BEIJING: Slapping import bans on products like mangoes, coal and salmon has long been China’s way of punishing countries that refuse to toe its political line.
But Beijing has shown that it can also hurt others by cutting a lucrative Chinese export: tourists who normally flock to South Korea or Taiwan.
China’s recent boycott of South Korea over a US anti-missile shield on the Korean peninsula signals a growing aggression in the way it flexes its economic muscles, analysts say.
Beijing has banned Chinese tour groups from going to the South, hammering its tourist market and the duty-free shops of retail giant Lotte Group, which has been targeted for providing land for the controversial defense system.
Dozens of Lotte stores were closed in China and protests held across the country as Beijing ramped up pressure on Seoul to abandon the Terminal High-Altitude Area Defense (THAAD) system, which it sees as a threat to its own military capability.
Lotte also suffered setbacks in several of its Chinese ventures — from the government-ordered halt of a $2.6 billion theme park project to apparent cyberattacks on company websites.
“If you don’t do what Beijing’s political leaders want they will punish you economically,” said Shaun Rein, founder of Shanghai-based China Market Research Group.
“They put the economic vise on politicians around the world. They have been doing it for years and it works.”
Seoul-based tour operator Korea-China International Tourism has reported an 85 percent drop in tourists in recent months, which its founder attributes to China’s anger over THAAD.
The company usually receives 4,000 mostly Chinese visitors a month, but that has fallen to around 500 after Beijing warned tourists about the risks of traveling to the South, and ordered Chinese tour operators to stop sending groups there.
Economic embargo
As the world’s second-largest economy and biggest trader, China can also inflict pain by blocking certain imports.
Norway learned that lesson the hard way. After the Oslo-based Nobel Committee awarded the 2010 Peace Prize to jailed Chinese activist Liu Xiaobo, China halted Norwegian salmon exports.
Relations only returned to normal in April after Oslo pledged its commitment to the one-China policy and respect for China’s territorial integrity.
Mongolia also incurred Beijing’s wrath in November when it allowed the Tibetan spiritual leader the Dalai Lama, who China views as a devious separatist, to visit the impoverished landlocked country.
Following the exiled Buddhist monk’s visit, China reportedly took punitive measures against Mongolia, including stopping trucks carrying coal from crossing the Chinese border — a move with heavy repercussions for Mongolian mining concerns.
Tourism to Taiwan has also fallen sharply as relations across the strait worsen.
The Taipei Hotel Association reported decreases of up to 50 percent in Chinese visitors in recent months and warned “the situation could get worse.”
“I’ve been told by friends not to visit Taiwan since the cross-strait situation is tense but I am just a regular citizen so I am not too worried about that,” a 58-year-old Chinese man surnamed Liu said in a Taipei duty free shop.
Countries that submit to China’s demands, however, can find themselves rewarded.
A ban on 27 Philippine tropical fruit export companies was lifted after President Rodrigo Duterte declared his “separation” from the United States during a visit to Beijing in October, confirming his tilt toward China.
The sanctions had been intended to punish Manila for its South China Sea stance.
South Korea will be hoping for a similar outcome after its new President Moon Jae-In dispatched his envoy Lee Hae-Chan to China after his election victory last week, in an apparent effort to mend fences with Beijing.
“It’s a kind of carrot and stick policy. They (China) are doing it to show they have more leverage now and send a signal,” said Jean-Pierre Cabestan, a professor in political science at Hong Kong Baptist University.
“The irony is that China has criticized that way of doing things but now China is less hesitant to do the same thing because she’s stronger and feels she can do it.”
Analysts expect China to become even more assertive as it seeks to fill the vacuum created by the US retreat into “America First” policies promoted by President Donald Trump.
“Smaller nations (in Asia) don’t feel that Trump is going to support them,” said Rein.
But in the case of South Korea, Asia’s fourth-largest economy, Beijing has been careful to target specific sectors to avoid disruption that could backfire on Chinese companies.
“It has become a well-developed tool of diplomatic pressure,” said Andrew Gilholm, director of analysis of Greater China and North Asia at Control Risks.
Beijing’s new weapon in economic war: Chinese tourists
Beijing’s new weapon in economic war: Chinese tourists
Saudi Arabia’s revised 2024 capital investment rises to $355bn, surpassing target by 38%
RIYADH: Saudi Arabia’s gross fixed capital formation reached SR1.33 trillion ($355 billion) in 2024, reflecting a 4.5 percent annual increase, according to updated data released by the Ministry of Investment.
This figure exceeded the ministry’s original target of SR964 billion by 38 percent, underscoring strong momentum in the Kingdom’s capital investment cycle and signaling continued progress toward Vision 2030 objectives.
