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Chinese VCs look to Middle East for US dollar lifeline

Saudi Arabia’s Minister of Foreign Affairs Faisal bin Farhan Al-Saud (CR) and Vice President of the Chinese People’s Political Consultative Conference (CPPCC) Hu Chunhua at the 10th Arab-Chinese Business Conference in Riyadh on June 11, 2023 attend meetings;

Faiz Nurelddin | AFP | Getty Images

BEIJING—Chinese venture capitalists who once relied on U.S. investors are now using Middle Eastern money to run lawsuits.

A flurry of conferences and business visits to China and the Middle East over the past few months indicate an expected growth trend in international capital flows.

Related investment news

CNBC Pro

A number of Middle East investors have been in talks over deals with Chinese venture capital funds over the past 12 months, according to people familiar with three Chinese companies with U.S. dollar-denominated funds. They requested anonymity because they are not allowed to discuss the funding negotiations publicly.

The money won’t completely replace U.S. investment, but is expected to account for about 20% of all U.S. funding by Chinese venture capital, according to one of the sources.

Investors in the Middle East are actively looking for opportunities in China and then making small investments to test the waters, the person told CNBC this week, discussing frontier technologies, emerging consumer trends, He pointed out that biotechnology is a hot industry to watch.

Many investors don't think China is 'as essential as it used to be': proponent

Strengthening the investment trend is a conglomeration of diplomatic, financial and economic developments.

Relations between China and the Middle East have cooled since Saudi Arabia and Iran restored ties earlier this year through Beijing-brokered talks.

Meanwhile, tensions between the United States and China are escalating further.

Those tensions and heightened regulatory oversight in the two countries have discouraged many US-based investors from investing in Chinese venture capital funds. These funds are usually denominated in US dollars and the invested startups are then listed on US stock exchanges.

middle east Capital is about to step in, especially as countries such as Saudi Arabia and Qatar seek to diversify away from their reliance on fossil fuels.

But many potential investments in Chinese funds are still in talks, according to venture capital funds.

trillions of assets

As of February 2022, Middle Eastern investors’ allocations to North American assets were still significantly higher than to Asia-Pacific assets, according to alternative asset research firm Preqin. Alternative assets include venture capital but do not include listed stocks or bonds.

Its exposure is increasing.

According to data from Preqin, the share of Middle East sovereign wealth funds’ investments in alternative assets around the world nearly doubled from 2021 to the first half of 2022.

According to the latest estimates available from Preqin, the total assets of the eight largest sovereign wealth funds in the Middle East exceeded $3 trillion last year.

Saudi strategy is profit-driven, minister says 'interests with China are strong and growing'

The relationship between Saudi Arabia and China has gone from being based on trade to “Core investment relationshipSaudi Investment Minister Khalid Al-Falih told CNBC’s Dan Murphy this week.

Al-Falih noted Saudi investments in oil refining and petrochemicals in China, as well as investments in technology by Saudi sovereign wealth funds, public investment funds and private companies.

The PIF has about $700 billion in assets under management, according to its website. The fund did not respond to a request for comment on the percentage of its investment in China.

Investment in automotive technology

China is a major source of technology and a major source of business. Partnering with China is one of the key drivers for the UAE’s successful transformation.

Massimo Falcione

Dubai Business Council

Read more about China from CNBC Pro

Massimo Falcione, secretary-general and vice-chairman of the Dubai Business Council, said, “After the conference, there will be more participation of investors from China.” He said an increasing number of investment funds and asset managers are pouring into the United Arab Emirates from China.

“China is a major source of technology and a major source of business,” he said. “Partnering with China is one of the key drivers for the UAE’s successful transformation.”

somehow Saudi Arabia again dubaiIn recent years, governments in the Middle East have announced plans to spend heavily on restructuring their economies for future growth.

Chinese-born Niol Ma, who has lived in Dubai for about 20 years, says Chinese companies have valuable infrastructure and manufacturing know-how.

Regional interest in doing business with China is growing rapidly, with Ma claiming that his company, Gulf Ferry Management Consultants, had zero clients in 2021, but 12 in the past. It is said that he has been interviewing more than 100 prospective customers in a month. Ma claims his company has already helped Chinese clients raise more than $350 million.

He said the goal for many Chinese clients is to eventually repackage them as local companies in the Arab region that can be listed on Nasdaq.

— CNBC’s Natasha Turak contributed to this report.

