The China-U.S. trade war may have hurt the Chinese and American economies since it started last year but an economic expert noted that the unfortunate event could actually be helping the world's second largest economy venture into business ties with other regions.
In an interview with CNBC on Wednesday, managing partner of venture capital firm MSA Capital, Ben Harburg, noted that the forced decoupling of China from the United States is causing Chinese firms to diversify beyond the country's largest trading partners.
Among the regions that are expected to become trading partners for Chinese firms amid ongoing trade tensions with the U.S. are Africa and the Middle East. For Chinese companies seeking for other, less stressful business environments, the two regions are "really attractive" markets.
While China and the U.S. have long partnered in the technology sector, Harburg explained that Chinese firms are now determined to innovate in terms of collaboration so they can survive the trade war's impact.
Some of the key segments that could benefit from partnerships with rising industries in the Middle East and Africa are the chip industry, banking sectors, and e-commerce networks. This is because the penetration rate for the said emerging markets are only under 10 percent.
CEO of Bahrain's Al Salam Bank, Rafik Nayed, echoed Harburg's statements, noting that Chinese firms are particularly attracted to the Middle Eastern region due to "organic" opportunities in the markets that have yet to be tapped on a widespread level.
To help spur the momentum for Chinese companies interested in finding partners in the Middle East, Beijing-based MSA Capital partnered with Al Salam Bank to help create business opportunities as a starting point.
Regarding U.S. allegations that Chinese technology could pose national security threats to other countries, Nayed said he does not feel or felt that there is a "lack of trust in China tech."
In the Middle East, Chinese foreign direct investments (FDIs) have increased significantly over the years. Since 2013, over $123 billion FDIs related to the Belt and Road Initiative (BRI) were poured into the region.
Economic experts noted that China's continued display of sincerity in establishing balanced trade ties with Middle Eastern companies has paved the way for leaders to be positive about welcoming Chinese investments and potential business.
In Africa, China's investments have grown significantly over the past few years, the China Briefing reported. Chinese companies have invested heavily in various special economic zones around the African continent and also helped establish free trade agreements with several African governments.
Due to the increasing interest from Chinese entrepreneurs and the increasing number of investments to the continent, China has become Africa's largest trading partner. Industry experts are expecting more business deals to be established in the coming years.
