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GCC Projects Market Report Reveals Five-Year Peak in Awarding Rate

Project awards in Gulf countries are likely to double with signs of détente in the Corona pandemic (Asharq Al-Awsat)
Project awards in Gulf countries are likely to double with signs of détente in the Corona pandemic (Asharq Al-Awsat)
    Riyadh, Kuwait - Asharq Al-Awsat
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GCC Projects Market Report Reveals Five-Year Peak in Awarding Rate

Project awards in Gulf countries are likely to double with signs of détente in the Corona pandemic (Asharq Al-Awsat)
Project awards in Gulf countries are likely to double with signs of détente in the Corona pandemic (Asharq Al-Awsat)

New data revealed a remarkable recovery in the projects market of Gulf Cooperation Council states during Q1 2021. This was traced back to the value input of awarded projects on a quarterly basis doubling.

“After witnessing declines over the last several quarters, the GCC project market showed healthy recovery during Q1-2021 with value of projects awarded more than doubling q-o-q to $ 26.3 Billion,” said a report by Kamco Invest.

“This was mainly led by pending project awards from last year, in addition to efforts by governments in the region to vaccinate the bulk of the population and limit the spread of the Covid-19 that affected economic activity across the globe,” it added.

Citing Bloomberg, Kamco said that 26.5 million doses have been administered with at least the first dose of the vaccine in the GCC out of a total population of 54 million residents.”

According to Bloomberg estimates, median Brent crude oil forecast is expected to remain comfortably above the $60 per barrel mark over the next five years.

The report coincides with most Gulf countries starting to practically ease or completely lift some of the restrictions instated to curb the spread of the coronavirus.

Moreover, it revealed that the value of projects planned and under execution in the GCC has remained around the $ 1.7 Trillion mark since 2017.

However, at the country level, the UAE has seen its share decline consistently over the years whereas Saudi Arabia has seen an increasing share especially post the announcement of big-ticket projects.

The two markets have accounted for more than 84% of the total market over the last two years.

Total value of project planned and under execution stood at $86.1 Billion at the end of 2015 that increased to $ 91.6 Billion at the start of May 2021.

In terms of quarterly data on project awards, the GCC region witnessed the normal seasonal spike during Q1-2021 with project awards worth $26.3 Billion, more than double the contract awards during Q4-2020 that stood at $12.8 Billion.

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China Eyes Electric Vehicle Manufacturing Opportunities in Saudi Arabia

Chinese ambassador to Saudi Arabia (Asharq Al-Awsat)
Chinese ambassador to Saudi Arabia (Asharq Al-Awsat)
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China Eyes Electric Vehicle Manufacturing Opportunities in Saudi Arabia

Chinese ambassador to Saudi Arabia (Asharq Al-Awsat)
Chinese ambassador to Saudi Arabia (Asharq Al-Awsat)

China’s ambassador to Saudi Arabia, Chang Hua, expressed Beijing’s hopes to strengthen its partnership with the kingdom, especially in electric vehicle production and other industries.
Speaking to Asharq Al-Awsat, Hua condemned violations of Lebanon’s sovereignty and the targeting of civilians.
He called for immediate action to reduce tensions and prevent further escalation in the region.
“China is deeply shocked by the high civilian casualties from the conflict between Israel and Lebanon,” Hua said, urging the international community to work on calming the situation.
He emphasized that, no matter how things unfold, “China will always stand for justice and remain committed to peace and stability in the Middle East. We are ready to work with all parties to promote peace in the region.”
China’s Economic Growth
Hua highlighted China’s rise from a $30 billion economy to a $17.8 trillion one, making it the world’s second-largest economy and a leader in trade and industry.
He reiterated China’s goal to maintain high-level openness, push for high-quality economic development, and promote a multipolar world with fair global governance and inclusive economic globalization.
Saudi-China Relations
Hua described the partnership between Saudi Arabia and China as entering a new phase of deep development, congratulating Saudi Arabia on its 94th National Day.
He noted that Chinese Premier Li Qiang’s recent visit to Saudi Arabia has boosted bilateral relations and strengthened the comprehensive strategic partnership, driving it towards a more stable and prosperous future.
The ambassador stressed the need to expand trade and investment between the two countries and highlighted the upcoming “Saudi-Chinese Cultural Year 2025” as a key event.
Hua also pointed out that Saudi Crown Prince Mohammed bin Salman values the strong and historic relationship between the two nations.
The Crown Prince looks forward to further aligning Saudi Vision 2030 with China’s Belt and Road Initiative, expanding cooperation in energy, investment, and culture.
Hua noted that China is Saudi Arabia’s largest trading partner, with bilateral trade exceeding $100 billion in the past two years. He also mentioned the recent currency swap agreement between the two countries, which has helped boost trade and investment.
New Developments in Saudi-China Relations
According to Hua, the cooperation between the two nations has grown significantly, particularly in the automotive, renewable energy, and tourism sectors.
In 2023, Saudi imports of Chinese cars reached $4.12 billion, driven by companies like Changan, Geely, MG, Chery, Great Wall, Hongqi, GAC, and BYD, which have opened branches in the kingdom.
Discussions are ongoing about building local manufacturing plants. China exported 4.91 million vehicles in 2023, making it the largest car exporter globally for the first time, including 1.203 million electric vehicles, a 77.6% increase from the previous year.
Hua noted that Saudi Vision 2030 aims for electric vehicles to account for at least 30% of all cars in Riyadh by 2030, and he expressed optimism about enhancing collaboration in automotive manufacturing.
Chinese companies are also increasingly involved in Saudi Arabia’s renewable energy sector. They are working on multiple solar projects, including the Al Shuaibah photovoltaic plant, the largest of its kind in the world, with a capacity of 2.6 gigawatts.
In July 2023, the Renewable Energy Localization Company (RELC), backed by the Saudi Public Investment Fund, signed agreements with three Chinese firms—Envision Technology Group, Jinko Solar, and TCL Zhonghuan—to establish joint ventures for high-efficiency solar cell production in Saudi Arabia.
These projects will focus on producing solar components, helping Saudi Arabia achieve its goal of sourcing 75% of renewable energy project components locally by 2030.
Hua also highlighted the increasing exchange of visits between citizens of both countries. In September 2023, China and Saudi Arabia signed a memorandum of understanding to facilitate group tourism, making the kingdom an official destination for Chinese tour groups.
Several Chinese travel agencies have begun offering packages to Saudi Arabia, and direct flights between the two countries are increasing. Saudi Airlines has expanded its routes, operating numerous weekly flights between Beijing, Shanghai, Shenzhen, Riyadh, and Jeddah.