Summarize this content to 100 words Saudi Arabia’s Minister of Foreign Affairs Faisal bin Farhan Al-Saud (CR) and Vice President of the Chinese People’s Political Consultative Conference (CPPCC) Hu Chunhua at the 10th Arab-Chinese Business Conference in Riyadh on June 11, 2023 attend meetings;Faiz Nurelddin | AFP | Getty ImagesBEIJING—Chinese venture capitalists who once relied on U.S. investors are now using Middle Eastern money to run lawsuits.A flurry of conferences and business visits to China and the Middle East over the past few months indicate an expected growth trend in international capital flows.Related investment newsA number of Middle East investors have been in talks over deals with Chinese venture capital funds over the past 12 months, according to people familiar with three Chinese companies with U.S. dollar-denominated funds. They requested anonymity because they are not allowed to discuss the funding negotiations publicly.The money won’t completely replace U.S. investment, but is expected to account for about 20% of all U.S. funding by Chinese venture capital, according to one of the sources.Investors in the Middle East are actively looking for opportunities in China and then making small investments to test the waters, the person told CNBC this week, discussing frontier technologies, emerging consumer trends, He pointed out that biotechnology is a hot industry to watch.Strengthening the investment trend is a conglomeration of diplomatic, financial and economic developments.Relations between China and the Middle East have cooled since Saudi Arabia and Iran restored ties earlier this year through Beijing-brokered talks.Meanwhile, tensions between the United States and China are escalating further.Those tensions and heightened regulatory oversight in the two countries have discouraged many US-based investors from investing in Chinese venture capital funds. These funds are usually denominated in US dollars and the invested startups are then listed on US stock exchanges.middle east Capital is about to step in, especially as countries such as Saudi Arabia and Qatar seek to diversify away from their reliance on fossil fuels.But many potential investments in Chinese funds are still in talks, according to venture capital funds.trillions of assetsAs of February 2022, Middle Eastern investors’ allocations to North American assets were still significantly higher than to Asia-Pacific assets, according to alternative asset research firm Preqin. Alternative assets include venture capital but do not include listed stocks or bonds.Its exposure is increasing.According to data from Preqin, the share of Middle East sovereign wealth funds’ investments in alternative assets around the world nearly doubled from 2021 to the first half of 2022.According to the latest estimates available from Preqin, the total assets of the eight largest sovereign wealth funds in the Middle East exceeded $3 trillion last year.The relationship between Saudi Arabia and China has gone from being based on trade to “Core investment relationshipSaudi Investment Minister Khalid Al-Falih told CNBC’s Dan Murphy this week.Al-Falih noted Saudi investments in oil refining and petrochemicals in China, as well as investments in technology by Saudi sovereign wealth funds, public investment funds and private companies.The PIF has about $700 billion in assets under management, according to its website. The fund did not respond to a request for comment on the percentage of its investment in China.Investment in automotive technologyChina is a major source of technology and a major source of business. Partnering with China is one of the key drivers for the UAE’s successful transformation.Massimo FalcioneDubai Business Council”It was clear that trucking in China is bigger than anywhere else. If companies succeed in developing safe self-driving trucking, they are more likely to expand their business in China than in other regions.” Aisar Tayeb, executive managing director of the company, said. Prosperity 7.Prosperity 7’s investments in about 30 startups are split roughly evenly between US-based companies and China-based companies, Taieb said in a phone interview earlier this month.”We’re definitely starting to see more activity in China,” he said, noting that the flow of business with China had been “a bit slow” over the past two years due to the coronavirus pandemic.In May, Abu Dhabi hosted a conference specifically aimed at: Chinese entrepreneur.In May, local authorities hosted China’s “Top 50 Unicorns,” a term used to describe startups valued at more than $1 billion. “Arab-China Unicorn Investment Conference” According to a statement by UAE state media.Read more about China from CNBC ProMassimo Falcione, secretary-general and vice-chairman of the Dubai Business Council, said, “After the conference, there will be more participation of investors from China.” He said an increasing number of investment funds and asset managers are pouring into the United Arab Emirates from China.”China is a major source of technology and a major source of business,” he said. “Partnering with China is one of the key drivers for the UAE’s successful transformation.”somehow Saudi Arabia again dubaiIn recent years, governments in the Middle East have announced plans to spend heavily on restructuring their economies for future growth.Chinese-born Niol Ma, who has lived in Dubai for about 20 years, says Chinese companies have valuable infrastructure and manufacturing know-how.Regional interest in doing business with China is growing rapidly, with Ma claiming that his company, Gulf Ferry Management Consultants, had zero clients in 2021, but 12 in the past. It is said that he has been interviewing more than 100 prospective customers in a month. Ma claims his company has already helped Chinese clients raise more than $350 million.He said the goal for many Chinese clients is to eventually repackage them as local companies in the Arab region that can be listed on Nasdaq.— CNBC’s Natasha Turak contributed to this report.
https://www.cnbc.com/2023/06/16/chinas-vcs-look-to-the-middle-east-for-a-us-dollar-lifeline.html Chinese VCs look to Middle East for US dollar lifeline

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