(This event is organised by MEI’s Arabia-Asia Research Cluster, as part of its monthly seminar series.)

Abstract

When the People’s Republic of China (PRC) announced the Belt and Road Initiative (BRI) in 2014, Beijing initially committed $40 billion in the Middle East. Even though experts predicted the increase of Chinese foreign direct investment (FDI) in the region, the question remains how much will the committed investments change the previously existing economic relations between China and the Middle East? Across the globe, various reports use occasionally incompatible numbers to report on Chinese FDI in the Middle East. As a result of employing these different methodologies to construct and compile data, these reports arrive at contradictory results. As such, this paper attempts to present a comprehensive and detailed synthesis of Chinese FDI in the Middle East by comparing these different Chinese, international, and host country sources.

Using the different sources, this paper bridges the different datasets on Chinese FDI in the Middle East. This paper argues that the economies of China and the Middle East present distinct yet compatible institutional complementarities. These potential mutually beneficial economic structures can pave the way for future and more institutionalized economic exchanges. The paper is structured as follows. First, it analyzes the overall amount of Chinese capital inflows and FDI stocks in the Middle East, taking into account sectoral concentration and temporal variation from early 1990s to 2017. Second, by applying network analysis to the data, it attempts to map out the key Chinese actors and host country partners across the region. Finally, the paper demonstrates the argument of distinct yet compatible institutional complementarities by examining the specific case of Chinese FDI in Saudi Arabia.