China-MENAT Summit: Connecting the Dots for Profitable Investments
In a recently released report titled "The China-MENAT Corridor: Unlocking Growth Potential", HSBC highlights the significant expansion expected in business and investment interactions between China and the Middle East, North Africa, and Türkiye (MENAT) region over the next five years. The report was presented at HSBC's China-MENAT Summit, where experts from the bank's regional leadership team shared insights on the Middle East's ongoing economic transformation with a diverse audience, including entrepreneurs, sovereign wealth funds, investment agencies, and government representatives.
Addressing the gathering, Stephen Moss, Regional Chief Executive for Middle East, North Africa, and Türkiye (MENAT) at HSBC Bank Middle East, emphasised the unprecedented economic changes taking place in the MENAT region, primarily led by Saudi Arabia and the UAE. He noted that this growth momentum is driven by their vision to diversify economies and lead the way in energy transition.
Moss remarked, "This is an opportune time for Chinese investors and businesses to make inroads into the Middle East, to capture inbound and outbound investment opportunities." He added that HSBC's extensive presence and international network covering more than 90 percent of global GDP, trade, and financial flows position them to connect clients with emerging opportunities in capital markets, international investments, technology, infrastructure, and energy transition along this dynamic economic corridor.
HSBC's report delves into the current state of trade and investment between MENAT and China. It outlines the substantial growth in trade between these regions and the flows of foreign direct investment, considering how their complementary strengths in energy resources and manufacturing offer significant potential for increased economic and business collaboration.
Key findings in the report include:
Trade Milestones: Trade between the Gulf Cooperation Council (GCC) and China surpassed GCC trade with the US and Euro Area combined for the first time in 2021, reflecting China's increasing importance as a trading partner. Additionally, there is an estimated US$178 billion in untapped trade potential between China and MENAT between now and 2027.
Bilateral Trade Success: China has become Saudi Arabia's largest trading partner in the Middle East, with bilateral trade reaching US$106 billion in 2022. Furthermore, the UAE stands as China's second-largest trading partner in the Arab world, with non-oil trade between the two countries exceeding US$72 billion in 2022, marking an 18 percent growth from the previous year.
Mark Wang, President and Chief Executive Officer of HSBC China, commented on the growing interest from Chinese clients in tapping into MENAT's vast market potential. He noted that innovation and sustainability are driving growth across the region, particularly in emerging sectors of the new economy. Wang observed a synergy between the two emerging markets, with Chinese companies contributing expertise in digital innovation, climate tech, and new business models, while MENAT offers essential capital and market opportunities, driven by a growing young population and a rising demand for renewables.
HSBC's extensive history in both MENAT and China, dating back to the late 19th century, positions the bank as a pivotal player in facilitating these expanding economic ties. With a significant presence in eight MENAT markets and a leading international banking role in China, HSBC is well-prepared to meet the multi-dimensional needs of Chinese businesses looking to invest in the fast-growing economies of the Middle East, particularly in Saudi Arabia.
In Saudi Arabia, HSBC is a 31 percent shareholder of SAB (formerly known as Saudi British Bank) and a 51 percent shareholder of HSBC Saudi Arabia for investment banking in the Kingdom, making it the largest international bank in Saudi Arabia. These strategic investments place HSBC in an ideal position to assist Chinese businesses seeking opportunities in the Kingdom's rapidly evolving economy.
As the economic corridor between China and the MENAT region gains momentum, HSBC remains committed to fostering and facilitating this robust partnership, which promises to unlock substantial growth potential for businesses on both sides.