Which new industries are driving China-Middle East trade?

Our new Corridors in Focus series examines trade along high-priority corridors connecting our dynamic markets

Briefing 1: China-Middle East 

June 23, 2025

7 mins

Corporate & investment bankingIndustriesInfrastructure & Energy

With Middle Eastern markets looking to diversify their economies, and mainland Chinese companies seeking overseas expansion, the economic relationship between China and the Middle East remains as vital as ever.

While the trade corridor dates to the cultural and economic development fostered by the Silk Road, the relationship has rarely seemed more relevant – especially given recent uncertainty over US trade policy.

The corridor’s importance is underpinned by its recent growth. The overall trade between China and the Middle East reached USD507 billion in 2022, a significant increase from USD250 billion in 2012. However, while the trade route has been typified by investment projects such as energy, ports and construction, a new wave of investment fuelled by Chinese companies in new sectors is helping the corridor hit new highs.

Beyond oil and construction

Oil is a crucial export for the Middle East, so there is no surprise that it’s traditionally been key for the China-Middle East corridor. In 2022, for example, more than 50% of China’s crude oil imports came via the Middle East. 

Meanwhile, construction has been a key source of investment to the Middle East from China, supported by China’s Belt and Road Initiative (BRI). This global development strategy has seen China pledging to invest in infrastructure and urban development in hundreds of markets, including Indonesia, Saudi Arabia and Kazakhstan – which had the most investment last year, fueling trade across the BRI. In 2024, China invested USD39 billion in construction contracts in the Middle East, underscoring the region’s importance.

However, in recent years, sectors not traditionally associated with the China-Middle East corridor have grown in significance. This trend has partially been driven by initiatives such as Saudi Arabia’s Vision 2030 – a long-term plan to reallocate oil wealth to new sectors, and UAE Centennial 2071, a framework prioritising economic transformation, particularly in the IT sector.

Industries beyond oil and construction – such as renewable energy, technology and e-commerce – are helping the corridor grow, with markets such as the UAE a prime beneficiary.

From renewable energy to technology, partnerships are flourishing

There has been growing interest in China from Gulf-based sovereign wealth funds, increasing economic co-operation and driving growth. While just USD100 million was invested in China in 2022, the figure for 2023 stood at USD2.3 billion, with many of these funds looking to the tech space. EW Partners, for example, is aligned with several technology firms in the region including Alibaba Cloud under Alibaba Group, J&T Express and Leshines, the supply chain solutions arm of Lenovo. 

The partnerships mark a general trend of co-operation in technology across the corridor with the development of bespoke artificial intelligence models helping Chinese cloud computing firms gain a stronger foothold in Middle Eastern markets, previously the preserve of US companies. 

“Chinese technology firms are increasingly looking to the Middle East as an area where they can gain traction. There is a strong demand for AI models suited to regional needs and Chinese companies have taken note,” says Lu Shi, Head of Coverage, China, Standard Chartered.

Additionally, there has been a surge in co-operation in renewable energy, with Chinese exports driving Middle Eastern growth. Saudi Arabia, for example, has seen a massive increase in solar panel imports due to a number of large-scale regional projects. More broadly, Chinese companies have participated in green projects worth an estimated USD9.5 billion between 2018 and 2023 across the Middle East, mainly in the UAE and Saudi Arabia.

Standard Chartered has been actively involved in similar projects, helping to finance renewable energy in the market, supporting the USD400 million development of a 500MW photovoltaic power plant in Oman announced in 2020. The plant, which has solar modules supplied by Chinese companies, is expected to provide electricity to 33,000 local households and reduce CO2 emissions by 340,000 tonnes per year when finally complete.

In the e-commerce and goods space, Chinese enterprises are monitoring consumer trends across the Middle East, with the beauty sector proving to be particularly attractive. According to a recent BeautyMatter report, the personal care market in the Middle East was worth USD46 billion in 2024, and is projected to grow to USD60 billion by 2025. Chinese retail platforms and beauty companies are taking note. Florasis is one of many Chinese cosmetic brands that has gained traction in the Middle East in the past few years.

Looking ahead: an avenue for prosperity

Fuelled by new markets and underpinned by the stalwart sectors that have dominated the modern trade relationship between the Middle East and China, the trade corridor looks robust.

China has solidified its status as the top trading partner for the Gulf Cooperation Council (GCC) nations, which include Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE. Dominating both commodity trade volume and export indices, the GCC’s trade with China soared to USD297.9 billion in 2023. This figure is almost double the trade volume with India, the second-largest trading partner, which stood at USD150.4 billion.

“The China-Middle East corridor is emerging as a powerful engine of trade, investment, and knowledge exchange across Asia, Africa, and the Middle East. As partnerships deepen and trade volumes grow, the corridor is set to become a major driver of global growth and opportunity. It will support job creation, foster innovation, and contribute to long-term sustainable economic prosperity,” says Rola Abu Manneh, CEO, UAE, Middle East, and Pakistan, Standard Chartered.