Chinese companies look to Qatar as Middle East entry point, alternative to fickle West

WORLD  23 May 2024 - 05:26

South China Morning Post has published an article saying with the Middle East and Africa emerging as prime investment destinations, Chinese companies are considering Qatar as an entry point to the regions. Caliber.Az reprints the article.

Doha will be the “first stop” for many Chinese firms as they seek to tap markets in the Middle East or Africa, according to the head of the Qatar Science and Technology Park – a prediction keeping with Chinese investment trends, as capital gravitates away from tightly scrutinised Western markets and closer to emerging regions.

In the three months since Hongkonger Jack Lau took the helm at the park – Qatar’s premier incubator for up-and-coming science and technology businesses – more than 20 Chinese companies have expressed interest in joining. Electric vehicle producer Davinci Motor signed a letter of intent to set up a research and development centre at the park last week.

The Chinese manufacturer said it intends to collaborate with the park to develop smart mobility technologies, and is “keen to help support” Qatar in its sustainability efforts.

“The change of systems [from one place to another] involves a lot of fundamental work on research and development,” Lau told the Post in an interview at his office.

“There’s a lot of testing in engineering and analysing various sets of data. Businesses don’t know what they don’t know, so there’s a need for them to stay in a place to develop R&D work and learn the market’s demands.”

A former adjunct professor at the Hong Kong University of Science and Technology, Lau said he is bridging differences of understanding between Chinese companies and the Qatari government, as firms from China often come to Doha only looking for markets to sell their products or clients to finance projects.

He said the Persian Gulf nation can pool talent from all over the Middle East – and as far away as Russia – to develop scientific ideas with technologies that can improve global quality of life, citing the wider availability of electricity in Africa as an example.

“Qatar is a big garage for companies,” he added. “But firms must eye the world market from here, because a place with only 2.3 million people is not worth investing in [on its own].”

On the day the letter of intent was signed with Davinci Motor, Lau led a delegation from east China’s Jiangsu province to tour the park in Doha and learn about the incubator’s role in the growth of its constituent firms.

The park, founded in 2009, has 45 member companies headquartered in France, the United States, Turkey and Spain. It is funded by Qatar Foundation, a state-led non-profit organisation.

Figures from the government’s investment promotion agency Invest Qatar showed that 265 Chinese companies have been registered in the country to date, compared to more than 900 companies from the US.

Foreign direct investment flows from China increased to US$157 million in 2022 from US$1.4 million in 2014, according to Qatari data, while the US$13 billion in investments from the US in 2022 accounted for almost 44 per cent of total FDI project value that year.

Ali Alwaleed AI-Thani, chief executive officer of Invest Qatar, said in a small group interview on the sidelines of the 2024 Qatar Economic Forum that his country “is the most attractive destination” for investors within the Middle East and North Africa.

“If you look at models like Singapore or Ireland, these countries are a magnet to attract and retain talent,” he added.

“We can offer more bespoke services [that] we’re looking to partner with businesses, looking at avenues for growth.”

AI-Thani said that sectors related to “resiliency” – such as food security, water security, manufacturing, logistics, technology and artificial intelligence – are the main areas to allocate human resources and drive economic development.

Caliber.Az