Chinese tech firms are pressing ahead with their expansion in Saudi Arabia, signaling Beijing has staying power in a region that Washington has sought to draw more firmly into its orbit.

On Aug. 18, Lenovo said it had appointed a new leadership team for Saudi Arabia as plans advanced for a regional headquarters in Riyadh. The new base in the kingdom and a new manufacturing plant under construction sit at the heart of a $2 billion deal struck last year with Saudi Arabia’s state-owned tech investment firm Alat. The factory, expected to begin producing millions of devices by 2026, marks one of the most substantial commitments by a Chinese tech firm in the country. 

Details: The Chinese laptop maker’s push into Saudi Arabia reflects the Gulf state’s broader ambition under Crown Prince Mohammed bin Salman to build capacity in advanced industries and diversify the economy away from oil. For Lenovo, which maintains dual headquarters in Beijing and the United States, the partnership with Alat could give it a solid foothold in a growing technology market where hundreds of multinationals are establishing bases under Riyadh’s so-called Regional Headquarters Program. As part of this initiative, companies without a local HQ risked being cut off from Saudi government contracts starting in 2024.

The deal — under which the Chinese firm sold $2 billion worth of convertible notes to Alat — also gives the Saudi firm, which is owned by the country’s sovereign wealth fund, a seat on Lenovo’s board. Last week, Alat CEO Amit Midha formally joined as a non-executive director, while Lenovo installed a slate of senior executives to run its Saudi business. Together with the Riyadh headquarters, Lenovo has signaled it will make investments in retail, research and development and other areas.