Since the kick-off of the “One Belt, One Road” (OBOR) initiative in 2013, China has been investing in countries located along the defined initiative routes. The aim is to support the country’s plans to connect it to major Asian and European economies through trade and infrastructure. The OBOR initiative is said to encompass 65 countries and approximately 40% of the world’s GDP. China is soon expected to shift focus to the GCC region because of its ideal location at the center of the OBOR routes. In addition, the GCC can play a key strategic role for China’s trade with Africa.
China’s entry into the GCC market is expected to be accompanied by various opportunities and challenges. Chinese companies can potentially be new suppliers or customers for existing local firms; however, they could also turn out to be competitors. The influx of Chinese investments will create new investment opportunities for local companies, such as the development of new industrial parks. On the other hand, issues such as differences in business culture and language barriers need to be addressed and not trivialized.
For this reason, private companies in the GCC region should prepare themselves for the future and implement measures that are necessary to safeguard themselves from the adverse impacts of an increased Chinese presence in the market. Assessment of current strategies and redefinition of future ones is fundamental to ensuring and strengthening a firm’s current market positioning.