Nearly 90 per cent of Chinese firms plan to expand in the Middle East, PwC reports, with Saudi Arabia and the UAE emerging as top destinations.
Rising profitability and diversification into tech, renewables and AI are reshaping the region’s investment landscape.
The PwC survey of 136 Chinese firms reports, enterprises are expanding steadily into the Middle East market with heightened confidence, amid rising profitability, stronger financial performance, and more sophisticated strategies that are reshaping the regional investment landscape.
Chinese firms eyes Middle East expansion
Findings show that 44 per cent have formalised business plans, a sharp rise since 2022. Profitability has improved significantly: 40 per cent of enterprises now report positive returns, while the share of loss-making firms has fallen to 15 per cent.
More than 60 per cent of respondents expressed satisfaction with their investments, underlining the Middle East’s growing importance in Chinese business strategy.
Instead of relying on representative offices, 77 per cent of firms now operate through full entities serving local markets. This marks a decisive transition from “testing the waters” to building long-term value in the region.
Saudi Arabia and the UAE stand out as the top destinations, attracting 84 per cent and 79 per cent of surveyed companies respectively, followed by Egypt. Saudi Arabia’s rapid transformation and scale make it a leading choice for future expansion over the next three to five years, while the UAE remains a hub for diversification and regional investment.
At the same time, Chinese enterprises are diversifying into high-growth sectors such as digital technologies, renewable energy, artificial intelligence and biopharmaceuticals.
These align with both the Gulf’s diversification plans and China’s global innovation agenda.
The survey also highlighted policy expectations. Seventy-two per cent of firms want tax incentives beyond free zones, while 74 per cent called for greater transparency, stability and efficiency in regulations.
Investors see governance frameworks as critical to enabling sustainable growth.
Linda Cai, Inbound/Outbound Leader, PwC China, said: “Chinese enterprises are no longer treating the Middle East as an exploratory market – it has become a strategic hub for global growth.
“With rising profitability, stronger policy support, and expanding opportunities beyond traditional sectors, Chinese investors are shaping the next chapter of economic collaboration in the region.”
Rami Nazer, Clients and Markets Leader, PwC Middle East, and PwC EMEA Government and Public Sector Leader, said: “The Middle East is entering a transformative era, marked by diversification, innovation and stronger global integration. The deepening commitment of Chinese companies signals a new phase in this economic transformation.
“By bringing expertise, investment, and long-term partnerships, Chinese enterprises are contributing to the region’s sustainable growth and prosperity.”
As the Middle East accelerates its economic transformation and strengthens its role in China’s Belt and Road Initiative, PwC’s survey confirms a strong trajectory of growth, opportunity and collaboration between the two regions.
