Chinese companies are increasingly targeting the Middle East to diversify their markets amid rising trade tensions with the US.

Notable firms, such as Hong Kong-based logistics operator NEXX Global and Beijing’s franchise platform Tojoy, are seeking to establish a presence in the region.

Hong Kong-based NEXX Global is set to partner with a Qatari logistics company and KEC, previously known as Kerry Logistics, to enhance logistics across the six Gulf Cooperation Council (GCC) countries.

The logistics deal will see the Qatari company handle deliveries, KEC focus on business growth, and NEXX provide its AI tech, NEXXBot.

This move is part of China’s wider strategy to use the Gulf as a hub to reach African and European markets.

🔗 Source: South China Morning Post

🧠 Food for thought

1️⃣ China’s strategic pivot to MENA represents a larger economic hedging strategy

Chinese companies are increasingly looking to the Middle East not just for short-term business, but as part of a strategic shift in China’s global investment patterns amid geopolitical tensions with the US.

While China’s global investments fell by approximately $100 billion in 2018, the Middle East and North Africa region was the only area to see an increase, becoming the second-largest recipient of Chinese investment worldwide 1.

This shift extends beyond traditional energy relationships, with significant investments in digital infrastructure evident in Saudi Arabia’s Neom smart city project (where Huawei is building a 1,300 MWh energy storage system) and the UAE’s $10 billion technology investment fund with China 2.

The trend has accelerated recently, with the GCC becoming a crucial part of China’s Belt and Road Initiative as both sides seek economic diversification and technological modernization, creating mutual benefits beyond simple trade relationships 3.

Chinese companies like NEXX Global are using their Middle Eastern partnerships to access not just local markets but also as gateways to Europe and Africa, aligning with China’s broader approach of building regional hubs within its global network.

2️⃣ The GCC is emerging as a strategic logistics hub in China’s global expansion network

Chinese investment in Middle Eastern logistics infrastructure is creating a new network of distribution centers that serve as crucial nodes in China’s international trade architecture.

The UAE has established itself as a primary logistics hub for Chinese goods, hosting over 200,000 Chinese nationals and functioning as an integral component of China’s Belt and Road Initiative 4.