• Chinese companies, once ineligible for oil and gas tenders in the MENA region 20 years ago, are now expanding and well-positioned to contribute to its ambitious development vision.
• Between 2015 and 2019, Chinese companies secured contracts worth $12 billion to $23 billion, with a decline to $12 billion in 2016 due to spending cuts, and further drop to $13 billion in 2020 from lower oil prices and the COVID-19.
• Saudi Arabia has become the largest market for Chinese contractors in the MENA region, with the value of contracts awarded to them reaching $43 billion in 2024, representing 30% of the total $143 billion in contracts signed in the Kingdom during the year.
Chinese construction companies have secured contracts totaling over $90 billion in the Middle East and North Africa (MENA) region in 2024, capturing a 26% share of the region’s $347 billion project market, according to MEED Projects. This record performance highlights the increasing influence of Chinese companies, whose presence in the region has grown steadily over the past decade, as reported by Al Anba newspaper.
Chinese companies are expanding further in the region, with one of their most prominent recent projects being the Ras El Hikma development in Egypt, a massive coastal project spanning 170 million square meters and financed by the UAE’s ADQ. CSCEC has also secured $5 billion in contracts in partnership with Egypt’s Al Arjani Group for the project. With major projects in Egypt, Saudi Arabia, and across the MENA region, Chinese companies are well-positioned to contribute to the region’s ambitious development vision.
Despite their global success, Chinese companies’ expansion has raised concerns, particularly from the United States. In 2022, the Pentagon released a list of major Chinese contractors, accusing them of supporting the Chinese military through a strategy of military-civilian integration. However, these concerns seem to have had little impact on their growth outside the United States, with Chinese companies seeing significant contract increases in the MENA region since 2022.
Data shows that between 2015 and 2019, Chinese companies won contracts worth between $12 billion and $23 billion, reflecting a strong presence. However, in 2016, a decline to $12 billion occurred due to government spending cuts, and contracts fell further to $13 billion in 2020 due to lower oil prices and the pandemic’s impact.
Chinese contractors’ order books grew sharply
Post-pandemic, Chinese contractors’ order books grew sharply, with contracts rising to $26 billion in 2021, followed by a slight dip to $22 billion in 2022. In 2023, contracts awarded to Chinese companies doubled to $51 billion, reaching an all-time record of $90 billion in 2024.
The companies with the most projects include China State Construction Engineering Corporation (CSCEC), which leads in contract value and project size with 47 projects worth $23.5 billion. SEPCO 3 Power Construction Company follows with 14 projects valued at $17.1 billion, while Power China is handling 22 projects worth $17 billion.
Hua Lu Engineering and Technology Company is managing three mega projects worth $14 billion, and Sinopec and China Power Engineering Company are overseeing 19 and 14 projects, respectively, highlighting their extensive involvement in the region.
China Harbour Engineering Company has a more diversified portfolio, with 32 projects worth $8.1 billion, while China Petroleum Engineering and Construction Company is managing 27 projects worth $5.7 billion.
The MEED report identified several factors explaining the dominance of Chinese companies in the regional projects market, highlighting the following key factors:
- Low operating costs compared to global competitors, due to lower labor costs, cheaper materials and equipment, and financial support from Chinese state-owned banks.
- A calculated risk strategy, where Chinese companies enter markets cautiously, and as they gain deeper knowledge, they build strong positions in the long term.
- Advanced technical expertise gained from executing large and complex projects in China, which has strengthened their position in delivering major projects globally.
The report noted that, twenty years ago, Chinese companies were not eligible to participate in tenders for oil and gas projects in the region, but they are now competing strongly for these contracts. For instance, Chinese companies won four out of 17 contracts during the third phase of the expansion project of Saudi Aramco’s main gas system in 2024.
Saudi Arabia largest market for Chinese contractors in the MENA region
Saudi Arabia has become the largest market for Chinese contractors in the Middle East and North Africa region, with the value of contracts awarded to them reaching $43 billion in 2024, representing 30% of the total $143 billion in contracts signed in the Kingdom during the year.
$50 billion in financing
The report stated that the Saudi Public Investment Fund signed financing agreements worth $50 billion with major Chinese banks, such as the Bank of China, the Agricultural Bank of China, and the China Construction Bank, to ensure the necessary flow of financing for Chinese contractors operating in the Kingdom.
