On the back of weak domestic activity and the looming threat of Trump's tariff, Chinese companies are looking towards the GCC, a trend which is seeing a global uptick. Templewater's CEO breaks down the reasons behind the region's attractiveness to investors.

Riyadh

Chinese companies are seeking growth in the Middle East and North Africa (MENA) region as they face ongoing challenges in their domestic market, including economic slowdown, policy changes, and geopolitical tensions. Many firms are now focusing on expanding their technology and products into overseas markets, with the Gulf Cooperation Council (GCC) countries, particularly Oman, attracting significant interest.

A recent partnership between a Hong Kong-based firm and the Oman Investment Authority has led to the creation of an energy transition fund, officially launched in Hong Kong. Oman’s large landmass and strategic location on the Indian Ocean make it attractive for manufacturing and trade. The Omani government’s pragmatic and efficient approach has also been highlighted as a key factor in attracting Chinese business investment.

Chinese companies targeting MENA expansion

And we're also looking at the Chinese economy, which is continuing to show signs of a weakening momentum. How does that impact? Well, I think from our perspective, the Chinese market has been a challenging one for the past several years. It started with COVID, and then some of the policy changes domestically, and then now coupling with all the geopolitics and tariff friction, I think the Chinese market has been fairly challenging for, I would say, for probably most private equity players in the past several years. Now, however, where we see the opportunity is that while the domestic businesses see challenges, many of them are now looking to expand overseas, to develop and bring their technology, their product, their business to overseas market. And definitely in the GCC, the MENA region, it's a geography where a lot of the Chinese companies are now showing a lot of interest, particularly after the COVID period. So we believe that could potentially be an opportunity, is to taking Chinese companies to develop in the MENA region. So you're talking about the Middle East, and that's where everybody's looking right now, in terms of many of the companies that we have been speaking to as well. I want to get your take on the announcement of this energy transition fund that was just announced, coinciding with the BRI summit that was taking place here in Hong Kong just last week. Tell us a little bit more about that and why you're doing it. Yeah, so our journey in the GCC started three years ago. I was part of Chief Executive John Lee's delegation visiting the GCC three years ago, and that was also the Chief Executive's first visit post-COVID. And ever since then, Temple Water as a firm, we've been going back to the GCC pretty much on a monthly basis to explore opportunities. Not to say at the beginning it was more about fundraising in the region, talking to many different sovereigns and local investors in the GCC. But as time goes by, that has evolved from purely fundraising effort into also looking at deployment opportunity. The GCC region is obviously, all six countries are very wealthy. They also have a very young economy, a young population, which means there's a lot of energy, a lot of growth momentum. And then thirdly, every single GCC country has announced its own vision of 2040, 50, 60. All those initiatives were aiming at basically diversifying its economy from the traditional oil and gas. And they're very hungry in terms of bringing in technologies and manufacturing and many other industries to be localized within their own country. And so that's something that we have been exploring with various GCC governments and sovereign wealth for the past couple of years. And at the end, we had this partnership, this fund set up with the Oman Investment Authority. We had the official launch ceremony last week in Hong Kong. So I think coming to Oman, what many people might not know is Oman actually has the second largest landmass amongst the six GCC nations. And having the significant landmass is important if you're looking at localizing manufacturing. And then secondly, it has the longest shoreline to the Indian Ocean. So that means from a logistic point of view, it has a very, very strategic location amongst the six GCC nations as well. And so it's great for import, export and for trade. So we've been talking to OIA. And last but not least is why we decided to partner with OIA and Oman is they're very pragmatic and very efficient. I have to say the same cannot be said of all the different governments and sovereigns that we have to deal with in the region. But I think from Oman is definitely they're very eager to bring businesses in. And it's a very pragmatic approach. They're looking at solving problems and not just having meetings after meetings, but it's about taking action and getting it done.

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