Mittlerer Ostens Kapital beschleunigt die Integration in China
Former oil-rich countries are accelerating the integration of capital into China through various investment channels.
With more than 58% of the world's total oil reserves, Middle Eastern countries have accumulated huge wealth in the era of fossil energy. Now they expect to bet on the East with their capital. Capital from countries such as Saudi Arabia, the United Arab Emirates, Qatar, Kuwait, and Jordan are all flocking to China.
Since the beginning of this year, the "eastward movement" of Middle Eastern capital has accelerated: 5 billion yuan was transferred to the account of GCL Technology, and 638 million US dollars was invested in Wanhua Chemical Group Co., Ltd. The overall progress of the Huajin Aramco super-large refinery project witnessed by the heads of state of China and Saudi Arabia has reached 80%. Another landmark project, the Zhongsha Fujian Gulei Ethylene Project's "operator", Zhongsha Refining and Chemical Co., Ltd., was also officially established recently.
Moreover, Middle Eastern countries not only make direct investments through core enterprises or sovereign funds, but also act as LPs behind the scenes, betting on China through GPs who know China better.
With several major Middle Eastern sovereign funds setting up offices in China, Middle Eastern capital will have more direct access to the Chinese market. Currently, Middle Eastern tycoons have already shifted from pure financial investment to seeking industrial synergy and promoting the diversified transformation of their domestic economies.
After more than two decades of development, the "old money in the Middle East" is making a historic leap from "looking at China" to "investing in China" and then to "binding with China".
1 Investment
Since the beginning of this year, an investment institution called Infini Capital has frequently made strong moves in the H-share market, attracting a lot of attention.
Public information shows that its founder, Tony Chin, was born in Shanghai and grew up in Hong Kong. He worked at Morgan Stanley and HSBC in his early years. He should be the most successful GP among Chinese investors and investment institutions who have gone to the Middle East to seek gold.
In April, Infini Capital was approved by the Abu Dhabi Financial Services Regulatory Authority and officially obtained a financial license, becoming the first institution of its kind in Asia to be approved for an Abu Dhabi financial license and to set up an office there. With the support of Middle Eastern "big money", Infini Capital has invested nearly HK$15 billion in several Hong Kong-listed companies in the past three months, making bold moves.
First, in June, it participated in the Hong Kong IPOs of Caocao Chuxing and Lens Technology as a cornerstone investor. Since July, Infini Capital has also successively participated in the investment of Fourth Paradigm, SenseTime Group, China Ruyi, GCL Technology, Weimob Group and other Hong Kong-listed companies.
Specifically, it invested HK$1.308 billion in Fourth Paradigm, holding 4.98% of the shares; invested HK$2.5 billion in SenseTime as a strategic investment; invested HK$3.9 billion in China Ruyi, the new controlling entity of Wanda Film, with a shareholding ratio of up to 7.51%; participated in the private placement of GCL Technology and was allocated 4.736 billion shares, injecting a total of HK$5.446 billion; and provided US$200 million in support to Weimob Group.
In addition, at the end of August this year, Infini Capital also granted a financing credit line of up to US$1 billion to Ubtech Robotics, the "first stock" in the humanoid robot field, and will increase its stake in Ubtech at an "appropriate time", with the shareholding not exceeding 5%.
Infini Capital was established in 2015 and was initially an unknown "small factory". It is rumored that even in 2019, it was still running around to raise funds. To attract capital, it even offered investors insurance to cover the initial 10% loss.
In March 2024, Infini Capital was approved to set up an office in Abu Dhabi. Since then, with the support of Middle Eastern consortiums, it quickly gained momentum. It invested about HK$57 million in CMGE Technology Group Limited, and its fund, Infini, also appeared on the list of cornerstone investors of SF Holding Co., Ltd. But this was just a small attempt by the company in the H-share market.
In 2016, Japanese billionaire Masayoshi Son told Saudi Crown Prince Mohammed bin Salman, "As long as you lend me $100 billion, I can return $1 trillion." Immediately afterwards, the young Saudi prince provided $45 billion to the Vision Fund.
Infini Capital has seemingly become a "second Vision Fund" to some extent, and Tony Chin is like a second Masayoshi Son, trying to build a bridge between China and the Middle East. The foundation of this bridge is capital.
Tony Chin once said in an interview that by cooperating with Middle Eastern sovereign wealth funds, he aims to build a capital channel between Middle Eastern sovereign funds and China's hard technology. In the future, he also plans to set up offices in Shanghai and Shenzhen, focusing on "specialized, refined, distinctive and innovative" enterprises.
