Global Window of Opportunity – The Middle East: A Promising Avenue for Chinese Enterprises and High Net Worth Families Who Seek Local Corporate Partnerships Beyond Fleeting Government Initiatives

Photos of “Family Businesses Future Leaders Innovation Investment” Luncheon in Beijing

Recently, the Hong Kong Ambassadors Club and the family office Tsangs Group have co-hosted Beijing luncheon “Family Businesses Future Leaders Innovation Investment,” supported by the Hong Kong SAR Government Department’s Invest Hong Kong (“InvestHK”) FamilyOfficeHK team. The event has attracted over 30 young leaders, who either have inherited their family enterprises or provide advisory services to the Ultra High-Net-worth (UHNWs) families.

While the informative sharing by the representatives of government departments including InvestHK and the Beijing Office of the Government of the HKSAR of the People’s Republic of China, where the Top Talent Pass Schemes (the “TTPS”) for foreign top talents to softland in Hong Kong were heavily promoted, the young wealth owners were having something more in their minds.

Photo of “Family Businesses Future Leaders Innovation Investment” Luncheon in Beijing

Chinese Entrepreneurs Eyeing Global Opportunities

Following the recent meeting of the Political Bureau of the Central Committee, which concluded with an emphasis on supporting private enterprises to reinvigorate the economy, and with the fading influence of the Beidaihe Meeting (aka. 北戴河会议) where former party leaders, who are considered more economically driven, mentored and advised current top leaders on overall directions and major policy issues at the national level, Chinese enterprises are feeling uncertain about the short-term recovery of market confidence by global businesses and investors. There is a keen interest among Chinese businesses to explore new markets.

Photo credit: RFI

Though recent financial developments like the situation with Zhongrong International Trust have prompted discussions. The chain reaction of the collapse of housing markets and the real estate development industries in China has sparked a serious hold-back for private companies and Chinese (and global) investors to bet further private capital in the China market in the short term. It is evident that a forward-thinking strategy is on the horizon for private companies and investors who are seeking fresh avenues outside the Mainland, which align with their economic, geopolitical, and cultural aspirations.

Middle East as the Next Frontier – Expand, Grow, and Collaborate

Given the dynamic domestic market in Mainland China, many Chinese entrepreneurs, tech venture capitals and family offices are actively exploring “go-overseas” strategies (aka. 出海). While Southeast Asia remains attractive with thriving hubs like Bangkok, Kuala Lumpur, and Singapore, a growing number is setting their sights on the Middle East. Cities such as Dubai, Abu Dhabi, and Manama of Bahrain are emerging as promising financial hubs and technological oasis, drawing Chinese tech billionaires. The supportive entrepreneurial ecosystem in countries like the UAE and Saudi Arabia, backed by sovereign funds, offers immense opportunities in Free Zones.

Photo credit: CNBC

As the Chinese Government celebrates the 10th anniversary of the “Belt and Road” initiative introduced by President Xi Jinping in 2014, the market force with the pressure of Sino-US geopolitics has naturally encouraged Chinese entrepreneurs and business families to strategise for future expansions in the Middle East.

Regarding exit strategies, while in the past Chinese enterprises often looked to go public in New York or Hong Kong, changing global dynamics are reshaping this trend. Following the global decrease in IPO activities in the first half of 2023, Hong Kong, being a desirable IPO destination, is simultaneously affected in terms of daily trading volume, liquidity, and global investor dynamics. While the Chinese enterprises are being aware of the potential sanction risks by the US or the concern of approval by the China Securities Regulatory Commission（中国证券监督管理委员会）, there is a visible shift towards collaborations with local conglomerates in the Middle East. Chinese brands might emerge as notable foreign trademarks in the region, many potentially partnering with local Emirati families or global investors with strong regional ties.

Photo of Signing the MoU with Ministry of Investment in Saudi Arabic

To cope with the current challenges, the Hong Kong Ambassadors Club (the “HKAC”) takes on the “Lion Rock Spirit” to turn the situation into opportunity. The public-private collaboration platform is working closely with regional strategic partners in the Middle East to strengthen and deepen business pipelines and investment programs where more Mainland Chinese and Hong Kong entrepreneurs and investors could continue to balance the risk and strike for a fair benefits through Hong Kong-UAE relations.

Meeting with H.E. Ahmed Abdullah Ibrahim Al Mansoor, Chairman of Al Mansoor Enterprises

As the HKAC is setting forth the next business delegation to Saudi Arabia and the UAE, we welcome interested parties to reach out and collaborate with us to maintain the active business and investment vibrancy of Hong Kong.