Extending Hajj Visas Boosts Economic Diversification, Stimulates Tourism

Hundreds of thousands of pilgrims flock to the Jamaraat Bridge during the last Hajj season (EPA)
Hundreds of thousands of pilgrims flock to the Jamaraat Bridge during the last Hajj season (EPA)
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Extending Hajj Visas Boosts Economic Diversification, Stimulates Tourism

Hundreds of thousands of pilgrims flock to the Jamaraat Bridge during the last Hajj season (EPA)
Hundreds of thousands of pilgrims flock to the Jamaraat Bridge during the last Hajj season (EPA)

Saudi Arabia’s decision to extend the Hajj visa to three months will enhance the Kingdom’s efforts to diversify the economy, increase new job opportunities, stimulate foreign investment indirectly, as well as reduce pressure on Jeddah Airport, officials and experts told Asharq Al-Awsat.

Member of the Saudi Shura Council Fadl bin Saad Al-Buainain noted that the pilgrim’s comprehensive experience goes beyond performing the rituals of Hajj and Umrah, to moving between the cities of the Kingdom and visiting tourist and heritage sites, which would strengthen the tourism sector and reflect positively on commercial activities and the overall economy.

Al-Buainain stressed that these visits will provide an important marketing and media channel, and will enhance cultural communication and consolidate human relations.

“There is an important aspect in extending residence and allowing travel from any of the Kingdom’s airports. This will contribute to reducing the human flow departing from Jeddah Airport, and revitalizing the airports of other cities,” he stated.

But the economic impact may not be visible in the short term, according to Al Buainain.

The Saudi official added that the decision would have positive repercussions in the medium term, and provide greater support for achieving the objectives of diversifying the sources of the economy, increasing consumer spending, and pumping more investments in the tourism and commercial sectors.

For his part, the CEO of Thakher Development Company, Eng. Abdulaziz Al-Aboudi, noted that the government decisions would stimulate the hospitality sector in Makkah Al-Mukarramah and achieve a qualitative positive shift.

“The hotel occupancy rate in Makkah Al-Mukarramah during the Hajj season 2023 reached 100 percent, compared to 80 percent during Ramadan, and 60 percent during the same period in 2022,” he told Asharq Al-Awsat.

Al-Aboudi revealed that the hospitality and real estate sectors in Makkah recorded a strong performance during the Hajj season this year, driven by a number of factors, including the high occupancy rate in hotels.

Dr. Abdel-Rahman Baeshen, head of the Al-Shorouk Center for Economic Studies, said that Saudi Arabia has adopted a strategy of maximizing the material returns from the Hajj and Umrah, within a plan to diversify the economy.

He added that extending the Hajj visa would increase the revenues of the tourism sector in general, and stimulate recovery and growth.

For his part, professor of international commercial law at the Institute of Management in Riyadh Dr. Osama Al-Obaidi said: “Extending the Hajj visa for a period of three months will have positive results on the Saudi economy, by enriching and deepening the experience of pilgrims and preparing various tourist sites to receive visitors.”

Tourism currently contributes about $12 billion to the Saudi gross domestic product, Al-Obaidi told Asharq Al-Awsat, noting that the recent government decision would help raise this amount to $20 billion in 2030, reflecting positively on the policy of diversifying the national economy.



Tesla, Chips, and Banks Tumble as China’s Retaliation Stokes Fears of Widening Trade War

Tesla’s logo on a building of the Tesla Gigafactory in Gruenheide, near Berlin, Germany, 03 April 2025. (EPA)
Tesla’s logo on a building of the Tesla Gigafactory in Gruenheide, near Berlin, Germany, 03 April 2025. (EPA)
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Tesla, Chips, and Banks Tumble as China’s Retaliation Stokes Fears of Widening Trade War

Tesla’s logo on a building of the Tesla Gigafactory in Gruenheide, near Berlin, Germany, 03 April 2025. (EPA)
Tesla’s logo on a building of the Tesla Gigafactory in Gruenheide, near Berlin, Germany, 03 April 2025. (EPA)

US chip companies, banks and oil majors fell sharply on Friday after China retaliated to Trump's tariffs with steep duties, in an intensifying trade war between the world's two largest economies that cast a shadow on global growth.

