RIYADH, 19 October 2004 — For the first time, a major Saudi company will invest in China’s construction sector, lending a new direction to Saudi-Chinese relations. China’s bilateral trade with the Kingdom grew by 25 percent last year and a whopping 83 percent in January this year alone.
Al-Suwaiket Trading & Contracting Group of Companies, ranked 14th among the Kingdom’s top 100 companies, has signed a Memorandum of Understanding (MoU) with a Chinese firm for the construction of commercial buildings in China.
Though the deal, worth $50,000, is nowhere near the multi-billion Saudi investments in the US and Europe, it marks a new direction in looking east in terms of trade and investment. At the government level, Sinopec Group, China’s state-controlled refinery, has already held talks with Saudi Aramco about taking a stake in a $1.2 billion refinery in the Chinese city of Qingdao. According to Amr A. Al-Dabbagh, governor of the Saudi Arabian Investment Authority (SAGIA), the Saudi private sector has been investing at least SR18 billion ($4.80 billion) annually abroad. “Saudi Arabia has been a net exporter of capital for the last 30 years,” he said, adding that SAGIA hopes to channel these investments in the energy industry covering petrochemicals, water and electricity generation and energy intensive industries such as minerals.
Spelling out the details of the MoU, Mubarak Al-Suwaiket, president of the Al-Suwaiket group, told Arab News that they would provide $50,000 to Xinjiang Construction Engineering Co. for the construction of commercial properties in China. Xinjiang will be responsible for the management and maintenance of buildings once they have been constructed.
He said the two organizations had signed a partnership agreement early this year to construct high rise and residential buildings in the Kingdom, the GCC states and the Middle East to capitalize on the construction boom that is expected to continue for the next few years. Saudi contractors have already contributed significantly to the local construction market whose volume of business is expected to reach SR64 billion by the end of this year, up from SR16 billion last year.