By sorting out the investment targets of the Vision Fund, Infini Capital and other investment institutions favored by Middle Eastern capital, we can see that the former mainly invests in new Internet economy or fintech enterprises, while the latter focuses more on hard technology enterprises in the fields of AI or new energy.
Since the beginning of this year, Chinese technology assets have undergone a historic revaluation. The ChiNext Index and the Sci - Tech Innovation 50 Index have both doubled since the "September 24th market" last year. Global long - term capital has generally shifted from a wait - and - see attitude to buying Chinese assets, especially in the fields of artificial intelligence, new energy, and new consumption, which have attracted a large amount of capital.
It is foreseeable that in the future, Middle Eastern consortiums will rely on more "Infini Capitals" to deeply participate in the investment of various industries in China.
2 Westward Movement
"The Middle East is becoming the world's ATM. Now, everyone wants to go to the Middle East - it's like the gold rush in the United States used to be." The Wall Street Journal once described the boom in entrepreneurship and investment in the Middle East in this way.
However, today's Middle Eastern tycoons are not "foolish with lots of money". Guided by ambitious national strategies such as Saudi Arabia's "Vision 2030" and the UAE's diversification reform, Middle Eastern capital has shifted from being pure financial investors to builders of industrial ecosystems. Compared with simply importing goods and exporting capital, they hope to introduce China's advantageous industries into their countries to serve their economic transformation, especially in the planning of the manufacturing industry.
Especially in the field of new energy, Saudi Arabia's "Vision 2030" has significantly increased the economic contribution of non - oil sectors. It plans to increase the renewable energy production capacity to 58.7GW by 2030, and this goal has now been raised to 130GW.
The photovoltaic and energy storage project is of top priority, and the all - round cooperation between Middle Eastern capital and GCL is one of the most typical examples.
On the one hand, Infini Capital has taken a stake in GCL Technology to strengthen the capital tie; on the other hand, the two sides will jointly launch a special industrial fund to jointly strengthen GCL Technology's market position in the fields of granular silicon technology and silane gas.
Through the capital link, GCL has obtained a "ticket" to enter Middle Eastern countries first, an advantage that is difficult for other enterprises with limited capital cooperation to achieve.
In June this year, GCL New Energy Holdings Limited signed a cooperation agreement with SAUDI ARABIAN ELECTRICITY AND WATER INVESTMENT COMPANY (ACWA Power)'s Shadian Investment (Shanghai) Company. The two sides will conduct in - depth cooperation in the fields of wind power, photovoltaic and energy storage, pumped - storage energy, and the integration of power sources, grids, loads, and energy storage.
One year ago, GCL New Energy Holdings Limited joined hands with the UAE's sovereign fund Mubadala Investment Company to plan to launch the first overseas FBR granular silicon project in the UAE, build a silicon - based materials industry chain, and attract downstream enterprises to settle in by leveraging the abundant sunlight resources in the Middle East.
ACWA Power Chairman Mohammed Abunayyan once clearly stated at the Summer Davos Forum that "Without China's support in equipment manufacturing, innovation, and the industrial chain, it would be difficult for us to achieve energy transformation." This shows how clear and specific the demand of Middle Eastern capital is for China's manufacturing system and industrial operation ecosystem.
Middle Eastern funds are also deeply involved in China's energy transformation - which forms a risk hedge against China's declining demand for traditional oil. Public information shows that the Saudi sovereign wealth fund PIF plans to invest 50 billion US dollars in China by 2030 to achieve the grand goal of 22GW of clean power installed capacity in China.
In July this year, PIF surpassed the Kuwait Investment Authority, with its management scale reaching 1.15 trillion US dollars. It ranks fourth among global sovereign wealth funds and first in the Middle East. Its investment direction is an important indicator for capital in the Middle East.
The integration between the Chinese industrial circle and the Middle East in the field of new energy is quite in - depth. In addition to GCL, other large - scale Chinese photovoltaic enterprises are also going global to the Middle East, regarding it as an important growth market.
Since last year, Chinese photovoltaic enterprises have made a large number of project plans in the Middle East: JinkoSolar plans to invest in a 10GW high - efficiency battery and component project in Saudi Arabia; TCL Zhonghuan will build the world's largest crystal wafer factory; Envision Group has established a joint - venture company for wind power equipment in Saudi Arabia; Sungrow Power Supply Co., Ltd. has also signed a 7.8GWh ultra - large energy storage project with Saudi Arabia's ALGIHAZ.
