Summary of Key Points
This article uses the story of the film "Welcome to Long Restaurant" as a backdrop and combines real-life examples to outline the "survival guide" for Chinese companies and entrepreneurs entering the Middle East market. They must overcome numerous local barriers, such as adapting to different tastes, complying with policies, and managing cultural differences. At the same time, they can adopt a neutral stance to find safe havens during conflicts and seize market opportunities driven by regional transformations. However, the risk of war remains constant—a reminder that business and danger are always intertwined.
The First Challenge: Adapting to Local Rules Instead of Relying on "Authenticity"
In the film, Xu Fu's dishes are criticized for not being sweet enough, a seemingly trivial issue that actually highlights the first common mistake made by companies entering this market: what you consider authentic may not be what locals prefer. In reality, the entrepreneur Liu Lei successfully adapted his recipes to suit the preferences of American soldiers, which helped him establish a foothold. More challenging are the strict policy requirements. For instance, Saudi Arabia requires that 85% of employees in financial industries must be local; however, local workers often have low productivity (leaving work at 3-4 PM or not working during Ramadan), forcing many Chinese companies to hire Pakistani workers on paper while paying them salaries and using fake IDs for inspections.
Overcoming Contractual Disparities
Domestic practices of winning bids with low prices and then negotiating relationships do not apply in the Middle East. Owners often draft contracts that are unfavorable to contractors, such as removing clauses allowing for compensation. A school project suffered a $70 million loss due to frequent design changes by the client and inadequate risk assessment.
Maintaining Neutrality: Finding Safe Havens in Conflicts
The Long Restaurant in the film becomes a neutral place where both American soldiers and locals gather, reflecting the strategy of Chinese businesses in the Middle East: staying neutral and finding space among conflicting parties. This approach is evident in Fujianese noodle sellers in the Amazon rainforest, whose products are purchased by both poachers and gold miners, or in Chinatowns in the United States, which serve as buffer zones affecting surrounding real estate prices.
Beyond Oil: Diverse Market Opportunities
The Middle East is moving away from its reliance on oil. Initiatives like Saudi Arabia's "Vision 2030" and the UAE's "Future 50 Years Strategy" are promoting the digital economy and new technologies, presenting opportunities for Chinese companies:
- New Consumer Trends: A smart coffee machine factory in Shunde originally targeted European and American markets but found that 60% of its revenue came from Middle Eastern customers with higher average spending per purchase.
- Penetration of Chinese Products: Saudi Arabian cafes use beans purchased from Alibaba, control systems from Huawei, and vehicles from Geely—owners proudly claim to be more "Chinese" than the Chinese themselves.
- Engineering Contracts: Chinese contractors account for over 30% of the $350 billion in Middle East and North Africa's engineering market.
The Double-Edged Sword of Business
While opportunities exist, so do risks. Wars can significantly impact business operations. For example, in March this year, the cost of war insurance for Middle Eastern shipping routes increased from $100 per container to $2,000-$4,000 (a 30-fold rise), with some insurers even canceling coverage. The UAE is China's largest export market in the region, and disruptions to port operations or shipping schedules can have a devastating impact on businesses. Chinese merchants who stay in the Middle East face additional challenges, such as the psychological trauma caused by bombings.
In Conclusion
Entering the Middle East is like "dancing on the edge of a knife": companies must adapt to local rules, maintain neutrality, and withstand the risks of war. Yet with the right approach, this region remains a promising market with significant potential.