China slapped additional duties of 34% on US goods, set to go into effect April 10. It also announced curbs on exports of some rare-earths and added several US firms to its export control list and the "unreliable entities" list, which allows Beijing to take punitive action.

The action followed US President Donald Trump's 34% duties on imports from China announced on Wednesday, which triggered a massive market meltdown on Thursday. The latest levies were on top of the 20% tariffs on China imposed earlier this year.

Investors were already fretting over potential supply chain disruptions, price hikes and demand destruction for everything from cars and smartphones to sneakers.

Shares of Tesla and Apple - among consumer tech companies with a large exposure to China - were down 8% and 4%, respectively. While both companies have local production in China, duties on US-imported parts could squeeze margins and force price hikes.

"Several tech companies have established local supply chains in China. Most source components from China already, and hence, disruptions should be controllable, though we do expect price hikes on parts and components not being sourced from China," said Nishant Udupa, practice director at research firm Everest Group.

For Tesla, already in a bruising price war with local Chinese rivals, raising prices would pressure demand further.

"Apple's smartphone sales had already been declining in China for some time, faced with growing, cheaper competition. So, the prospect of steep import duties being imposed is likely to sharply erode sales even further," said Susannah Streeter, head of money and markets at Hargreaves Lansdown.

Shares of Alphabet, Microsoft and Amazon.com were subdued as they had limited exposure to China.

GE Healthcare's stock slid nearly 13%, following China's export controls on a rare-earth metal that is used in MRI scans. The country's announcement of an anti-dumping investigation into imports of certain medical CT tubes from the US and India added to the worries.

SEMICONDUCTORS

Chip companies are set to face headwinds, too, although US exports a much smaller amount of electronic equipment to China. Shares of Intel, Applied Materials and Qualcomm, all of which count on China for at least 30% of revenue, were down 5% to 8%.

The US exported more than $15 billion worth of electrical and electronic equipment to China in 2024, with most of the value coming from integrated circuits, transistors and other semiconductor devices, according to economic data provider Trading Economics. In comparison, the U.S. imported more than $127 billion in electronic equipment from China last year.

"Semiconductors will feel a greater impact ... We're already witnessing a domestic ecosystem evolve in China, with direct alternatives for every major US semiconductor firm. This trend is likely to accelerate," Udupa said.

NATURAL RESOURCES

Crude prices, already under pressure from an expected OPEC+ oil output hike in May, added to the losses.

Oil majors Exxon and Chevron fell more than 5%. Top oilfield service company SLB dropped 10%, and the biggest US refiner by volume, Marathon Petroleum, fell 6%. Chemicals company DuPont slid 12%.

"The trade war escalated, recession fears rise and consequently oil demand growth is to take a sizeable hit," said Tamas Varga, analyst at PVM.

China is also the largest market for US agricultural products, even as imports of US farm goods dropped last year.

Shares of top grain traders like Archer-Daniels-Midland fell 8% while Bunge was down 6%. Fertilizer firms Mosaic and CF Industries fell 10% and 8%, respectively.

China's tariffs on US soybean exports would increase the cost to local customers, especially animal feed producers, and could prompt the country to source more from Brazil and Argentina, said Morningstar analyst Seth Goldstein.

BANKS

Banks' shares extended their declines from Thursday. The industry has been clouded by fears that a trade dispute could temper consumer confidence, reduce spending, weaken loan demand and pressure fees from advising on deals.

JPMorgan Chase, the biggest US bank by assets, sank 7%. Wall Street titans Goldman Sachs and Morgan Stanley dropped more than 7% each.

MACHINERY

Heavy machinery makers Caterpillar and Deere fell 5% and 4%, respectively, on concerns over demand from one of their largest overseas markets.

China is a major buyer of construction and agricultural equipment and a key player in global infrastructure spending.

RETAIL

Shares of major luxury and footwear firms reversed coursed after Trump said Vietnam's leader To Lam has offered to reduce tariffs on US imports. Ralph Lauren's shares were up 2.5%, while Tapestry rose as much as 3.6%.

Nike gained 4%, Roger Federer-backed On jumped 7.2% and Lululemon Athletica rose 3%. The stocks had initially fallen after retaliatory tariffs by China, a major revenue contributor.