Saudi Arabia and the UAE are the top investment destinations for Chinese companies in the Middle East, attracting 84% and 79% of surveyed companies, respectively, PwC said in its latest survey.

The Kingdom has emerged as one of the leading choices for future expansion over the next three to five years, driven by its rapid economic transformation and market scale.

Additionally, the UAE stands out as a top choice due to its position as a regional hub for diversification and investment.

According to the survey, nine out of 10 Chinese companies are looking to grow operations in the Middle East, with 44% already formalising their business plans.

Almost 40% of enterprises report positive returns from their Middle East operations, while the share of loss-making firms has fallen to 15%.

More than 60% of respondents were satisfied with their investments, reflecting the region’s growing importance to Chinese business strategy.

Instead of relying on representative offices, 77% of firms now operate through full entities serving local markets, a decisive transition from testing the waters to building long-term value in the region.

Chinese investors are diversifying beyond traditional industries, with rising interest in digital technologies, renewable energy, artificial intelligence and biopharmaceuticals.

“Chinese enterprises are no longer treating the Middle East as an exploratory market – it has become a strategic hub for global growth,” said Linda Cai, Inbound/Outbound Leader, PwC China.

Nearly 72% of companies are looking for tax benefits outside free zones, and 74% are calling for more transparent and efficient regulatory frameworks. These expectations highlight the priority investors place on cost efficiency, clarity and governance frameworks. 

The survey covered 136 companies from China.

(Editing by Seban Scaria seban.scaria@lseg.com)