FirstFT: Saudi Arabia steps up demands in deals with Chinese tech group

FirstFT: Saudi Arabia steps up demands in deals with Chinese tech group

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

Good morning. Saudi Arabia is requiring leading Chinese technology companies to invest in the Gulf kingdom in return for huge deals, as it leverages its petrodollar wealth to boost its domestic tech industry.

Alibaba and SenseTime are among the top Chinese groups to have secured deals worth hundreds of millions of dollars with Saudi Arabia over the past three years, in exchange for setting up joint ventures in the country.

According to industry insiders, Saudi investors are applying increasingly stringent requirements to fund deals. In some cases, Chinese companies have to share technical expertise with their new Saudi partners — a strategy that echoes the tactics of local Chinese governments towards foreign companies decades ago.

“They want your company and engineers to train their own talent,” said one Chinese consultant advising local tech companies on how to raise money from the kingdom. “It comes with strings attached.”

The FT’s Eleanor Olcott reports on the motivations behind the Saudi-Chinese tech relationship.

Here’s what else I’m keeping tabs on today:

Five more top stories

1. China’s coastguard boarded a Taiwanese tourist vessel near the Taipei-controlled island of Kinmen yesterday. The rare inspection escalates tensions sparked by