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Saudi Industrial Investments Rise by 54% Following Exemption from Financial Fees

A factory in Saudi Arabia. (SPA)
A factory in Saudi Arabia. (SPA)
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Saudi Industrial Investments Rise by 54% Following Exemption from Financial Fees

A factory in Saudi Arabia. (SPA)
A factory in Saudi Arabia. (SPA)

The Federation of Saudi Chambers announced that industrial investments in the Kingdom have increased by 54%, reaching around SAR 1.5 trillion. This surge follows a 2019 government decision to exempt the industrial sector from financial fees.

A report by the Federation assessed the economic impact of the government's decision to bear the financial fees for the industrial sector from 2019 until the end of 2025. The study used a comprehensive approach, measuring the decision’s impact based on seven economic indicators: contribution to GDP, the number of industrial establishments, investment volume, employment, non-oil exports, the quality of national products, and foreign investments in the sector.

According to the report, economic data and indicators confirm the positive effects of the exemption on the national economy overall, and the industrial sector in particular.

The sector’s GDP contribution rose from SAR 392 billion in 2019 to SAR 592 billion in 2023, accounting for 14.7% of GDP. The number of industrial establishments grew from 7,625 in 2019 to 11,868 by 2024, a growth rate of 55.6%. Additionally, investments in the sector increased by 54%, reaching approximately SAR 1.5 trillion compared to SAR 992 billion previously.

The report highlighted that foreign investments in the industrial sector have grown, thanks to the decision to bear financial fees. The number of foreign factories increased from 622 to 1,067, reflecting a growth rate of 71.5%. The capital invested in the sector grew from SAR 43 billion to SAR 93 billion, a growth rate of 116.2%.

By the end of the first quarter of 2024, the number of workers in the industrial sector reached around 1.2 million, including 358,000 Saudis, with a localization rate of about 28%. Saudi workers in the industrial sector represent around 12.9% of the total Saudis employed in the private sector.

The industrial sector became the largest contributor to creating jobs for Saudis during the period from Jan. 1, 2023, to March 31, 2024, with the number of nationals increasing by 59%, adding more than 82,000 jobs.

The report also noted that the industrial sector helped boost non-oil exports, which reached an estimated SAR 208 billion, achieving a 12% growth.

Additionally, the report explained that the decision contributed to improving the quality of national products, through the adoption of new business models by industrial establishments, the localization of the latest technologies in manufacturing, the attraction of skilled talent, and the increase in product offerings to meet local market demands.

These efforts resulted in a rise in the percentage of industrial product exports, increased domestic demand for local products, and a higher number of products receiving the Saudi Quality Mark from the Saudi Standards, Metrology, and Quality Organization.

In September 2019, the government issued a decision to bear the financial fees imposed on expatriate workers in industrial establishments. The decision was recently extended until the end of 2025. Over 8,000 industrial establishments have benefited from the move, with the estimated cost of expatriate labor fees on the industrial sector amounting to around SAR 5 billion.

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China Exempts Some Goods from US Tariffs to Limit trade War Pain

TOPSHOT - An aerial view shows cargo containers stacked at a port in Shanghai on April 20, 2025. (Photo by AFP) / China OUT
TOPSHOT - An aerial view shows cargo containers stacked at a port in Shanghai on April 20, 2025. (Photo by AFP) / China OUT
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China Exempts Some Goods from US Tariffs to Limit trade War Pain

TOPSHOT - An aerial view shows cargo containers stacked at a port in Shanghai on April 20, 2025. (Photo by AFP) / China OUT
TOPSHOT - An aerial view shows cargo containers stacked at a port in Shanghai on April 20, 2025. (Photo by AFP) / China OUT

China has exempted some US imports from its 125% tariffs and is asking firms to identify critical goods they need levy-free, according to businesses notified, in the clearest sign yet of Beijing's concerns about the trade war's economic fallout.

The dispensation, which follows de-escalatory statements from Washington, signals that the world's two largest economies were prepared to rein in their conflict, which had frozen much of the trade between them, raising fears of a global recession.

Beijing's exemptions - which business groups hope would extend to dozens of industries - pushed the US dollar up slightly and lifted equity markets in Hong Kong and Japan.

“As a quid-pro-quo move, it could provide a potential way to de-escalate tensions," said Alfredo Montufar-Helu, a senior adviser to the Conference Board's China Center, a think tank.

But, he cautioned: "It’s clear that neither the US nor China want to be the first in reaching out for a deal."

China has not yet communicated publicly on any exemptions. A Friday statement by the Politburo, the Communist Party's elite decision-making body, focused on efforts to maintain stability at home by supporting firms and workers most affected by tariffs.

The readout, which followed the Politburo's regular monthly meeting, showed that Beijing was also ready to hunker down and fight a trade war of attrition if needed to outlast Washington in enduring the pain from the breakdown of their relationship.

A Ministry of Commerce taskforce is collecting lists of items that could be exempted from tariffs and is asking companies to submit their own requests, according to a person with knowledge of that outreach.

The ministry said on Thursday it had held a meeting with more than 80 foreign companies and business chambers in China to discuss the impact of US tariffs on investment and the operation of foreign firms in the country.

"The Chinese government, for example, has been asking our companies what sort of things are you importing to China from the US that you cannot find anywhere else and so would shut down your supply chain," American Chamber of Commerce in China President Michael Hart said.

Hart added some member pharmaceutical companies had reported being able to import drugs to China without tariffs. He believed the exemptions were drug-specific, not industry-wide.

The chief executive of French aircraft engine maker Safran said on Friday it had been informed last night that China had granted tariff exemptions on "a certain number of aerospace equipment parts" including engines and landing gear.

The tariff exemptions under consideration by Beijing could provide cost relief for companies in China and take pressure off US exports at a time when the Trump administration has shown signs of wanting to make a deal with Beijing.

The European Union Chamber of Commerce in China also said it had raised the issue of tariff exemptions with the commerce ministry and was awaiting a response.

"Many of our member companies are significantly impacted by the tariffs on critical components imported from the US," President Jens Eskelund said.

A list of 131 categories of products said to be under consideration for tariff exemptions was circulating on Chinese social media platforms and among some businesses and trade groups on Friday. Reuters could not verify the list, which included items ranging from vaccines and chemicals to jet engines.

Huatai Securities said the list corresponded to $45 billion worth of imports to China last year.

China's customs agency and Ministry of Commerce did not reply to requests for comment. China's foreign ministry said it was not familiar with tariff exemption plans, redirecting queries to "relevant authorities".