The global economy is reorganising itself, and the Gulf’s sovereign wealth funds are placing their bets on where economic influence will concentrate in the coming years.
For decades, oil revenue anchored Gulf states to western markets. But with protectionism rising in the US and Europe, and with oil demand projected to peak within the next decade, the Gulf is looking east for new opportunities.
What makes this shift significant is that it goes beyond portfolio diversification. Asia is not only a fast-growing region, it is increasingly integrated and resilient.
The Regional Comprehensive Economic Partnership (RCEP), involving 15 economies across East Asia, South-East Asia and the broader Asia-Pacific, represents the largest co-ordinated economic bloc in the world.
Guided by Asean's consensus-driven middle powers, it demonstrates that regional co-operation and market integration can thrive even amid global disruption. For Gulf investors, this makes Asia a strategic platform to hedge against uncertainty in traditional energy markets while building influence in high-potential sectors.
Asia has outgrown its image as merely a low-cost production hub and has become an arena where advances in semiconductors, artificial intelligence, electric vehicles and biotech are being innovated and expanded at global scale.
Gulf investments are entry points into these ecosystems. Saudi Arabia’s Public Investment Fund partnering with Foxconn to build the kingdom’s first EV brand is one such example, giving the Arab world's largest economy a pathway to build industrial expertise at home through knowledge transfer.
Similarly, Abu Dhabi’s Mubadala expanding in China is less about chasing returns than about embedding the UAE into networks of innovation and supply chains.
Long-term partners
Gulf capital is also flowing into India’s digital economy and South-East Asia’s logistics networks, where e-commerce, FinTech and renewable energy projects are reshaping consumer markets. For sovereign wealth funds, these regions represent not only opportunities for growth but also long-term partners in building the technological and industrial capabilities that Gulf economies need to achieve their economic diversification goals.
The Gulf’s engagement in China highlights the strategic significance of these investments. According to Deloitte, Gulf funds invested an estimated $9.5 billion in China in the year ending September 2024. Both Abu Dhabi Investment Authority (Adia) and Kuwait Investment Authority (KIA) rank among the top 10 shareholders in Chinese A-share listed companies. As many western investors reduce exposure to Chinese equities, Middle Eastern funds are leveraging their strong political and trade relationships with Beijing to gain influence and strategic returns.
The bigger picture is that Gulf nations want to be part of the main forces shaping the global economy. Saudi Vision 2030, the UAE’s Operation 300bn, and Qatar’s investments in Asian digital infrastructure all reflect the same ambition to evolve from hydrocarbon dependence to active participants in tomorrow’s industries, using Asia as a platform for innovation, supply chains and strategic influence.
The Gulf region now controls approximately 40 per cent of global sovereign wealth assets. Its major players’ investment in Asia is a statement about how these nations see the global economy evolving over the next 50 years. By embedding themselves in Asia’s growth story, Gulf states are simultaneously gaining resilience, know-how and a front-row seat in shaping industries that will outlast oil.
Arthur Dong is a professor at Georgetown University’s McDonough School of Business, Dubai and Washington
