ECONOMIC CITY

SAUDI AFFIRMS ITS CLIMATE COMMITMENTS

The Economic Cities and Special Zones Authority (ECZA), in partnership with Invest Saudi, is eyeing Chinese investments.

In March, the two entities hosted a delegation of over 200 private sector and government ocials from China’s eastern province of Shandong at King Abdullah Economic City (KAEC). The event aims to bolster positive relations and explore investment prospects for Chinese enterprises looking to expand into the Saudi market.

The delegation comprised key industry leaders specialising in energy, construction materials, machinery, and agricultural and food processing. This initiative builds upon the successful December 2023 visit by Saudi offcials to various cities across China, and the Arab-China Business Conference held in Riyadh in June 2023.

Economic cities are key pillars to Saudi’s eorts to become a global investment powerhouse, with inward investment forming a critical component of its Vision 2030 objectives, supported by its National Investment Strategy. Vision 2030 aligns closely with China’s Belt and Road Initiative, emphasising a joint commitment to enhance infrastructure and promote global connectivity and trade.

TRADE TIES

Bilateral trade between Saudi Arabia and China soared to USD 90 billion for the year up to November 2023, reflecting robust economic co-operation fuelled by Saudi Arabia's GDP growth and ongoing business climate reforms.

To accelerate economic diversification and create a new route for investors to do business in the kingdom, Saudi authorities launched the country’s first five special economic zones with special commercial regulations.

“In launching these zones, which support a wide range of industry sectors and business activities, the kingdom offers a platform for investors to accelerate their regional and international growth through a globally connected market,” according to ECZA.

Among these inaugural zones is the King Abdullah Economic City’s Special Economic Zone (KAEC SEZ). Nestled on the Red Sea where 13% of global trade flows, the zone facilitates connectivity to worldwide supply chains and utilises the world's most effcient port, as recognised by the World Bank in 2021.

A high-speed railway network, connecting the port to the rest of the country offers a 450-kilometre electric railway to ensure swift, reliable, and safe travel, supported by state-of-the-art technologies.

Situated less than 90 minutes from King Abdulaziz International Airport (Jeddah Airport) and the bustling city of Jeddah, KAEC SEZ is home to 4 million residents and provides easy access to a highly skilled workforce.

Surrounded by a rich pool of industrial talent and a swift, effcient multimodal transport system, the KAEC SEZ is well equipped to seamlessly link businesses to global markets.

LOCALISING SUPPLY CHAINS

The Ras Al-Khair Special Economic Zone is situated near Ras Al-Khair Port, the kingdom's newest industrial port with a robust capacity to handle bulk cargo and to service over 100 manufacturing projects.

Ras Al-Khair SEZ’s ambitions is to localise supply chains and establish a hub for regional ship repairs and conversions, propelling Saudi Arabia toward its goal of developing a USD 14 billion maritime industry.

Meanwhile, the Jazan Special Economic Zone, on the Red Sea shipping route, is leveraging its proximity to the flourishing African markets, and its pivotal role as a Saudi Arabia-China investment platform.

Jazan SEZ serves as a catalyst for Saudi Arabia's mining industry, positioning it as a key player in global construction and processed metals and minerals markets. It offers access to one of the region's largest ports for exporting goods and importing manufacturing materials, along with access to Saudi Arabia's leading chemicals, metals, and agricultural industries. Additionally, Jazan's diverse natural assets, from pristine islands to majestic mountains, foster the development of its burgeoning tourism sector.

SAUDI’S OWN ‘SILICON VALLEY’

The Cloud Computing Special Economic Zone is emerging as the kingdom’s ‘Silicon Valley’.

Through the zone, companies specialising in emerging and disruptive technologies will benefit from the government’s commitment to encourage and support the growth of digital technologies in the kingdom, as underscored in the National Strategy for Digital Transformation and the ICT Sector Strategy, according to ECZA.

This growth includes a target for USD 20 billion investments, both in foreign and domestic direct investments, by 2030 across data and AI sectors with support from Cloud Computing SEZ.

“This zone is different from the others in that it lacks a central physical location. However, it is no less competitive and impactful and has received significant interest from major international companies,” ECZA added.

The Riyadh Innovation and Logistics Zone (RISLZ) is another innovative development poised to elevate the capital city Riyadh as a global economic hub. The zone allows investors to benefit from a range of fiscal incentives, including customs duty suspension, VAT exemptions, and zero percent income tax rates, making RISLZ an attractive destination for light manufacturing, trade, distribution, and value-added industries.