The updated breakdown shows that private sector investments grew by 11 percent annually in 2024 to reach SR1.19 trillion, now accounting for 89.16 percent of total GFCF.
Meanwhile, government sector investment declined by 29.4 percent to SR144.3 billion, representing just 10.84 percent of total capital formation. The figures highlight the country’s growing reliance on private investment to drive sustainable growth.
GFCF rose to 29 percent of gross domestic product, surpassing the National Investment Strategy target of 26 percent, signaling growing investor confidence and effective policy implementation, according to the ministry.
The GFCF metric—an indicator of long-term economic health—tracks net investment in fixed assets across infrastructure, industry, real estate, and tourism. Higher capital formation is typically associated with greater productive capacity and stronger future growth.
These investment gains come amid a broader push by the Ministry of Investment and the newly established Saudi Investment Promotion Authority to strengthen Saudi Arabia’s position as a global investment hub.
Through its InvestSaudi platform, the authority has launched wide-ranging initiatives to attract domestic and international capital.
Efforts include a revamped national investment portal that highlights 15 priority sectors with tailored incentive packages, alongside the rollout of the 2025 Investment Law, which streamlines licensing and regulatory processes across industries.
Internationally, Minister of Investment Khalid Al-Falih has led roadshows and delegations across Asia, the Americas, and Europe—regions that collectively account for a significant share of the Kingdom’s foreign direct investment inflows.
Al-Falih has emphasized Asia as a key focus, noting that six of Saudi Arabia’s top 10 FDI source countries are from the region. Domestically, he continues to promote Saudi investment opportunities at major economic forums and sector-specific conferences, positioning the Kingdom’s transformation as a compelling investment narrative.
Together, these outreach efforts, combined with a growing pipeline of mega-projects such as NEOM, the Red Sea, and Diriyah Gate, are shaping a dynamic investment landscape and reinforcing the Kingdom’s appeal to both regional and global investors.
Saudi Arabia leads 106% rise in MENA IPO proceeds across Q1: EY
RIYADH: Proceeds from initial public offerings across the Middle East and North Africa saw a 106 percent annual rise in the first quarter of 2025, fueled by Saudi Arabia, according to an analysis.
In its latest report, professional services networking firm EY said the MENA region raised $2.1 billion through 14 IPOs — a year-on-year rise of four — in the three months to the end of March.
Over the period, 12 of the 14 listings happened in the Kingdom, with five IPOs taking place on the Tadawul benchmark index, and seven occurring on Saudi Arabia’s parallel market, Nomu.
In recent years, the Kingdom has emerged as a hotspot for listings, fueled by robust economic reforms, diversification efforts away from oil dependence, and growing interest from regional and international investors.
In January, a separate report released by Kamco Invest said that Saudi Arabia led the GCC IPO market in 2024, earning a global ranking of seventh in total IPO proceeds.
Commenting on activities in the first quarter, Brad Watson, MENA EY-Parthenon leader, said: “This year started on a positive note. MENA capital markets continue to show resilience, with the total IPO value more than doubling compared to the same period last year.”
He added: “Saudi Arabia continues to dominate the MENA region’s market in terms of activity as well as proceeds. In addition, the IPO pipeline for the rest of the year remains robust across various sectors and multiple countries.”
According to the latest report, the Kingdom’s Tadawul main market welcomed the largest offering in the MENA region during the first quarter of this year, with Umm Al Qura for Development and Construction Co. raising $523 million, contributing to 22 percent of the overall IPO proceeds.
This was followed by Almoosa Health Group, which accounted for 19 percent with $450 million, and Derayah Financial with $400 million.
Overall, the Tadawul main market generated $1.8 billion in total proceeds, while Nomu raised $69 million.
EY revealed that 28 percent of the IPO funds raised in Saudi Arabia came from the real estate management sector, followed by healthcare equipment and services at 24 percent, financial services at 21 percent, and consumer discretionary and retail at 17 percent.
In the first quarter of this year, the UAE witnessed one IPO on the Abu Dhabi Securities Exchange, with Alpha Data PJSC raising $163 million.
Oman’s Muscat Stock Exchange saw one IPO, with Asyad Shipping Co. raising $333 million.
“The increased demand for MENA listings has led to developments in market infrastructure through new products, enhanced governance standards, and a focus on transparency and accountability,” said EY MENA IPO and Transaction Diligence Leader, Gregory Hughes.
He added: “The upward trajectory in the number of IPOs across the region reflects a wider trend of sector diversification, with investors and companies increasingly looking beyond traditional oil-based industries.”
EY further said that the outlook for MENA IPOs for the rest of 2025 remains positive, with 21 companies intending to list on the region’s exchanges across various sectors.
