China and Hong Kong’s Bilateral Trade and Investment Outlook with Qatar

Posted by Written by China Briefing Team Reading Time: 11 minutes

As the FIFA 2022 World Cup kicks off in Qatar, we discuss the country’s bilateral trade and investment relations with China and Hong Kong. China has been heavily involved in Qatar’s infrastructure expansion, including building the Lusail Stadium for the 2022 World Cup. Besides Qatar’s support for the Belt and Road projects, mainland China’s free trade negotiations with the GCC grouping (of which Qatar is a member) took a positive turn in 2022. Beijing is also seeking closer cooperation in strategic fields like remote medical care, online learning, 5G, and big data.

China and Qatar have an important strategic relationship that goes back over four decades. The past 10 years has seen an increase in Chinese investment into the Arab Gulf states, which play an important role in the Belt and Road Initiative (BRI). The Gulf nations are becoming increasingly close trade and investment partners with China.

Qatar, as one of the richest and most well-developed countries in the region, is a key player in the development of regional cooperation with China and has been actively promoting collaboration with both mainland China and Hong Kong to enhance business and investment opportunities.

As the FIFA 2022 World Cup kicks off in Qatar, we look at China’s trade and investment relations with the Gulf country, which include investments in the World Cup infrastructure.

Mainland China-Qatar relations

Mainland China and Qatar first established diplomatic relations in 1988. The two countries have developed strong bilateral relations in the decades since and today, China is one of Qatar’s largest trading partners, while Qatar is one of China’s major sources for petroleum imports.

Over the past 10 years, China and Qatar have rapidly solidified bilateral relations. China has continued to increase investment in Qatar, with significant stakes in several major Qatari projects, including high-profile projects such as the Lusail Stadium for the 2022 FIFA World Cup. Bilateral trade has also continued to see strong growth, reaching a new high in 2021.

China has made efforts to increase investment and cooperation with members of the Gulf Cooperation Council (GCC), of which Qatar is a member. A possible China-GCC free trade agreement (FTA) has undergone several rounds of negotiation and have reportedly recently seen new breakthroughs.

Hong Kong-Qatar relations

China’s Special Administrative Region of Hong Kong has separately developed relations with Qatar since sovereignty of the city was returned to China after British rule in 1997. In 2013, Qatar and Hong Kong signed a double taxation avoidance (DTA) treaty to enhance protections for investors and boost business exchange between the two regions. Bilateral relations have continued to develop with the establishment of a Qatari General Consulate in Hong Kong in 2014.

In 2019, Invest Hong Kong (InvestHK) and the Qatar Financial Centre Authority signed a Memorandum of Understanding (MoU) to promote bilateral investment. Meanwhile, the Qatar Chamber has also held events in Hong Kong to explore business opportunities and develop cooperation and bilateral investment as recently as October 2022.

Mainland China-Qatar bilateral trade

Since 2018, China has overtaken the US to become Qatar’s top supplier of products and services, while Qatar’s exports to China increased by more than 60 percent year-on-year. In 2021, the bilateral trade volume between Qatar and China reached US$17 billion, a 57 percent growth over the previous year. In the first three quarters of 2022, China exported US$3.0 billion and imported US$16.49 billion from Qatar, resulting in a negative trade balance of US$13.49 billion.

Mainland China-Qatar Bilateral Trade 2017-2021 (billion US$)
 Year Trade in total Export from mainland China to Qatar Import from Qatar to mainland China
2017 8.08 1.68 6.4
2018 11.63 2.48 9.15
2019 11.12 2.41 8.71
2020 10.94 2.63 8.31
2021 17.17 3.96 13.21
Source: National Bureau of Statistics, China

The bulk of Qatar’s exports to China are primary resources, which make up four of the top five export products. Exports of mineral fuels and oils amounted to US$11.7 billion in 2021.

Top 5 Products Exported from Qatar to China in 2021
Product category Amount (million US$)
Mineral fuels, mineral oils and products of their distillation; bituminous substances; mineral wax 11,782.2
Plastics and articles thereof 767.6
Inorganic chemicals; organic or inorganic compounds of precious metals, of rare-earth metals, of radioactive elements or of isotopes 223.3
Copper and articles thereof 141.7
Salt; sulphur; earths and stone; plastering materials, lime and cement 106.9
Source: ITC Trade Map

Meanwhile, China’s top exports to Qatar are machinery, mechanical appliances, and nuclear reactors, which amounted to US$553.6 million in 2021.

Top 5 Products Exported from China to Qatar in 2021
Product category Amount (million US$)
Machinery, mechanical appliances, nuclear reactors, boilers; parts thereof 553.6
Vehicles other than railway or tramway rolling stock, and parts and accessories thereof 538.9
Electrical machinery and equipment and parts thereof; sound recorders and reproducers, television image and sound recorders and reproducers, and parts and accessories of such articles 521.2
Furniture; bedding, mattresses, mattress supports, cushions and similar stuffed furnishings; lamps and lighting fittings, not elsewhere specified or included; illuminated signs, illuminated nameplates and the like; prefabricated buildings 352.7
Articles of iron or steel 248.3
Source: ITC Trade Map

Hong Kong-Qatar bilateral trade

Since the 20th century, Qatar has been a significant trading partner for Hong Kong in the Middle East. Over the past 25 years, the exports of Hong Kong to Qatar have increased at an annual rate of 15.8 percent, from US$15.5 million in 1995 to US$603 million in 2020.

