In Depth: Chinese Contractors Undergird Middle East Building Boom
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Flying into the Saudi Arabian capital on a mid-October evening, a Chinese building contractor looked down at the sprawl below and said: “Riyadh feels like one giant construction site.”
The half-hour drive from the airport to Diriyah, an ancient city on the northwestern outskirts of the capital, reinforced that view. The night was illuminated not just by city lights, but by the floodlights of countless building sites, where work went on around the clock.
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- Saudi Arabia and UAE are leading a trillion-dollar construction boom to diversify their economies, with Saudi projects expected to reach $1.4 trillion by 2030.
- Chinese contractors have secured major deals, leveraging expertise and cost advantages, but face challenges like tough localization rules, strong Western competition, and rising costs.
- In 2024, trade between China and Arab states reached $407.4 billion; Chinese firms built landmark projects including Dubai’s Ciel Tower, the world’s tallest hotel at 377 meters.
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Who’s Who
- China Harbour Engineering Co. Ltd.
- China Harbour Engineering Co. Ltd. (CHEC) is a state-owned Chinese firm actively involved in the Middle East's construction boom. CHEC secured a $1.5 billion arena project in Diriyah, Saudi Arabia, in July. This highlights their presence and competitiveness in the region's ambitious development plans.
- China Railway Construction Corp.
- China Railway Construction Corp. (CRCC) is a Chinese state-owned firm actively involved in the Middle Eastern construction boom. Notably, CRCC secured a significant $1.1 billion infrastructure contract in Diriyah, Saudi Arabia, in May. Additionally, its subsidiary, China Railway 18th Bureau, constructed the Ciel Tower in Dubai, which is currently the world's tallest hotel.
- Sany Heavy Industry Co. Ltd.
- Sany Heavy Industry Co. Ltd. (600031.SH) is a Chinese brand that manufactures heavy machinery. Their equipment is being used at construction sites in Riyadh, Saudi Arabia, highlighting the company's involvement in the massive construction boom in the Middle East.
- Hunan Construction Investment Group Co. Ltd.
- Hunan Construction Investment Group Co. Ltd.'s international arm is actively bidding for projects in Saudi Arabia, demonstrating a strong interest in the Middle Eastern construction boom. They have submitted bids worth tens of billions of yuan, including a nearly 10 billion yuan bid for a commercial complex. The company has found that the region offers prompt payment for completed work.
- Power Construction Corp. of China
- Power Construction Corp. of China faces specialized challenges in the Middle East, such as extreme heat, sandstorms, and loose soil. An employee noted that the region lacks infrastructure capacity, skilled labor, and technology, making specialized Chinese techniques like deep-drilling crucial for stabilizing foundations.
- China Railway 18th Bureau Group Co. Ltd.
- China Railway 18th Bureau Group Co. Ltd. is a Chinese state-owned firm with an international unit that has significantly expanded its business in the Middle East since 2018. They are known for their expertise in super-tall construction, notably building the Ciel Tower in Dubai, the world's tallest hotel, at a record-setting speed. The company's projects, like the Ciel Tower, are recognized for high quality and efficiency, attracting further client recommendations.
- China State Construction Engineering Corp. Ltd.
- China State Construction Engineering Corp. Ltd. (CSCEC) is a state-owned Chinese building contractor. In April, a joint venture including CSCEC won a contract for an opera house project in Diriyah, Saudi Arabia. CSCEC is among the Chinese firms leveraging their expertise and cost advantages to expand in the Middle East's construction boom.
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What Happened When
- 2016：
- Vision 2030 is launched in Saudi Arabia, beginning a wave of real estate and infrastructure projects.
- 2018：
- China and the League of Arab States sign a declaration on cooperation under the Belt and Road Initiative.
- 2018：
- Xue Dewen states that China Railway 18th Bureau Group Co. Ltd.'s Middle East business began to take off.
- June 2023：
- UAE introduces a corporate income tax at a low rate of 9%.
- 2024：
- Dubai attracts approximately 6,700 high-net-worth individuals, the most globally, according to Henley & Partners.
- 2024：
- In 2024, Chinese companies sign more than 40 housing contracts in the UAE, including a batch of six projects totaling $727 million.
- 2024：
- Trade between China and Arab countries reaches $407.4 billion.
- August 2024：
- Construction of the Blue Sky Hotel—the world's tallest hotel building at this time—is nearly finished.
- December 2024：
- The Ciel Tower in Dubai, built by China Railway 18th Bureau, passes its final inspection. It is the world’s tallest hotel at 377 meters.
- Early 2025：
- Material prices in the Middle East rise by more than 10%, and labor costs jump about 20% compared with previous periods.
- April 2025：
- A joint venture including China State Construction Engineering Corp. Ltd. wins a contract for an opera house project in Diriyah, Saudi Arabia.
- May 2025：
- China Railway Construction wins a $1.1 billion infrastructure contract in Diriyah, Saudi Arabia.
- July 2025：
- China Harbour Engineering secures a $1.5 billion arena project in Diriyah, Saudi Arabia.
- late August 2025：
- Fahad Alhashem, assistant deputy minister of investment development at the Kingdom’s Ministry of Investment, states at an industry forum that Saudi Arabia currently has more than 400 major construction projects in the pipeline.
- mid-October 2025：
- A Chinese contractor arrives in Riyadh, Saudi Arabia, noting extensive construction activity across the city.
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