China has launched projects in several Middle Eastern countries, including the impressive Silk City development in Kuwait.

1. China Continues
Investment in Middle
East with Silk City in
Kuwait
Dr. Ehsan Bayat

2. China Continues Investment in Middle
East with Silk City in Kuwait
Chinese President Xi Jinping announced the Belt and Road Initiative, a project meant
to reconstruct the ancient Silk Road, in late 2013. At the time, few observers
predicted the impact it would have on real estate in the Middle East because the
initial routes skipped the region. In addition, many people assumed that the close
relationships among these countries and the United States would discourage ties with
China.
However, five years later, the ties between China and the United Arab Emirates (UAE)
have become strong, and China is also forging relationships with other nations
throughout the region. The Belt and Road Initiative now includes 65 countries and
several major projects in the Middle East, including Duqm in Oman, Khalifa Port in
Abu Dhabi, and a $10 billion strategic co-investment fund in the UAE.

3. The Strengthening Relationship Between
China and the Middle East
In 2018, the ties between China and the Middle East grew even stronger with a
number of new projects and investments. This past July, President Jinping came to the
region and signed more than 13 agreements, including one between DP World and
Zhejiang China Commodities City Group to develop a Traders Market at Jebel Ali Port
and Free Zone.
Another partnership that has generated buzz in the past few months is that between
Kuwait and China. Both countries signed a memorandum regarding the development
of the Silk City project. Projected to cost $86 billion, Silk City will encompass 250
square kilometers, as well as five islands, in Kuwait. Silk City will connect to Kuwait
City via a highway and will include a major port and housing for upwards of 700,000
people. In addition, there is discussion about linking the country to new railways
between China and Europe.

4. The Strengthening Relationship Between
China and the Middle East
Silk City has become the cornerstone of the New Kuwait 2030 vision, a strategic plan
to transform the country into one of the primary cultural and commercial hubs of the
Middle East. The project also puts New Kuwait 2030 in alignment with the Belt and
Road Initiative and lays the foundation for Kuwait to become a center of business and
commerce.
The small country is strategically positioned in the Arabian Gulf between Central Asia
and Europe, and Silk City will capitalize on this potential with the Mubarak Seaport.
With 24 berths for container ships, the port is intended to increase the country’s
trade with Europe via the Red Sea. When completed, Mubarak Seaport will become
the largest commercial trading hub in Kuwait.

5. Initial Plans for the Development of Silk
City in Kuwait
While there are still many unanswered questions about Silk City, initial plans for the
project were unveiled toward the end of 2018. The entire project is expected to take
25 years to complete and will ultimately consist of four different “villages,” each with
sports, healthcare, hospitality, and recreational facilities.
One of the main attractions planned for the city is the Mubarak Al-Kabir tower, which
will stand more than a kilometer high and include 234 floors with enough housing for
7,000 people. The tower will house seven distinct vertical villages with office space,
entertainment, and hotels, in addition to residences.

6. Initial Plans for the Development of Silk
City in Kuwait
Some of the other planned attractions for the city include a nature reserve spanning
two square kilometers and an Olympic stadium, as well as an airport. In line with the
region’s emphasis on green technology and construction, the city will also feature a
center for environmental studies.
Moving forward, the government corporation Silk City Project Company will oversee
planning and construction. The company will pursue the project in stages that will
strategically address the commercial, residential, and economic needs of the city as it
grows. In the near future, Kuwait is also expected to focus on attracting foreign
investors to the new project, which may drive stability and security in the country.

7. China Invests Heavily in Other
Infrastructure in the Middle East
Kuwait’s efforts to increase stability in the region may also receive support from
China, which has begun investing quite heavily in Middle Eastern power generation.
Energy infrastructure will support the Belt and Road Initiative’s development while
also reinvesting in the countries that are helping to make the project a reality.
For example, China has a massive solar energy project planned for Abu Dhabi that will
become one of the largest solar plants in the world when completed later this year.
The plant will offer energy at the extremely competitive rate of 2.42 cents per
kilowatt-hour.

8. China Invests Heavily in Other
Infrastructure in the Middle East
In Dubai, Chinese companies have played a role in the development of the Hassyan
clean coal plant. Chinese banks are providing nearly 70 percent of the funding for this
project, which will cost $3.4 billion. The project will create the region’s first coal-fired
power plant that complies with emissions and environmental standards for fuel gas
plants, and will provide 25 percent of grid requirements.
The first phase of the plant is scheduled to open in 2020, with completion of the
entire project in early 2023. China is becoming increasingly involved with such public-
private partnerships, which are quickly changing the face of land development and
real estate throughout the Middle East.