China’s direct investment across the Middle East and North Africa surged last year, driven by a massive influx of capital into the United Arab Emirates and new spending along North African industrial corridors.
Chinese investment in 17 of the 23 countries that make up the MENA region, as tracked by the MBN Great Powers Index, doubled last year to $4.8 billion, according to new figures released by Beijing on Wednesday. Globally, China’s foreign direct investment increased by 11.1% year-over-year.
The report, published on Sept. 23 by three Chinese agencies including the Ministry of Commerce, does not clearly list 2025 data for Iran, Iraq, Lebanon, Somalia, Syria, or Yemen. In 2024, China’s total FDI stock in Iran stood at $4.5 billion, with $25.8 million in net capital inflows that year.
The heavy investment comes as the United States and China jockey for influence in the region. Washington has long been the primary outside player in MENA, and its security alliances give it broad reach even as its conflict with Iran has strained some of those relationships. Beijing, meanwhile, has used its manufacturing prowess, Belt and Road infrastructure program, and transactional foreign policy to make gains across the region.
China still trails the United States in direct FDI in the region, which grew 60% in 2025, from $10 billion in 2024 to $16.12 billion.
MBN’s Great Powers Index, released earlier this month, found that 12 of the 23 countries in MENA are now more closely aligned with China than with the United States across five categories of influence: military, economy, technology, diplomacy and soft power.
The UAE drives the growth
The United Arab Emirates stood out as the main recipient of China’s regional investment expansion. Net direct investment in the UAE jumped 237.7%, from $770.1 million in 2024 to $2.6 billion in 2025.
That single-year surge added more than $3.55 billion to China’s cumulative asset position in the country, boosting its total investment stock in the UAE by 39.9% to $12.47 billion. Much of the investment has been in Abu Dhabi’s Khalifa Port, cloud computing and data center infrastructure such as Huawei’s 5G buildout, manufacturing, and renewable energy—including LONGi and JinkoSolar—according to Securities Times.
The UAE now accounts for more than 40% of China’s investment stock in the MENA region and over 50% of its new annual capital flows. Chinese entities are increasingly leveraging Dubai and Abu Dhabi not just as destination markets, but as financial, commercial and logistical centers.
Saudi Arabia remained China’s second-largest asset base in the region, drawing $574.9 million in new investment to bring its total FDI stock to $4.26 billion.
North African industrial corridors
China is also investing more in North Africa, which has become a key manufacturing hub for the world’s second-largest economy.
China more than tripled net annual direct investment in Egypt to $283.6 million, bringing total accumulated stock to $1.68 billion. Chinese manufacturers are expanding factories in the Suez Canal Economic Zone to produce green energy equipment, electronics, and textiles, as tracked by the MBN Great Powers Index.
China’s new direct investment in Morocco reached $177.42 million, lifting its cumulative asset stock in the Kingdom to $840.41 million. Tunisia recorded a fivefold surge in direct investment stock to $78.98 million. Chinese companies are establishing EV battery gigafactories, cathode material lines, and green energy plants to feed Europe and the global automotive supply chain.
Not every country saw a gain. Capital flows fell in several markets, including Oman (down by $95.02 million), Bahrain (down by $17.18 million) and Israel (down by $17.76 million).
