HM’s China visit opens new growth avenues

MUSCAT, NOV 1
His Majesty Sultan Haitham bin Tarik’s state visit to China could help broaden economic cooperation beyond oil into manufacturing, artificial intelligence and renewable energy, Wenkang Lyu, Distinguished Research Fellow at Soochow University, said in an exclusive interview with Observer.
Lyu said the next stage of bilateral relations could bring together the Sultanate of Oman’s energy resources, capital and strategic ports with China’s manufacturing capacity and technological expertise, supporting investment and economic diversification.
His Majesty’s November 1–2 visit, at the invitation of Chinese President Xi Jinping, comes as Oman implements its Eleventh Five-Year Development Plan, placing manufacturing, tourism and the digital economy at the centre of its growth agenda.
“The strategic intersection is therefore increasingly clear: China’s new quality productive forces require international platforms for industrial deployment, while Oman’s economic diversification requires technology, investment and industrial capacity,” Lyu said.
The relationship already rests on substantial commercial flows. Bilateral trade reached approximately RO 5.4 billion in the first seven months of 2026, while Chinese direct investment in Oman stood at RO 903.8 million at the end of the second quarter, according to official figures.
Lyu said future cooperation could increasingly involve combining energy, infrastructure, technology and capital to develop industries within Oman, expanding the relationship beyond commodity trade.
Oman’s ports and position connecting Asian, African and European markets could support this transition, while Chinese machinery, industrial systems and investment could help increase the technological sophistication of domestic production, he said.
The five-year plan targets average real economic growth of around 4 per cent and envisages RO 15.6 billion in additional investment. It sets growth targets of 5.9 per cent for manufacturing, 10.8 per cent for the digital economy and 5.7 per cent for tourism.
Artificial intelligence could become an important link between Oman’s energy strengths and its ambitions to develop higher-value industries, according to Lyu.
Electricity generated from energy resources could power data centres, creating computing capacity that businesses could deploy across manufacturing, logistics, ports and energy operations. In his assessment, this would provide another route for converting energy resources into wider economic value.
“Energy may therefore acquire a new value form: energy becomes computing power, and computing power becomes industrial competitiveness,” he said.
Oman’s digital economy accounted for 9 per cent of gross domestic product, according to a survey announced with the launch of the National Digital Economy Programme’s second phase.
The 2026–2030 programme targets a RO 1.5 billion GDP contribution, RO 300 million in technology investment and 3,000 direct jobs annually through digital initiatives.
Lyu identified investment as a critical channel for translating these opportunities into industrial activity.
He cited China–Oman Joint Committee discussions on an integrated renewable-energy industrial supply-chain park and smart warehousing and distribution centres in Duqm, Sohar and Salalah as examples of potential cooperation.
Such developments could connect renewable-energy facilities, data centres and logistics infrastructure with manufacturing, energy storage and green hydrogen projects serving the Gulf, Indian Ocean and African markets, he said.
“The next phase of China–Oman cooperation may consequently be defined less by the expansion of trade alone than by a transformation in the structure of investment,” Lyu said.
He said the potential benefits would depend on effectively aligning Chinese industrial and technological capabilities with Oman Vision 2040 and the country’s diversification priorities.
For Oman, the opportunity would be to attract productive capacity and technology alongside capital, strengthening domestic industries and broadening the economic benefits of its energy and logistics assets.
Lyu said this could give bilateral relations a broader foundation, with future cooperation increasingly centred on jointly developing industrial capabilities and generating higher value from investment, infrastructure and technology.