China to receive up to $2tn in Middle East sovereign investments by 2030, HKEX CEO says

China, is set to receive $1 trillion to $2 trillion in investments from top sovereign funds in the Middle East by 2030 as they look to pivot to Asia amid a rapid rise in their investment capital, the chief executive of Hong Kong Stock Exchange (HKEX) has said.

The state-controlled wealth funds in the region currently have about $4 trillion in investment capital available and only a small portion of that – approximately 1 per cent to 2 per cent – is being invested in Asia, particularly China, Nicolas Aguzin told delegates at the 10th Arab-China Business Conference in Riyadh on Monday.

This investment capital is expected to grow to about $10 trillion by the end of this decade and “we estimate somewhere between 10 per cent and 20 per cent will be invested in China”, said Mr Aguzin, a former JP Morgan banker.

“Think about what that means. That’s about $1 trillion to $2 trillion that will be reallocated in investments in that part of the world.”

Sovereign wealth funds in the Middle East, which are some of the largest in the world, invest on behalf of their governments to generate long-term returns.

The economic ties between China and the Arab world, especially with Saudi Arabia, are growing rapidly and there is ample room for further growth, especially in capital market relation between the two countries, Khalid Al Falih, Saudi Arabia’s Minister of Investment, told policymakers, government officials, investors and executives from top companies in China and Saudi Arabia on Sunday at the opening of the two-day summit in Riyadh.

Government-to-business agreements included a $5.6 billion deal between the Saudi Ministry of Investment and Chinese developer of autonomous driving technology Human Horizons, to set up a joint venture for the research, development, manufacturing and sale of electric vehicles.

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