Via The Cradle

Saudi Arabia’s Public Investment Fund (PIF) opened a second office in mainland China earlier this year, establishing a Shanghai branch to expand dealmaking and attract more Chinese investment into the kingdom, Bloomberg reports.

The office was registered last year, falls under PIF’s Beijing branch, and is led by Lily Cong, a former chief representative of Fidelity International in China’s capital.

Source: Britannica 

The Shanghai outpost was reportedly created to strengthen the $1 trillion fund’s ability to pursue outbound deals in China, while officials are also seeking to bring more Chinese companies into Saudi Arabia.

This move strengthens Riyadh’s investment relationship with Beijing, while the US continues to be a major market for the kingdom. The Shanghai office expands PIF’s global presence, which already features offices in New York, London, Hong Kong, and Paris. 

Saudi Arabia and China already maintain strategic and financial links across sectors, including energy and finance, while other Gulf wealth funds are also looking to expand their exposure to China.

Abu Dhabi is also considering placing Chinese assets held by two of its wealth funds into a new entity, according to earlier reports, a move that could pave the way for a broader shift in its investment strategy.

The Gulf investment push comes amid major shifts in West Asian markets following the US war on Iran, triggering regional disruptions that have put pressure on Gulf economies and accelerated moves away from dollar-dominated energy trade.

Saudi Arabia, Qatar, and other Gulf states have deepened yuan-based financial links with China, while disruptions in the Strait of Hormuz have further exposed the fragility of the “petrodollar order”.

According to a report by Fortune, Riyadh did not formally renew its 2024 commitment to price oil exclusively in US dollars, a year after signing a $7 billion currency swap agreement with Beijing. 

The Saudi central bank is also a key participant in the mBridge digital payment platform, which enables direct currency exchanges via blockchain technology.

Economists cited by Fortune say the shift reflects China’s growing weight in Saudi trade, as Beijing has displaced the US as the kingdom’s largest oil customer. 

“The economic gravity pointed toward yuan while the currency arrangement pointed toward dollars,” EBC Financial Group analyst Michael Harris wrote. 

Saudi Arabia still conducts most deals in US dollars, but expanding financial ties with Beijing signal a broader effort to diversify trade and investment channels as China positions the yuan as a possible alternative in global energy markets.