(Bloomberg) -- EWPartners, an investment firm backed by Saudi Arabia’s sovereign wealth fund, is planning to develop a so-called special economic zone inside the country to boost Chinese trade with the oil-rich kingdom.
The KSA-Sino Logistics Zone will be developed at Saudi Arabia’s new King Salman International Airport, Cliff Chau, managing partner at Riyadh-based EWPartners, said in an interview. It will aim to bring in Chinese firms involved in logistics, light manufacturing and reexports into Saudi Arabia to serve the wider Middle East, Africa and Europe, he said.
The firm is currently in talks with potential investors including both Asian and Middle East sovereign wealth funds to finance around $2 billion for the initial development costs, said Chau, a former executive at China Investment Corp. The full cost of developing the 4 square kilometer zone, which is scheduled to launch by the end of next year, is still being determined, he said.
“The slowdown in Chinese growth means more upcoming and mature Chinese companies are looking at Saudi Arabia for growth,” Chau said. “We have received so many calls from businesses in mainland China that want to get up and running in Saudi Arabia.”
Saudi Arabia has been looking to boost its trade ties with China, the biggest buyer of its oil exports, as it looks to diversify its economy and geopolitical alliances. At the same time, China has been looking to increase its influence in the Middle East amid a growing rivalry with the US.
Middle East investors have deployed a record amount into China so far this year, Bloomberg reported in September, while Chinese businesses have increasingly been looking to invest into the Middle East or establish new operations in the region. Earlier this year China Investment Corp backed a $1 billion fund established by Investcorp Holdings to invest in companies across the Persian Gulf and China.
EWPartners was established in 2017 to help bring Chinese firms into Saudi Arabia. It’s already invested with Alibaba Group’s cloud computing unit to establish a partnership with Saudi Telecom Co. called Saudi Cloud Computing Co. It’s currently raising a new $1 billion fund to invest in technology and energy ventures.
“We think the golden investment period for this region is still to come,” he said. “On the ground here the temperature is red hot for businesses from mainland China.”
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