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China and US vie for FDI supremacy in Gulf’s biggest economies

People, Person, Adult Dubai Tourism
Dubai was the leading city for greenfield FDI in 2023, up 32% with 1,036 projects
  • United States invested $3.8bn in UAE
  • Saudi Arabia got $16.8bn from China
  • ‘Pivotal shift from oil dependency’

China and the United States invested more than $23 billion in projects in the Gulf’s two biggest economies last year.

The US more than doubled its “greenfield” foreign direct investment in the UAE to nearly $4 billion, while China’s commitment to Saudi Arabia rose 10-fold to almost $17 billion.

Greenfield FDI involves a foreign entity establishing operations in another country by building facilities from the ground up. It can drive economic growth in the funding destination by creating jobs, transferring knowledge and improving competition.

Research from fDi Markets and Emirates NBD has found that greenfield investment from the US into the UAE increased by 137 percent last year to $3.8 billion. This made the US the Emirates' top investor. China was placed fifth. 

The UAE had 1,280 greenfield FDI projects in 2023, placing it second to the US in global rankings. This was up 36 percent on 2022. It attracted more than $15 billion in total.

Globally, Dubai retained its position as the leading city for number of greenfield FDI projects, beating Singapore and London. It had 1,036 projects, a rise of 32 percent.

Saudi Arabia, the Gulf's biggest economy, attracted greenfield FDI of nearly $29 billion, more than double the total in 2022.



The 2023 total, which is the highest since 2018 but still shy of the 2008 record of more than $34 billion, was boosted by the introduction of special economic zones and the establishment of the Saudi Investment Promotion Authority.  

China was by far the biggest investor with $16.8 billion, reflecting Saudi Arabia’s pivot to the East since the "watershed" visit of President Xi Jinping to Riyadh in December 2022. 

“The $28.8 billion in greenfield FDI achieved last year demonstrates Saudi Arabia’s growing appeal as a regional hub for international investment,” said Mayed Al Rashdi, research manager at Emirates NBD.

“This influx, driven by significant contributions to sectors like automotive, metals, semiconductors and IT services, marks a pivotal shift from traditional oil dependency.”

He added that growth in the UAE’s greenfield FDI came on the back of “strategic regulatory reforms and ambitious trade agreements”.

“These changes have not only facilitated ease of doing business but have also instilled confidence among foreign investors regarding the protection of their investments.”

The UAE has set a target of attracting $150 billion in FDI by 2031 while Saudi Arabia is chasing $100 billion by 2030.

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