BEIJING: Cracks are opening in China’s mighty economy: investors are backing away from deals, factories are moving abroad and companies are shedding jobs.
The world’s second-largest economy is losing steam, hitting its slowest growth in almost three decades last year, and flagging further in recent months.
While gross domestic product grew at 6.6 percent in 2018 — a rate that would be the envy of most nations — China’s efforts to cut its debt mountain have weighed on the economy.
Private businesses in particular face new hurdles as costs rise and financing becomes harder to come by, while the trade war with the US has not helped.
Here is a look at some of the struggles faced by Chinese companies and people:
Feeding China’s addiction to video games seemed an easy bet for Beijing Yixin Technology, a tech startup behind the mobile game Farm Take Home.
The game allows players to harvest wheat, raise chickens and plant apple trees — a bucolic refuge from the pressures of urban China.
But in real life, the tech firm has struggled to find investors.
“In December our company’s funding ran out, we had an investment lined up, but the money never came through,” said chairman Cui Yi.
“This month I arranged another investor, then he backed out too. I think we can’t hold out.”
His company is not alone.
Venture capital funding dried up at the end of last year. Total investment in the fourth quarter fell 13 percent from a year earlier, according to data from Preqin market research.
Policymakers are partly to blame, pushing a war on debt and financial risk that has cut the funding flowing into investment firms, industry insiders say.
Another government diktat halted new video game approvals for months — officially due to youth gaming addiction concerns — sending firms like Beijing Yixin into a deep freeze.
Other companies are facing the fallout from the trade war with the US.
More than a handful of exporters have sought to get around US tariffs by building factories outside China, according to a review of public stock filings.
Others are sending workers home early for Chinese New Year or cutting overtime.
Last month China’s exports fell.
“It has hit our profits,” Harry Shih, manager of Runfine Bearings in eastern Zhejiang province, said of the trade war.
Washington slapped 25 percent taxes on many types of ball bearings in July. Shih said he had shared the cost increase with his customers, roughly half of whom are from the US.
“Business is going down for most companies including factories. Like me they have the same problems, profits are going down” as costs rise, said Shih.
Slowing disposable income growth and tighter credit have hit consumer spending, with car sales falling last year for the first time in more than 20 years.
“Volumes have fallen by half,” said Wang Jingjing, a fast-talking 23-year-old salesman at a Ford dealership in Beijing, noting about one third of the salespeople had been fired or left.
Wang’s own salary has roughly halved, he said, from around 10,000 yuan ($1,474) a month in 2017 down to less than 5,000 yuan ($737).
“I’ve definitely controlled my own spending, going out to eat less, buying less, cutting down on these things,” he said, adding he believes things will turn around this year with new car models coming out.
Official data shows unemployment at a stable rate, rising slightly to 4.9 percent last month.
But independent data paints a different picture.
In October-December advertised tech positions fell by 20 percent from a year earlier, after declining 51 percent in the third quarter, according to data from Zhaopin, China’s largest recruitment website and Renmin University.
China’s economy “faces downward pressure, and to some extent this pressure will be transmitted to the job market,” said Meng Wei, a spokeswoman for the National Development and Reform Commission, China’s state planner.
A lawyer who consults on labor disputes, Guo Xuehai of Beijing Zhonghai Law Firm, said, “there are definitely more employees coming for help than before,” but added this was usually the case at this time of the year.
At Beijing Yixin, Cui said he could only afford to pay his 30-odd employees 70 percent of their salaries as money ran out in November. By December he paid them nothing and this month he cut their insurance and benefit plan, unofficially firing them.
“We worked 9 am to 9 p.m. plus Saturdays with no overtime pay and now no pay at all,” said a 3D designer surnamed Li, who helped build Farm Take Home.
Employees looking for new jobs have found that companies are not hiring at the moment.
“Hopefully it will be better after Chinese New Year,” Li said.
Businesses struggle as cracks appear in China’s economy
Businesses struggle as cracks appear in China’s economy
- Private businesses in particular face new hurdles as costs rise and financing becomes harder to come by
- Venture capital funding dried up at the end of last year
World Economic Forum adds Aramco facility to its Global Lighthouse Network
- The network recognizes industrial sites that use advanced technologies to boost performance, operations and sustainability
- North Ghawar Oil Producing Complex is the 5th Aramco facility to earn a place in the network
LONDON: The World Economic Forum has added Aramco’s North Ghawar Oil Producing Complex to its prestigious Global Lighthouse Network.
It is the fifth Aramco facility to earn a place in the network. The company said the addition honors its efforts to enhance operational and environmental performance.
Nasir K. Al-Naimi, the company’s upstream president, described the achievement as testament to the company’s focus on innovation and operational excellence.
“It validates our journey towards a truly digital and lower-carbon-emissions future, where technology empowers us to optimize our processes, reduce our environmental impact, and deliver exceptional value to our customers and shareholders.”
