(Yicai) Sept. 8 -- China-Saudi capital market cooperation has progressed steadily since the Shanghai Stock Exchange and Saudi Tadawul Group inked a memorandum of understanding three years ago, with the next phase likely double down on cross-border investment, exchange traded funds, and cross-listings, according a senior executive at Tadawul, the Saudi Exchange’s parent company.

Governments, regulators, and market participants from both countries have done a great deal of work already, but they need to deepen cooperation and ongoing dialogue to open up new investment channels and promote cross-listing opportunities, Tadawul’s Chief Sales and Marketing Officer Nayef Al Athel told Yicai at the Capital Market Forum Select Shanghai 2026 on Sept. 3.

Looking ahead to the next three to five years, Al Athel said the partnership is likely to focus on three key areas: facilitating easier direct investment for Chinese and Saudi investors; launching more two-way investment products; and advancing cross-listings.

“We are partners, and we are here to understand what the Chinese corporate wants, what the Chinese investor wants, what the Chinese society wants,” Al Athel explained. Meanwhile, China is trying to understand the needs of Saudi investors, so if the dialogue between the two parties continues, greater bilateral investment opportunities will emerge, he said.

“Dialogue is a very underestimated tool,” Al Athel said, adding that the more China and Saudi Arabia communicate, the deeper their understanding will become, helping both sides achieve their development goals.

Cooperation with the SSE was one of the main reasons behind Saudi Arabia’s introduction of regulations for Saudi Depositary Receipts, which provided Chinese companies with a new channel to list in Saudi Arabia, according to Al Athel.

Since these regulations were introduced, more Chinese firms are seriously considering Saudi Arabia as an overseas financing platform, Al Athel noted. He expects discussions on cross-listings to make substantial progress within the next six to 12 months.

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The MOU signed in September 2023 aimed at deepening connectivity between the Chinese and Saudi capital markets by exploring cooperation in cross-listings, ETF dual listings, fintech, ESG integration, data exchange and research, while promoting knowledge sharing and creating new investment and fundraising opportunities for businesses and investors in both countries.

China-related ETFs have already been introduced, and Riyadh-based Tadawul hopes to see more ETFs linked to Chinese assets listed in Saudi Arabia in the future, Al Athel said.

The Saudi capital market’s opening-up drew lessons from China’s experience with the qualified foreign investor scheme, according to Al Athel. “We have come up with our own QFI program, and we've looked at different examples, including the one that has been implemented in China, and we've learned a lot.”

Over the past decade, Saudi Arabia has used these experiences to attract more than 4,500 global institutional investors, bringing hundreds of billions of US dollars into the Saudi capital market.

Around 150 Saudi representatives attended CMF Select Shanghai, accounting for nearly one-third of all participants. Around 140 of them were visiting China for the first time. The delegation was fascinated by the professionalism and sophistication of Chinese investors and financial institutions, Al Athel said.

Shanghai is one of the world's most vibrant capital market hubs, with a long history and notable achievements, he added. CMF Select Shanghai is only the beginning of Tadawul’s activities in China, so returning to Shanghai in the future would be a natural choice.

Editor: Futura Costaglione