Investment in China from the Gulf Cooperation Council (GCC) region is growing. Saudi Aramco and Sinopec’s construction of a $10 billion refinery in Fujian province and the Qatar Investment Authority’s (QIA) 10 percent stake in ChinaAMC are but two of the highest-profile examples. Yet while most GCC investment remains concentrated in the eastern seaboard, savvy investors are looking westward.
China’s lesser-developed regions are the next frontier and represent substantial untapped potential, especially in food production, rural infrastructure, and small and medium-sized enterprises. Western provinces encompass some of China’s most resource-rich areas and are a critical gateway to Central Asia, ASEAN, and Europe through the Belt and Road Initiative, a strategic initiative that is reshaping global trade. The New International Land-Sea Trade Corridor, which connects western regions to global markets, facilitated 10,000 intermodal rail-sea train journeys last year, a 32 percent year-on-year increase.
The most noteworthy policy directive is the Rural Comprehensive Revitalization Plan by the Central Committee of the Communist Party of China and the State Council, initiated in early 2025. This plan, which outlines ambitious goals to expand agricultural output while prioritizing the prosperity of rural regions, presents significant opportunities for investors. Chengdu, the capital of Sichuan province, exemplifies this potential, supported by a provincial population of nearly 84 million. It serves as a strategic gateway to China’s interior, with rapid growth in technology, manufacturing, and logistics.
Investors from the GCC will be rewarded for looking beyond first-tier cities. Understanding China’s rural economic development policy, the unique approach to technological development and appreciating the vast potential of SMEs will serve them well in capitalizing on the next stage of cross-regional partnerships and trade
The Chengdu-Chongqing Economic Circle, a major economic hub, had an estimated GDP of 8.6 trillion yuan ($1.2 trillion) in 2024, accounting for over 6.5 percent of China’s total. Furthermore, the Chengdu High-tech Industrial Development Zone and the Chengdu Pilot Free Trade Zone offer attractive incentives for foreign investors, including reduced corporate income tax rates, simplified customs procedures, preferential land-use policies and regulatory support for cross-border financial transactions. Cultural festivals and business forums underscore cross-regional collaboration with Gulf partners. Some of its world-famous pandas even now reside in a Qatari zoo.
China’s rural consumers represent the engine for the next phase of economic growth. Policymakers are prioritizing smaller enterprises, often called “Little Giants”, who are the backbone of the Chinese economy, accounting for an estimated 50 percent of tax revenue and 60 percent of GDP. In working with local partners to scale up SME business capabilities in Sichuan, our team at the Global Institute for Tomorrow has realized that technology has changed the game. The launch of DeepSeek and the rapid rollout of humanoid robots highlight the country’s rapidly advancing capabilities. More importantly for investors, the democratization of AI technologies will provide a boost to smaller companies, enabling them to professionalize management, streamline operations, and bridge the language barrier to expand rapidly outside of China. Cross-regional e-commerce platforms like Alibaba, JD, Lazada, and Tokopedia will facilitate this. China can uniquely pilot new technology across cities that are home to millions of people by aligning political and economic interests. This “quantity to quality” approach means that regions can deploy and benefit from technological innovations at scale and at a lower cost compared to Western competitors.
Agriculture and food production are particularly relevant for GCC countries, which import up to 85 percent of their food. It includes modern irrigation systems, cold chain logistics, processing and packaging, and precision farming technologies. The Ningxia Hui autonomous region has positioned itself as a leading center for halal food production, seeking to attract investors from Muslim-majority countries. As China modernizes its countryside and adapts to climate-change-induced extreme weather, sectors related to environmental services will see increased demand, including waste management, water conservation, natural disaster prevention infrastructure, and renewable energy solutions. Many are highly relevant for GCC countries. Rural e-commerce and digital infrastructure, including last-mile delivery networks, rural financial technology services, digital education, and telemedicine services, are also poised for substantial growth.
Understanding China’s government administrative structures is essential. What is often underappreciated is that China operates with both centralized authority and significant local autonomy. A client recently shared his surprise when multiple local government leaders from various provinces independently pitched their cities for investment. When asked about central coordination, they reminded him that China’s free market is alive and well. Investors should proactively engage and develop relationships with provincial and municipal authorities in western regions. Relationship building is essential, so investors should focus on reciprocity by offering expertise in areas in which Gulf States excel. Historical ties and cultural exchanges can be leveraged. It is wise to prioritize long-term partnerships over short-term transactions and consider engaging with local universities and research institutions to source talent, understanding that local employment and talent development are priorities.
For GCC investors, China’s western regions represent not just immediate investment opportunities but long-term strategic positioning along emerging trade corridors. Investors from the GCC will be rewarded for looking beyond first-tier cities. Understanding China’s rural economic development policy, the unique approach to technological development and appreciating the vast potential of SMEs will serve them well in capitalizing on the next stage of cross-regional partnerships and trade.
The author is the managing director of Global Institute For Tomorrow.
The views do not necessarily reflect those of China Daily.