The Global Lighthouse Network, established by the forum in 2018 in collaboration with management consultancy McKinsey & Company, recognizes industrial facilities worldwide that have leveraged Fourth Industrial Revolution technologies to achieve measurable improvements in financial performance, operations and sustainability, and reduce environmental impacts.
The Aramco facility was one of 17 industrial sites worldwide added to the network on Tuesday. It now comprises 189 facilities worldwide, and Aramco is the only energy company represented by more than three facilities. The North Ghawar site is located in Al-Ahsa Governorate in the Eastern Province.
Four Seasons Beirut to reopen in 2026 after reconstruction
JEDDAH: The Four Seasons Hotel in Beirut is set to reopen in the first quarter of 2026 after undergoing a comprehensive rehabilitation, according to a statement from Kingdom Holding Co.
“On the occasion of a new era for Lebanon, and under the leadership of His Excellency President Joseph Aoun, I am pleased to announce that the Four Seasons Hotel, Beirut, which Kingdom Holding built, will be entirely reconstructed and refurnished by Kingdom Beirut S.A.L and will reopen to the public in Q1 of 2026,” Prince Alwaleed bin Talal, chairman of KHC, wrote on his X account on Tuesday.
Prince Alwaleed further noted that the hotel, located adjacent to Beirut’s Zaitunay Bay marina, would be upgraded to the highest international standards. The revamp is expected to position the property as one of the premier urban resorts worldwide.
The timing of the announcement follows recent diplomatic developments, including a call from Saudi Crown Prince Mohammed bin Salman to congratulate Lebanon’s new president, with an invitation to visit the Kingdom.
The Four Seasons Beirut was severely damaged in the 2020 Beirut Port explosion, which devastated much of downtown Beirut, an area once popular with Gulf tourists.
The region has since been affected by geopolitical tensions, including Hezbollah’s involvement in the Syrian war and its support for Houthis in Yemen.
Four Seasons, one of the world’s leading luxury hotel chains, has been privately owned by KHC and Cascade Investment, the investment vehicle controlled by Bill Gates, since 2007. Both KHC and Cascade own 47.5 percent stakes in the company, with the remaining 5 percent held by Triple Holdings, which represents Four Seasons’ founder, Isadore Sharp, according to KHC’s website.
KHC’s relationship with Four Seasons dates back to 1994, when the company first recognized the brand’s potential and invested in a minority stake through a private equity deal.
Saudi Arabia, Pakistan to announce major collaborations in mining, minister reveals
RIYADH: Saudi Arabia and Pakistan are set to announce major collaborations in the mining sector, with a particular focus on copper and gold assets, according to a top official.
Speaking to Arab News on the first day of the Future Minerals Forum 2025, taking place in Riyadh from Jan. 14 to 16, the South Asian country’s Minister for Petroleum Musadik Malik explained that the two nations are also exploring collaboration prospects in additional sectors including energy, food security, and industrial.
This falls in line with Pakistan seeking to strengthen trade and investment ties with the Kingdom, whose leadership reaffirmed its commitment this year to expedite a $5 billion investment package for the country.
“Well, we are hoping and expecting the year 2025 to be a year of big announcements, particularly between the Kingdom of Saudi Arabia and Pakistan. As you know, we are in advanced stages of conversations about a very large asset, and we have done all the homework that was needed. We’ve done the commercial due diligence, we’ve done the legal deed due diligence. We’ve done the financial due diligence. Both sides have come up with valuation frameworks,” Malik said.
“In mining, it’s going to be the mining assets, particularly the copper mining assets, copper and gold mining assets. So, we are very hopeful about that,” he added.
The senator said the valuation ranges are in place, and both teams are now empowered to negotiate.
“Right now, we are under non-disclosure, so I can’t give you the details, but suffice to say that we are expecting very big announcements very soon,” Malik said.
“In the industrial areas, as you know, there are about $2 billion worth of commercial MoUs (memorandums of understandings) and contracts already signed between the Saudi companies and Pakistani companies, and many of them have become the actual contracts, and the trade has started. So, that’s a big chunk of commercial activity as well as industrialization activity,” he added.
“We also have ongoing conversations about very large energy projects, in terms of refineries and so on and so forth. So, it depends upon whether it’s food security. We have things going on, whether it’s commercial trade, there are things going on, whether there’s industrial activity and investments there are things going on,” the senator said.
Malik went on to highlight the benefits of the ministerial roundtable held at the Future Minerals Forum, which saw participation from 89 countries.
“I think the most interesting and intriguing part of this ministerial roundtable is that everyone is focused on the future. We’re not just talking about right now. It’s almost like we’re sitting together and writing the history of future. That’s what we are trying to do,” he said.
