markets. This strategic location provides companies with the opportunity to expand their reach across multiple regions.

6. Investment in EVs & Clean Tech

As Saudi Arabia pushes for EV adoption, Chinese firms are at the forefront, with substantial investments in EV production and charging infrastructure. This aligns with the Kingdom’s broader goals of sustainability and energy diversification.

7. Robust Infrastructure & Giga-Projects

Saudi Arabia’s mega-projects, including NEOM, Red Sea Development, and Riyadh Expo 2030, offer unique investment opportunities for Chinese firms involved in construction, engineering, and technology. Chinese companies are playing a vital role in building the infrastructure required for these ambitious projects.

8. Economic Reforms & Strategic Partnerships

Saudi Arabia’s ongoing economic reforms and joint ventures with Chinese entities in sectors like renewable energy and high-tech manufacturing are driving investment flows. These collaborations help build local infrastructure, create jobs, and drive technological innovation, further cementing Saudi Arabia as an investment hub.

How Your Business Can Leverage the 8 Key Factors Driving Investment in Saudi Arabia

The surge in Chinese FDI and the rise of 35 RHQs in Saudi Arabia present huge opportunities for businesses to tap into the Kingdom’s growing market. By entering the Saudi market, you gain access to over 450 million consumers in the GCC and beyond, offering a unique growth opportunity in a region on the rise.

The RHQ program offers several advantages, including tax exemptions and the ability to operate with full foreign ownership. These benefits make it easier for businesses to establish themselves and gain access to government-backed projects, accelerating growth in sectors like renewable energy, digital infrastructure, and electric vehicles (EVs).

By aligning with Saudi Arabia’s Vision 2030, your business can tap into emerging sectors like AI, cloud infrastructure, and clean energy. The Saudi government is committed to fostering a business-friendly environment, and strategic partnerships with local players will ensure a smooth market entry.

Ready to Make Your Business Part of Saudi Arabia’s Booming Market?

With over 18 years of regional expertise, TASC helps companies establish a strong foothold in Saudi Arabia. From setting up your RHQ to ensuring full compliance, we guide you through every step of the process to help you succeed in the Kingdom’s fast-growing economy.

Contact us today and let’s explore how your business can thrive in Saudi Arabia!