Chinese investments under the Belt and Road Initiative (BRI) reached a record $124 billion in the first half of 2025, with the Middle East playing a leading role in deals tied to energy transition and digital infrastructure, even as construction activity in the region saw a sharp pullback.
According to the ‘China Belt and Road Initiative Investment Report 2025,’ produced by the Griffith Asia Institute (GAI) at Griffith University in collaboration with the Green Finance & Development Centre (GFDC) of FISF, People’s Republic of China, total construction activity in the Middle East declined from the previous year. Yet, Saudi Arabia and the UAE still ranked among the top five global recipients for construction volume, securing $7.2 billion and $7 billion, respectively.
“This is a short-term shift and does not explain any trends,” said Christoph Nedopil, GFDC director and author of the report, adding that the Gulf continues to remain strategically relevant for Chinese companies, particularly as BRI investments pivot toward green energy, metals processing, and high-tech manufacturing.
Record surge
China’s BRI activity in the first half of 2025 included $66.2 billion in construction contracts and $57.1 billion in non-financial investments — nearly matching the initiative’s total for all of 2024. The surge was powered by big-ticket projects in Nigeria, Kazakhstan, and Thailand across energy, mining, and technology.
“The extreme surge in H1 2025 might be explained by a few very large deals, which might have just happened in this time,” Nedopil said. “Overall, we have seen a growing engagement trend by China in the BRI countries over the past years.”
Among the drivers, he pointed to three strategic motivations: “A stronger desire by Chinese companies to be closer to their customers and thus invest closer to the markets where they sell their goods; a desire to de-risk trade and reduce reliance on exports from China; and a need to invest in local markets to meet local content requirements (e.g., for minerals processing).”
A notable development was the growing role of private Chinese enterprises in BRI deals — a marked shift from the earlier dominance of state-led megaprojects. Companies such as Longi Green Energy, East Hope Group, and Xinfa Group led outbound investment activity, including in key Gulf economies.
“The engagement by privately owned Chinese companies in BRI countries has been rising over the past years due to their stronger global positioning as technology leaders,” Nedopil explained. “At the same time, a number of Chinese private companies have gained relevant experience to work in more difficult economic and governance environments, which is also particularly relevant in the mining sector.”
Middle East’s strategic fit
Despite a drop in construction activity overall, the Middle East’s strategic alignment with China’s BRI priorities—particularly around clean energy, resource processing, and digital infrastructure—remains strong.
In Saudi Arabia, Harbin Electric signed a $1.6 billion deal to construct a gas-fired power plant. Meanwhile, Egypt secured a $700 million investment from Xinyi Glass Holding to build a solar PV glass manufacturing facility, signaling expanded cooperation in clean tech manufacturing.
Energy continued to dominate Chinese BRI engagement, accounting for 35 percent of the total. While green energy investments hit a new high of $9.7 billion in H1 2025, oil and gas still outpaced renewables with over $30 billion in fossil-fuel-backed deals. One of the largest was the $20 billion Ogidigbon Gas Park in Nigeria.
“Host countries need to take their responsibility on sustainable development as seriously as Chinese investors,” Nedopil said. “Without clear agency from host countries to attract sustainable investments, Chinese partners will likely also provide non-green engagement as long as it is legal.”
Beyond construction
Transport-related BRI activity continued its decline, falling to just 7.2 percent of total engagement, the lowest since the initiative’s launch in 2013. In contrast, sectors like technology, manufacturing, and mining gained momentum.
Chinese investments in these areas more than doubled to $23.2 billion in H1 2025, fueled by demand for electric vehicles, batteries, and green hydrogen. Among the standout deals were Longi’s €7.6 billion hydrogen project in Nigeria and China Aviation Lithium Battery’s $2.1 billion EV battery facility in Portugal.
Metals and mining also saw record engagement. China invested $24.9 billion in the sector in H1 2025, with Kazakhstan receiving the lion’s share—$12 billion for aluminium and $7.5 billion for copper.
IMEC vs. BRI
With the India-Middle East-Europe Economic Corridor (IMEC) gathering momentum, questions remain over whether it will challenge or complement BRI’s footprint in the Gulf.
“Currently, China’s engagement in most countries has become less focused on transportation compared to earlier years,” said Nedopil. “India itself is also not a BRI country. Meanwhile, over the years, many transport corridors have been worked on in this region, not least through CAREC. While IMEC was announced in 2023, the implementation of IMEC projects will strongly depend on the ability of regional players and the US to collaborate, which at this point carries some uncertainty.”
Outlook: steady and strategic
Looking ahead, the report forecasts a moderation in Chinese BRI engagement in the second half of 2025. Fewer megadeals are expected, but the number of deals is likely to remain strong – especially in strategic sectors.
“For the rest of 2025, we see stabilisation of Chinese BRI engagement with a focus on BRI engagement in renewable energy, mining and new technologies,” Nedopil noted in the report.
He added that “potential future engagements remain in six project types: manufacturing in new technologies (example, batteries), renewable energy, trade-enabling infrastructure (including pipelines, roads), ICT (example, data centres), resource-backed deals (example, mining, oil, gas), and high visibility or strategic projects (example, railway, ports).”
With rising geopolitical and trade uncertainties, Chinese firms are expected to further diversify and deepen their overseas footprint—particularly through the so-called “New Three” industries: EVs, batteries, and renewable energy.
“The ability of Chinese companies to expand abroad has been shifting to more private sector companies that are engaging in investment,” said Nedopil. “They have, over the past years, acquired the capital and the know-how how to invest in overseas markets.”
(Reporting by SA Kader; Editing by Anoop Menon)
(anoop.menon@lseg.com)
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