According to EY, Saudi Arabia remains the frontrunner in this pipeline, with 17 companies already receiving approval from the Kingdom’s Capital Markets Authority.
In the UAE, three companies have announced their plans to list, and outside the GCC, Egypt has announced one IPO.
“In 2025, we can potentially expect to see an increase in IPOs from the technology sector, including online retail, fintech, foodtech, and classifieds,” said Hughes.
Saudi Arabia sees no rival to US in capital markets, says Al-Falih
RIYADH: Saudi Arabia views the US as unmatched in both capital markets and innovation, with no close competitor, and continues to actively invest in American institutions, a senior official stated.
Speaking during a panel discussion at the Milken Institute in Los Angeles, Saudi Investment Minister Khalid Al-Falih stated that the Kingdom continues to trust and engage with US-based partners as part of its long-term economic strategy.
“There is no close competitor to the US in many aspects, certainly capital markets, their depth and their breadth, and also the innovation spirit,” Al-Falih said.
He added that in the last three or four years, there has been widespread discussion about the next tectonic shift in “how we live and how we do business and how we govern, driven by AI, which is primarily a US innovation.”
Al-Falih further emphasized the Kingdom’s continued engagement with American institutions: “Our trust in the US remains strong, and we continue to work with American companies and financial institutions. We also invest in the US for the same reasons I mentioned.”
He acknowledged that while the global economic landscape is undergoing a transformation, the US continues to stand out for its ability to drive technological revolutions — particularly in artificial intelligence — and for its deep-rooted institutional strength.
The minister noted that current shifts in global influence are part of a long-term trend that has seen emerging markets gain ground, with the G7’s share of global gross domestic product declining from 60 percent to 40 percent over the past decades.
“There has been sort of a democratization of some of the things that, psychologically, Western countries — including the US — thought they had forever, and you’re seeing many countries today are able to innovate on their own and compete,” he said.
Addressing broader geopolitical and economic turbulence, Al-Falih said Saudi Arabia and other Gulf Cooperation Council economies have developed the resilience to weather global shocks, including energy price volatility and regional disruptions such as the Red Sea shipping crisis.
“In the Middle East, I will just say at this outset that we have built, over the years — for unfortunate reasons — a lot of resilience because we’re used to shocks. We’re used to security challenges, and we have the mechanisms to absorb different types of shocks,” Al-Falih said.
Despite global uncertainties, he said the Kingdom continues to see robust investment growth — both local and foreign — driven by confidence in Saudi Arabia’s economic reforms and strategic positioning.
“I can tell you, as minister of investment, we’re seeing very healthy investment continuing to happen in the Kingdom. A lot of it is local — driven by our private sector and our sovereign wealth fund — but a significant growth year on year from foreign investors who… do believe that, in the overall balance of things, there is more opportunity than risk,” he said.
The minister concluded by emphasizing that the GCC, and Saudi Arabia in particular, offers favorable risk-return trade-offs for international investors seeking long-term opportunities.
In January, Saudi Arabia announced plans to expand its trade and investment ties with the US to at least $600 billion over the next four years, according to the Saudi Press Agency.
Saudi, Egypt step up investment ties with incentives across key sectors
RIYADH: New incentives to boost trade, investment, and cooperation were discussed at the Saudi-Egyptian Business Forum in Cairo.
Organized by the Federation of Saudi Chambers and Egypt’s General Authority for Investment and Free Zones on May 5, the business forum focused on sectors including industry, real estate development, tourism, and special economic zones, the Saudi Press Agency reported.
The renewed push comes after Egypt’s parliament ratified a bilateral investment protection agreement with the Kingdom in March, aimed at enhancing capital inflows, creating jobs, and strengthening economic cooperation.
It also marks a continuation of Saudi financial support for Egypt, including a $5 billion deposit in 2022 that brought total deposits from the Kingdom in the north African country’s central bank to $10.3 billion.
“Assistant Minister of Investment and CEO of the Saudi Investment Promotion Authority Ibrahim Al-Mubarak stated that the investment protection and promotion agreement between Saudi Arabia and Egypt created a reality for investment cooperation,” the SPA report stated.
“He emphasized that Saudi Arabia will remain a leading investment partner for Egypt, noting that SIPA has granted 7,000 licenses for Egyptian investments in the Kingdom while trade between the two countries reached SR60 billion ($15.9 billion) in 2024, marking a 29 percent increase,” it added.
Egypt is working to strengthen its investment climate with policy and infrastructure reforms, said Hossam Heiba, CEO of Egypt’s General Authority for Investment and Free Zones. He noted that a dedicated unit has been created to manage Saudi investment affairs and facilitate project delivery.
At the forum, officials from the Kingdom highlighted plans to boost investment via special economic zones focused on sectors such as cloud computing, logistics, and automotive manufacturing, as well as shipbuilding, food, mining, and pharmaceuticals.