On April 8 this year, Sinopec also signed a cooperation agreement on the expansion of the Yanbu refinery with Saudi Aramco. Located in the Yanbu Industrial City on the Red Sea coast of Saudi Arabia, the project plans to build a new ethylene plant with an annual capacity of 1.8 million tons, an aromatic hydrocarbon plant with an annual capacity of 1.5 million tons, and supporting downstream polyolefin plants. After the project is put into operation, it will once again enhance Saudi Arabia's production capacity of high - end petrochemical products and provide important raw materials for the development of its industrial system.
Behind these benchmark projects is the impetus of PIF as the flagship institution of Saudi capital. It can be seen that Middle Eastern countries are using capital as a lever to achieve two - way integration at the industrial end.
3 New Beginning
Although Middle Eastern countries have started their diversified transformation, it cannot be denied that to this day, oil remains the economic pillar of many countries.
Different from the previous model of simply exporting crude oil and natural gas, the cooperation between Middle Eastern countries and China has penetrated into the downstream industrial chain.
For Middle Eastern countries, it can upgrade their traditional oil extraction and sales industries. By investing and taking stakes, they can obtain an entry ticket to high - value - added and refined production. They can also bring continuous raw material sales profits and capital return benefits to Gulf countries by binding with core enterprises in the world's largest oil - consuming country.
On September 3 this year, Kuwait's Petrochemical Industries Company (PIC) obtained a 25% stake in Yantai Wanhua Petrochemical Co., Ltd., a subsidiary of Wanhua Chemical Group Co., Ltd., through a capital increase of 638 million US dollars.
Looking through the information, the cooperation between the two sides can be traced back to 2013 when Wanhua Chemical Group Co., Ltd. signed a long - term LPG supply agreement with Kuwait Petroleum Corporation (KPC). This made Wanhua Chemical the first domestic enterprise to directly obtain Middle Eastern LPG (liquefied petroleum gas) resources, building an energy corridor "from the Persian Gulf directly to the Yellow and Bohai Seas".
Wanhua Chemical focuses on the fields of polyurethane, petrochemicals, and fine chemicals. Kuwait's Petrochemical Industries Company (PIC) is an important subsidiary of Kuwait Petroleum Corporation (KPC). Relying on Kuwait's rich oil and gas resources, KPC's annual LPG export volume is 4.5 million tons, and its naphtha production is 10 million tons per year.
PIC's investment is the largest - scale petrochemical project of Kuwait in China. The most important consideration for its investment is to bind with the core high - value - added chemicals of Wanhua Chemical. Through the capital and resource link, it can not only find a long - term buyer for Kuwait's oil but also obtain part of the benefits from the in - depth processing of these oil resources.
In addition to Kuwait, there are also new developments in the two largest - scale and highest - capacity petrochemical projects invested by Saudi Arabia in China.
In September, Fujian Zhongsha Refining and Chemical Co., Ltd., a joint - venture between Sinopec and Saudi Aramco, was officially established, with a registered capital of up to 28.8 billion yuan. This company is the operator of the second - phase project of the Zhongsha Gulei project, with a total investment of up to 71.1 billion yuan. It is the largest industrial investment project in Fujian Province and also the largest single - investment refining and chemical project of Sinopec.
The project includes more than 30 sets of refining and chemical plants and supporting facilities such as an ethylene plant with an annual capacity of 1.6 million tons, an aromatic hydrocarbon plant with an annual capacity of 1.5 million tons, and downstream polyolefin plants.
Another cross - border joint - venture masterpiece, Huajin Aramco, is a national - level project witnessed by the heads of state of China and Saudi Arabia. Currently, the overall progress has reached 80%. In March 2023, Huajin Group under China North Industries Group Corporation, Saudi Aramco, and Panjin Xincheng Group jointly invested 83.7 billion yuan to plan to build 32 sets of production plants and supporting facilities such as a refinery with an annual capacity of 15 million tons, an ethylene plant with an annual capacity of 1.65 million tons, and a PX plant with an annual capacity of 2 million tons. After the project is put into operation, the annual sales revenue is expected to exceed 100 billion yuan.
Among the large - scale refining and chemical projects planned in China after 2023, only five have a scale of over 10 million tons per year, and two of them are in cooperation with Saudi Aramco. It can be seen how much the country attaches importance to Middle Eastern capital.
Saudi Arabia is the world's second - largest oil - producing country, with a daily output of 10.856 million barrels (in 2024). Saudi Aramco plans to convert 4 million barrels of crude oil into high - value - added chemicals per day by 2030, which is equivalent to reshaping the value of