(Yicai Global) July 11 -- Chinese companies are increasing their investments in their Middle Eastern favorite countries of Saudi Arabia and the United Arab Emirates, that also includes the hot sectors of healthcare, new energy, information technology, artificial intelligence, and cybersecurity, according to PricewaterhouseCoopers.

The ME will continue to be an important investment destination for Chinese companies, Huang Yaohe, managing partner of PwC cross-border services in China, said to Yicai Global.

More than four-fifths of polled Chinese firms and investors said they are planning to deepen their presence in the ME, according to a research report recently released by the London-headquartered professional services company. The report is based on a survey participated by almost 120 Chinese firms and investors doing business in the ME from March to May.

Saudi Arabia and the UAE will remain the most popular destinations for Chinese companies to invest in the ME in the next three to five years, the report added.

The ME has become increasingly prominent in the global supply chains in recent years and countries such as the UAE and Saudi Arabia are actively improving their business environments to attract more investors, said Huang. 

More than half of the surveyed companies have already established regional headquarters in the ME, and most of them are in the UAE. Moreover, Chinese firms are examining the Saudi government's new policy on regional headquarters for multinational companies released last year.

There are already over 6,000 Chinese companies operating in the UAE in a wide range of sectors including energy, port logistics, infrastructure, communications, and finance. China's four big state-owned banks, as well as several Chinese central government directly owned enterprises, have established branches in Dubai.

Three-quarters of the survey participants said the main reason for the focus on the region is its high potential, according to the report. More than a third of the respondents said it was because of their customers' strong purchasing power. Investing in the ME was also explained by responding to local needs. Almost a fifth of the respondents said the ME market is more profitable than others and a similar share said they believe it is easier to access other markets, including Africa, through the ME.

Collaboration must be beneficial to both sides. China is one of the key markets for Dubai and the number of Chinese companies joining the government-backed Dubai Multi Commodities Centre is growing, Chief Operating Officer Feryal Ahmadi told Yicai Global. 

The Saudi-Chinese Business Council is hoping to continuously improve the productivity of the Saudi market through cooperation, drawing on China's leading technology and industry experience, Chairman Mohammed Al-Ajlan said to Yicai Global.

Al-Ajlan is also the vice-chairman of Ajlan & Brothers Holding Group. The conglomerate of textiles, beverages, and mining established a joint venture called AJEX International Logistics with Chinese logistics giant SF International in January to help Chinese e-commerce companies enter Saudi Arabia.

In June, the group also set up a JV with a Chinese company to cooperate in gold mine exploration in Saudi Arabia, Al-Ajlan added.

Editors: Tang Shihua, Emmi Laine, Xiao Yi