“We are thinking not just about where the assets are, but we are also thinking about where how these assets are going to create value and we are not only limited to creating value, but we are also thinking about value capture. So, from asset to value creation to value capture, everything is getting discussed, and it’s getting discussed in a manner which ensures sustainability of mining,” he added.
The senator also highlighted the growing focus on sustainable mining, communities, the circular economy, and how resource-rich countries are positioning themselves to participate in downstream activities, capture value, and navigate the geopolitics and emerging industrial policies shaping the future.
“All of those very healthy discussions are taking place right now. But if you talk about the end game, the end game is to ensure that there’s a sustainable world, that the world is carbon neutral,” Malik said.
Saudi-Finland ties hold ‘almost unlimited potential,’ says Finnish minister
RIYADH: Mining presents significant opportunities for collaboration between Saudi Arabia and Finland, a senior Finnish minister stated, emphasizing the “almost unlimited potential” of their bilateral relationship.
In an interview with Arab News on the sidelines of the Future Minerals Forum in Riyadh on Jan.14, Wille Rydman, Finland’s minister for economic affairs, highlighted that Saudi Arabia’s partnership with Finnish companies could play a key role in achieving sustainability within the Kingdom's mineral sector.
Saudi Arabia already enjoys a robust relationship with Finland in the energy sector. In October 2024, the two countries signed a memorandum of understanding to accelerate collaboration in areas such as clean power technologies, stable electricity systems, and climate change mitigation solutions.
“I think that there is almost unlimited potential in our bilateral trade relations. As we are now meeting here in the Future Minerals Forum, the focus is heavily on the mining industry. And I think that’s one of the arenas where our countries can cooperate even deeper in the future,” Rydman said.
He added: “Finnish companies are very known for their sustainability, their ability for doing (a) sustainable mining industry. I’m very confident that they can also give a lot of know-how and business potential for Saudi Arabia’s mineral sector.”
Rydman further emphasized that Finnish collaboration in the mining sector would assist Saudi Arabia in meeting its energy transition targets. Strengthening the industry, he noted, is essential for achieving these goals, as minerals are crucial for the electrification of societies.
“It’s been globally very well recognized how important a role critical raw materials are playing in the future energy transition, and how important it is to maintain those critical supply and value chains when it comes to minerals and mining industry,” the minister explained.
He also pointed out that Saudi Arabia’s Vision 2030, which includes objectives like responsible mining and the use of green energy, presents valuable opportunities for Finnish companies to operate within the Kingdom.
“The aims and targets that Saudi Arabia has put for itself are actually kind of targets and aims where Finnish companies have been succeeding very well, especially when it comes to the mining industry, responsible mining, green energy, green and clean transition. And that’s why I think that Finnish companies entering Saudi Arabian markets can help Saudi Arabia to reach those targets,” Rydman said.
The minister also extended an invitation to Saudi investors to explore opportunities in Finland.
ACWA Power expands in China with $312m in renewable energy deals
RIYADH: Saudi Arabia’s ACWA Power has solidified its position in China’s renewable energy sector with two major agreements valued at $312 million.
These agreements mark a significant step in the company’s global expansion strategy and underscore its commitment to driving the country’s clean energy transition.
The deals include a 132-megawatt solar photovoltaic portfolio in Guangdong province and a 200-megawatt wind energy project, according to a company statement. Both projects are central to ACWA Power's broader strategy in China, which was launched in 2023 to support the nation’s renewable energy goals.
Marco Arcelli, CEO of ACWA Power, expressed enthusiasm about the developments: “This is a significant milestone for ACWA Power in China, establishing our operational presence in renewable energy and water desalination. We are committed to working alongside our Chinese partners to contribute to the country's clean energy and water transition.”
Arcelli further emphasized the company’s long-term vision: “We are not only investing in renewable energy projects but also in Chinese expertise and building enduring relationships within the country.”
The solar project, ACWA Power’s first collaboration at the asset level with its long-term supply chain partner Sungrow Renewables, will span three separate sites in Guangdong. Additionally, the wind energy agreement, which was signed with Mingyang Smart Energy Group — a leading wind turbine manufacturer — opens the door for joint investments in China’s rapidly expanding wind sector.
ACWA Power’s formal entry into China’s renewable energy market was announced in December 2024, with the company planning to develop projects exceeding 1 gigawatt across multiple provinces.
Mohammad Abunayyan, founder and chairman of ACWA Power’s board of directors, commented: “Our entry into China’s renewable energy market represents a key milestone in our global strategy for a sustainable future. Our growth is not just about adding megawatts; it’s about forging lasting partnerships that accelerate the energy transition and create a cleaner, more prosperous world for future generations.”
These projects are part of an initial phase that will see ACWA Power expand its portfolio to more than 1 gigawatt of capacity in China. This move aligns with the company’s long-term ambition to triple its assets under management to approximately $250 billion globally by 2030.
