The Saudi Public Investment Fund is close to pumping large investments in Chinese companies, after most of its foreign holdings have been limited to the United States and Europe, so far.
The $450 billion wealth fund has applied for a qualified foreign institutional investor license in China, according to what was reported by the Saudi "Al-Sharq" channel, on Friday.
The license will give the fund the ability to trade renminbi-denominated shares directly, rather than having to work through third parties.
The move towards China will make sense for Saudi Arabia, which is looking to develop economic relations through investment by its sovereign fund.
China is the Kingdom's largest trading partner, and the largest customer of Saudi Aramco, which is headed by the Governor of the Public Investment Fund, Yasser Al-Rumayyan.
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Many global investors are bracing themselves for troubled stocks in China, amid bets that the government's corporate regulatory reform has reached a peak.
The world's second-largest economy has also been an attractive destination for sovereign investors, with the Russian wealth fund diverting billions of dollars it owns into the yuan as part of an effort to make the country less vulnerable to sanctions.
The Public Investment Fund, which has not disclosed any investments in China, has ambitions to control $2 trillion in assets and become a global investment powerhouse.
Since unveiling a plan to transform itself from a dormant holding company focused on the domestic market five years ago, the fund's announced investments have been mostly in the United States and Europe.
His first major international deal was a $3.5 billion investment in Uber Technologies in 2016.
Most recently, he backed Lucid, a startup automaker, prior to its IPO through a deal with a special purpose buyout company.
And last March, with global markets collapsing amid the emergence of the Corona pandemic, the Public Investment Fund received $ 40 billion from the kingdom’s reserves to bet on a quick recovery of stocks.
The fund disclosed stakes worth $ 10.1 billion in companies listed in the United States, including "Walt Disney", "BP" and "Boeing", at the end of June of last year, and then sold most of them three months later with a rise in markets.
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