Saudi Arabia is also pushing its National Initiative for Global Supply Chains to strengthen regional and global connectivity in key sectors.
The event builds on momentum from April’s Saudi-Egyptian Industrial Forum in Riyadh, where officials emphasized industrial integration and trade facilitation.
At the time, the Kingdom’s Industry Minister Bandar Alkhorayef said the Saudi Export-Import Bank had completed SR1.3 billion in operations with Egypt, underlining the depth of bilateral ties.
Egypt’s non-oil business activity weakens in April; Lebanon’s PMI ticks higher
RIYADH: Egypt’s non-oil private sector contracted further in April according to S&P Global, while Lebanon saw its economic decline slow across the month.
The north African country’s Purchasing Managers’ Index hit 48.5 in the period, down from 49.2 in March.
This contraction was driven by a reduction in domestic and foreign demand, which caused new orders to fall for the second consecutive month.
Any figure below 50 indicates a decline, while above that number shows growth.
Lebanon’s PMI report, produced by S&P Global in association with BLOMINVEST Bank, showed a rise in April to 49, up from 47.6 in March.
Despite this marginal increase, the figure is still lower than earlier this year, when the country registered a healthy reading of 50.6 in January and 50.5 in February.
The figures for the countries come as PMI figures across the Middle East and North Africa have generally been reflecting the rapid expansion and growth of private firms.
In April, Saudi Arabia’s PMI stood at 55.6, while it was 54 in the UAE and 54.2 in Kuwait.
Reflecting on Egypt’s decline, David Owen, senior economist at S&P Global Market Intelligence, said: “Business activity weakened for the second month running in April as firms highlighted an additional drag from falling sales.”
He added: “Some companies signalled that weakness in international markets had hit business confidence and spending, amid wider concerns that rising global economic uncertainty and changing trade policy could soften demand across several markets.”
Business optimism up in Egypt
In January, Egypt’s non-oil business activities entered the expansion zone, with the PMI hitting 50.7. It was followed by another healthy month of growth in February, where the PMI stood at 50.1.
According to the survey, the rate of contraction of non-energy business activity quickened from March and was the fastest seen in four months.
The report revealed that lower levels of activity and new work led non-oil companies to rein in input purchases for a second month in a row.
Due to limited business activities, companies in Egypt were also keen to limit headcounts, with the latest data signalling a decline in employment for the third successive month.
S&P Global further said that input prices in the country’s non-oil economy rose at their fastest pace in four months in April, marking a notable reversal from March, when inflation dropped to a 58-month low.
“Subdued pressure on input costs in recent months helped firms to steady their own prices in April, which should bring some reassurance that inflation headwinds are easing,” said Owen.
He added: “Although input costs rose at a much sharper pace over the month, this was mainly attributed to the roughly 15 percent uplift in fuel prices, rather than underlying inflationary pressures.”
Regarding the future outlook, non-oil firms in Egypt expressed more confidence, with optimism ticking up to a three-month high.
Firms that expressed future confidence hoped that market conditions at home and abroad would strengthen in the coming months.
In February, global credit rating agency Moody’s affirmed Egypt’s Caa1 long-term foreign and local currency issuer rating with a positive outlook, driven by prospects for improvement in the country’s debt service burden.
The report said that the positive outlook was given due to the country’s strengthening foreign exchange buffers.
Moody’s awards a Caa1 rating to countries with poor quality and very high credit risks.
Private sector activity in Lebanon falls at slower pace
According to the latest report, Lebanon’s private sector economy remained under pressure at the start of the second quarter, as new orders and business activity shrank.
Purchasing activity and stock levels also dipped slightly in April, while firms’ expectations for the next 12 months fell into pessimistic territory for the first time since November.
“The BLOM Lebanon PMI recorded 49.0, implying a decline in private sector business activity for the second month in a row, but at a slower pace. This decline was mainly down to the marginal decline in new orders, reflecting weaker export demand,” said Helmi Mrad, senior research analyst at BLOM Bank.
The latest study also indicated a reduction in the volume of incoming new business received by private sector companies in Lebanon, due to factors including market conditions, security concerns, regional instability, and weak customer purchasing power.
“The debate regarding the surrendering of Hezbollah’s weapons escalated in the last couple of weeks as some of Hezbollah’s leaders stated that no one can forcefully remove their weapons. In the meantime, Israel’s breaches of the ceasefire agreement continue,” said Mrad.
He added: “This stalemate is having negative effects on business activity in the short-run, despite the progress made on the enactment of laws essential for financial restructuring.”
S&P Global also highlighted a fractional decline in employment across the Lebanese private sector at the start of the second quarter.
