There has been a series of agreements signed for projects across the region with Chinese companies this month.
In Egypt, China is expected to invest up to $11.2bn to develop Egypts new administrative capital near Cairo, as well as a railway linking Cairos Salam City.
In Iran, Chinas Citic Group Corporation has signed a memorandum of understanding (MoU) for lines of credit worth $10bn with Iranian banks. The funding will be used for projects across a variety of sectors including energy, natural environment, transportation and the management of water resources.
And in the UAE, local developer Union Properties has signed a MoU with Beijing-based China State Construction Engineering Corporation for the construction of a $2.2bn masterplanned development with 44 towers at Motorcity in Dubai.
Also in Dubai, Ningxia Forward Fund Management Company signed a $408m agreement for the development of industrial space at Dubai Food Park.
The agreements are the latest sign that China and Chinese companies will play an increasingly active role in the development of the region. Over the past few years Beijing has been promoting its One Belt One Road initiative that aims to extend Chinas reach across the road. While the initial investments were targeted at countries that border China such as Pakistan, these most recent agreements indicate that the Middle East is set to benefit from Beijings growing interest in international markets.
The timing could not be better. Since late 2014, the region – particularly the oil exporters of the GCC – has faced a sharp funding gap as reduced revenues from oil sales has hampered states ability to finance project directly themselves.
The agreements signed this month indicate that Chinese investors are keen to step into the void. Governments across the region looking to attract more foreign direct investment (FDI) and develop more than $92bn of projects on a public-private partnership basis, then there will be plenty of opportunities for Chinese investors to consider in the future.