In 2020, Hong Kong exported US$603 million worth of goods to Qatar. The three largest exports were gas turbines (US$470 million), non-knit men’s coats (US$39.2 million), and gold (US$22.3 million).

Over the same period, Hong Kong’s major imports from Qatar were refined petroleum (US$247 million), gas turbines (US$167 million), and jewelry (US$135 million).

Mainland China’s investment in Qatar

China is heavily involved in Qatar’s infrastructure expansion, contributing significantly to the development of the Hamad Port in Doha, the Lusail Stadium for the 2022 FIFA World Cup, and other infrastructure projects all around the nation.

In 2020, China completed a total of US$423.44 million worth of projects in Qatar, following a trend of slight decline in investment volume, which had seen its peak in 2017 totaling US$1.03 billion.

Mainland China’s Underwriting Projects in Qatar 2017-2021
Turnover of Chinese underwriting projects completed in Qatar (million US$) China year-end outstanding dispatched labor in Qatar for the underwriting projects (person)
2017 1033.68 1,855
2018 727.39 1,763
2019 506.86 1,204
2020 423.44 413
2021 NA NA
Source: National Bureau of Statistics, China

Development of the Hamad Port

In 2018 the China Harbouring Engineering Company (CHEC), and QTerminals, the company in charge of running Qatar’s Hamad Port, co-signed an MoU aimed at benefiting both countries’ regional economic activities, including China’s BRI and Qatar’s National Vision 2030. The MoU involves Phase 2 of the expansion of the Hamad Port, which is Qatar’s national port and thus a pivotal infrastructure for the country’s development and trade.

CHEC is a top provider of services in engineering-procurement-construction (EPC), build-operate-transfer (BOT), and public-private-partnership (PPP), with both the public and private sectors. The company is involved in several projects across all infrastructure fields, such as marine engineering, roads and bridges constructions, municipal works, environmental and hydraulic engineering, among many others.

The 2022 FIFA World Cup Lusail Stadium

In 2016, China Railway Construction Corp won a contract worth US$764 million to construct a stadium for Qatar’s hosting of the FIFA World Cup Qatar 2022™ (2022 World Cup). The Lusail stadium, which is the official location of the opening and championship games of the 2022 World Cup, is the product of a joint venture between the Chinese state-owned enterprise (SOE) and the Qatari builder HBK Contracting.

Situated in the seaside city of Lusail, a planned metropolis north of Doha, the national stadium has become one of the city’s spotlights. With 45,000 square meters of membrane, the 92,000-seat facility is the largest membrane-structure building in the world.

Qatar’s investment in China

Comparatively speaking, Qatar’s investment in China is relatively small. After participating in a US$2.8 billion cornerstone investment in the 2010 initial public offering of the Agricultural Bank of China, in 2014, Qatar’s sovereign wealth fund announced a US$10 billion investment venture with China’s Citic Group to expand in the Chinese real estate and infrastructure markets, and set up a US$10 billion fund to invest in China’s healthcare, infrastructure, and real estate sectors.

The role of Qatar in China’s Belt and Road Initiative

The Gulf countries’ position on China’s BRI has typically been centered on regional partners, building projects, and energy, in addition to being essential nexus locations for commerce in emerging countries. Qatar was among the first countries to support China’s BRI vision. In 2019, following a visit of Sheikh Tamim bin Hamad Al Thani  to China, Qatar signed several more agreements with Beijing to enhance its participation in the already numerous projects along the BRI.

Hong Kong-Qatar investment

In order to further their mutual cooperation on exchanges and support for investment promotion, InvestHK and the Qatar Financial Centre Authority signed a MoU in 2019, adding to the 2013 Comprehensive Double Taxation Agreement between the two jurisdictions.

In October 2014, Qatar’s sovereign wealth fund invested HK$4.78 billion (US$616 million) in a 19.9 percent stake in Sogo department store operator Lifestyle International Holdings, as its third luxury department store investment in four years.

Other engagements between China and Qatar

Financial cooperation

In an effort to boost trade and investment between China and the economies of the Gulf Arab states, in 2015, Qatar inaugurated the first clearing house for Chinese yuan transactions in the Middle East. Industrial and Commercial Bank of China’s (ICBC) Doha branch acts as the clearing bank for the center. The specific role of the clearing bank is to manage every aspect of a currency transaction – cutting the trading costs and time in half.

By fostering already-existing ties with China, Qatar can gain from the Chinese yuan’s internationalization as well. Doha is benefiting from the plan and growing as a regional and global financial hub. As Qatar’s trade with China continues to grow, the country is trying to diversify some of its substantial foreign reserve holdings away from US dollars. Investors in Qatar and the Gulf also have access to new financial products with the Chinese yuan as the unit of currency of exchange.


