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Saudi Arabia to Enhance Trade with China through KSA-Sino Logistics Zone at King Salman Airport

Kelvin

Saudi Arabia's New KSA-Sino Logistics Zone Set to Revolutionize Trade with China.

EWPartners, an investment firm that Saudi Arabia's sovereign wealth fund backs has revealed interest in setting up an SEZ in Saudi Arabia that will, in effect, seek to improve bilateral trade with China. This initiative, known as the KSA-Sino Logistics Zone, will be based on the newly constructed King Salman International Airport in Riyadh.

The project seeks to attract Chinese logistics, light manufacturing, and re-export companies to operate in Saudi Arabia, facilitating their expansion into the Middle East, Africa, and Europe.

Investment and Development Plan

According to Cliff Chau, managing partner at EWPartners, China's economic slowdown is fueling Chinese companies' interest in entering Saudi Arabia. The company is negotiating with several potential equity sources to raise around $2 billion to cover initial redevelopment costs for a four-square-kilometer Special Economic Zone (SEZ) planned to launch by the end of next year. The total investment required for completion is still under evaluation.

Chau noted that Chinese firms are increasingly interested in Saudi Arabia, aligning with Saudi Arabia's strategic direction of shifting away from oil dependence and crude oil production. The KSA-Sino Logistics Zone is part of this framework, leveraging Saudi Arabia's trade relationships with China, the largest importer of Saudi oil. This trend aligns with Saudi Arabia's economic model.

Strategic Aims and Region Impact

Saudi Arabia's SEZ is expected to contribute to the country's Vision 2030, aiming to become a logistics land link between three continents. According to Jerry Li, the founder and managing partner of EWPartners, the King Salman International Airport can help achieve this vision. The SEZ is expected to grow in four stages over the next decade, focusing on improving logistics efficiency.

The KSA–Sino Logistics Zone, formed by the Ministry of Transport and Logistics Services, will combine a logistics zone and an international business zone to foster international companies' ventures. This project aims to boost Saudi Arabia's trade relations with Asia, boost FDI, and improve general distribution.

Li emphasized the need for a global environment involving global enterprises, logistics facilities, and superior manufacturing capacity to enhance Saudi Arabia's logistics networks globally and improve the flow of goods and services.