Both nations have been committed to solidifying long-term economic growth
Visitors view products at the Saudi Arabia booth at the second China International Import Expo in Shanghai in 2019. (LYU LIANG / FOR CHINA DAILY)
Chinese companies will play a key role in facilitating Saudi Arabia's construction of modern infrastructure and service facilities to help the kingdom attract more foreign investment and put economic growth on a firmer footing in the long run, business leaders said.
They added that continued foreign and domestic investment in infrastructure development such as ports, roads and airports will offer practical solutions in supporting economic growth across many Middle East countries over the next decade, creating better conditions to stimulate trade and people-to-people exchanges in this regional market.
With the continuous and rapid development of bilateral relations in recent years, a growing number of Chinese companies started doing business in Saudi Arabia, making positive contributions to localizing Saudi Arabia's industrial sector, promoting employment and bolstering development in various fields, said Ma Yu, a researcher at the Chinese Academy of International Trade and Economic Cooperation in Beijing.
One such company is China Railway Eighteenth Bureau Group, or CR18BG, a subsidiary of State-owned China Railway Construction Corp, which secured a 6.5 billion yuan ($934 million) contract in June from Rua Al Madinah Holding, a wholly-owned subsidiary of the Saudi Public Investment Fund, for the construction of a 5-kilometer-long tunnel in Madinah.
The key developer of the Madinah Tunnel Project, PIF aims to complete it within 42 months. This is a part of the Grand Mosque revamp project in Saudi Arabia.
The tunnel work includes building a number of tunnel and related projects, including a pedestrian bridge.
Under the contract, the Tianjin-headquartered Chinese company will handle the structure and decoration of the pedestrian bridge.
The company will also be responsible for structure, decoration and internal mechanical, electrical, and plumbing works of the underground passage.
Chen Debin, general manager of CR18BG's Saudi Arabia branch, said the company has adopted the advantages of China's industrial chain in the field of construction manufacturing, to meet its client's demand for ecological protection, energy saving and waste reduction.
"Thanks to the closer ties between China and Saudi Arabia, local policies are fairly favorable to the Chinese business contractors," Chen said.
He added that the group will deploy more resources and manpower in target countries such as Saudi Arabia and the United Arab Emirates in the coming years as the companies there have built a large number of projects, including bridges, tunnels, roads, residential buildings, office complexes and other commercial buildings.
The countries have advanced policies in attracting global businesses to build a presence in their markets.
Eager to grab more market share in the fast-growing market generated by trade in services between China and Saudi Arabia, Ajlan & Bros Holding Group, or ABHG, a Saudi Arabia-based conglomerate, partnered with Chinese courier and logistics service provider SF Express to set up a joint venture in Saudi Arabia in the first quarter of this year.
The joint venture's main tasks involve introducing the latest technological solutions in the country's logistics sector and creating fresh growth points for its cross-border e-commerce sector.
A Hongqi H9 model is displayed at a store in Riyadh, Saudi Arabia. (WANG HAIZHOU / XINHUA)
In contrast to the merchandise trade, trade in services refers to the purchase and sale of services. According to the World Trade Organization, trade in services cover 12 major sectors.
These include commerce, communication, construction and related engineering, finance, entertainment, culture, sports, tourism, education and environment.
The Saudi group also sealed a deal with Inner Mongolia autonomous region-based Chifeng Jilong Gold Mining to establish a joint venture designed to conduct gold exploration in Saudi Arabia earlier this year.
Thanks to Saudi Arabia's efforts to develop more clean-energy-related projects, Jinko Power Technology, a Shanghai-headquartered photovoltaic product manufacturer and solar power facility provider, won a contract to build a 300-megawatt peak solar photovoltaic park in the country in February.
The project is located in Central province, approximately 80 km from Riyadh. Electricity generated from this project will be acquired by Riyadh-based Saudi Power Procurement through a 25-year power purchase deal. The construction will take place in 2022 and 2023.
Once operational, the new energy park will help to cut carbon emissions in Saudi Arabia by over 500,000 metric tons per year. Investment for the project is valued at over $200 million, according to the Chinese company.
"This deal has enhanced our market presence in Saudi Arabia as well as the Middle East region," said Li Xiande, chairman of Jinko Solar.
After years of growth, Chinese companies in Saudi Arabia have significantly contributed to the country's development and fulfilled their social responsibilities, according to a report released by the Contact Office of Chinese Companies in Saudi Arabia this month.
Drafted by the branch of China Petrochemical Corporation, or Sinopec in Saudi Arabia, the Social Responsibility Report of Chinese Companies in Saudi Arabia presents several cases of the economic, environmental and social responsibility programs undertaken by Chinese enterprises in Saudi Arabia in recent years.
Chen Weiqing, Chinese ambassador to Saudi Arabia, said Chinese enterprises have overcome difficulties and assumed heavy responsibilities. They contributed to the development of the Belt and Road Initiative, and injected momentum into the economic and trade cooperation between China and Saudi Arabia.
The report said Chinese businesses have driven the growth of local manufacturing and business by cooperating with local partners and facilitating sustainable economic and social development in local places via technology transfers.
Chinese companies also teamed up with local governments and businesses to provide better public services, including communications, electricity, public transportation and medical care, all of which helped to improve local people's livelihoods.
The report added that the Chinese enterprises also strictly follow a philosophy of green development in their production. In addition to being Saudi Arabia's major trading partner, China can offer its technical and technological capacities, which will contribute to Riyadh's industrial powerhouse ambitions and supply chain infrastructure, said Feng Yaoxiang, director of the trade and investment promotion department at the China Council for the Promotion of International Trade in Beijing.
Backed by China's strong industrial and supply chains, Chinese companies still have more options to further diversify their market channels in Saudi Arabia and other Middle East markets, given the accelerating globalization and many economies' demands for building or upgrading infrastructure facilities, he added.