Weblog with daily updates of the news on a frugal, fair and beautiful China, from the perspective of internet entrepreneur, new media advisor and president of the China Speakers Bureau Fons Tuinstra
Winston Ma, an investor, attorney, author, and adjunct professor in the global digital economy, discusses at a Miami conference who can follow as leaders in AI for Arab News. He believes also countries like Saudi Arabia can follow those two leaders, although it does mean a lot of targeted investments.
Hurun rich-list founder Rupert Hoogewerf visited the recent 10th Arab-China Conference in Riyadh and explains why China's economic interests are moving in the direction of the Arab world: new energy, building infrastructure, and rapid industrialization, he tells at Arab News.
Arab News:
He said Chinese investors appeared keen on exploring the region’s markets, particularly Saudi Arabia. With the emergence of new sectors such as renewable energy, fast-growing real estate, and rapid industrialization in the region, there are huge opportunities for Chinese entrepreneurs, he added.
Hoogerwerf said China has a large number of “young companies that are innovative” and are interested in entering the Saudi market.
He said cheap energy prices make setting up bases in the Kingdom a lucrative proposition for manufacturing companies. “And of course, there is a lot of ambition to construct new infrastructure here,” he added.
The researcher said Chinese companies have the required expertise and willingness to drive growth in the region, particularly Saudi Arabia.
He said he brought two Chinese companies with him to explore the Saudi market and launch operations in the Kingdom. One of the companies is a top manufacturer of solar panels, Hoogerwerf told Arab News. He said the company is in talks with Saudi partners to start manufacturing operations here as the Kingdom is also making efforts to transition from traditional to renewable and sustainable energy sources.
The other company, he said, is a real estate giant and visiting the Kingdom for the first time.
Rupert Hoogewerf is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers’ request form.
So why aren’t such deals happening? I argue it is mostly not because of any of the commonly cited reasons, such as language barriers (both Saudis and Chinese speak English), inconvenient flights or visas, security issues (such as Yemen), or a lack of opportunities.
My experience has been that it is a lack of trust and necessity. Private deals are face-to-face, relationship-based and long-term. And Chinese and Saudi business people just don’t trust each other very much. There is no history of working together. There are few close friendships. There is no history of going to university together. And the deals thus far have been prone to problems. There just isn’t a lot of trust or comfort. And when you are operating in environments without clear rule of law and easily enforceable contracts(such as in both China and Saudi), you rely on close relationships far more.
The other problem is necessity .There actually is no need to do private China-KSA deals. Chinese companies can make investments in lots of places. And Saudis can continue to work with Western companies, just like they have for decades. China-Africa have the same trust issues but the deals happen because there is a real need for resources. China-Germany deals happen because there is a need for technology (by China) and market access (for Germany). But there is no such need for KSA and China. And absent a compelling need, the lack of trust is not overcome.
So the Chinese and Saudi groups meet, drink tea, take photos and express interest in working together. Maybe they even sign an MOU. But then, outside of basic trade, not much happens. Ultimately, nobody writes big checks or makes long-term commitments. So we have not and I do not think we are going to see hundreds of private deals between Saudi and Chinese private companies in the near future.