Qatar provides more than 20 percent of China’s needs for natural gas, making it the second-largest supplier to the country. Qatar Petroleum, the Qatari state-owned oil and gas enterprise, has joint ventures with several Chinese companies in oil exploration, production, and refining projects in both China and Qatar.

In May 2021, Qatar Energy (then Qatar Petroleum) signed a 10-year agreement with China’s Sinopec to provide two million tons of liquified natural gas (LNG) per year. In November 2022, Qatar Energy then inked a second LNG agreement (the company’s longest to date) to provide LNG to Sinopec in China over a 27-year period, as the uncertainty of unstable markets worldwide pushed purchasers to seek out long-term contracts.


Security is an increasingly important dimension of the China-Qatar relationship. At the International Criminal Police Organization (INTERPOL) summit held in Beijing in September 2017, Chinese Minister of Public Security at the time, Guo Shengkun, and Qatari Major General Saad Bin Jassim Al Khulaifi met to discuss counterterrorism cooperation. Following the summit, both countries signed a pact that formalized cooperation between Doha and Beijing in the fight against terrorism in the Middle East and the Asia-Pacific area as well as strengthened coordination between Qatar and China.

Qatar is also becoming a profitable market for the transfer of Chinese military technologies. Beijing’s strong participation in the 2014 Doha International Maritime Defense Exhibition saw Qatar purchase weapons valued at US$23.89 billion from various defense partners.

Major trade and investment agreements

Mainland China-Qatar

Bilateral investment treaty

China has an active bilateral investment treaty (BIT) with Qatar, which took effect in 2000. The BIT guarantees treatment to investors from the other contracting country that is equal to that afforded to investors in their own country. It also includes a most-favored-nation (MFN) clause, which requires the contracting parties to extend the same treatment to the other contracting party as they do to all other trade partners.

Under the China-Qatar BIT, “investments” that are protected include (but are not limited to):

  • Movable, immovable property and other property rights such as mortgages and pledges;
  • Shares, stock and any other kind of participation in companies;
  • Claims to money or to any other performance having an economic value;
  • Copyrights, industrial property rights, know-how and technological process; and
  • Concessions conferred by law, including concessions to search for or exploit natural resources.

Meanwhile, the investors that are protected under the BIT include:

  • Chinese and Qatari nationals;
  • Economic entities established in accordance with the laws of the PRC and domiciled in the territory of the PRC;
  • Legal persons, including companies, general corporations, public organizations, public and semi-public entities constituted in accordance with Qatari laws and domiciled in the territory of Qatar; and
  • The Government of the State of Qatar.

The BIT includes clauses on compensation for damages and loss, and dispute mechanisms, including neutral arbitration in an international court. In addition, the BIT guarantees investors of both countries the right to transfer their investments back to their home country. It also prohibits both contracting countries from expropriating or nationalizing the assets of a foreign company within its jurisdiction, except for when there are extenuating domestic needs to do so and it is done against fair compensation.

For more information on how investors can benefit from China’s BITs, see our article here.

Double taxation agreement

China and Qatar entered into a double taxation agreement (DTA) in 2008. The Chinese taxes covered by the DTA are:

  • Individual income tax (IIT)
  • The income tax on enterprises with foreign investment and foreign enterprise

Meanwhile, the Qatari taxes covered by the DTA are taxes on income. There is no individual income tax (IIT) levied in Qatar for either local residents or foreigners, but foreign companies are generally required to pay a 10 percent corporate income tax (CIT) rate on income derived in Qatar.

Under the DTA, business profits are only taxable in the country in which the company has a “permanent establishment”, unless it is simultaneously resident and carrying out business in the other party’s territory. If the company is established and carries out business in both countries, the profits derived in each country are taxable by the respective country. Companies thus are not required to pay profits tax in both countries.

The DTA states that “permanent establishment” includes companies that have:

  • A place of management;
  • A branch;
  • An office;
  • A factory;
  • A workshop;
  • A farm or orchard;
  • A mine, oil or gas well, quarry, or any other place of exploration, extraction, or exploitation of natural resources; or
  • A building site, construction, and assembly, or an installation project or supervisory activities in connection therewith, but only where such site, project or activities continue for a period of more than nine months.

Profits derived from international shipping are only taxable in the country in which the head office of the company is located. If the place of the head office is aboard a ship, then the country is deemed to be the one in which the ship’s home harbor is.

See our China country portal for an overview of Chinese taxes and regulations on residence and incorporation.

China-GCC free trade agreement

China has been in long-running negotiations on a potential free trade agreement (FTA) with the Gulf Cooperation Council (GCC), which has the six Arab Gulf states as its members – Saudi Arabia, Bahrain, Kuwait, UAE, Qatar, and Oman.

Negotiations were ground to a halt after nine rounds of talks due to a series of diplomatic headwinds. However, following a visit by GCC representatives to Wuxi, Jiangsu province in January 2022, China and the GCC pledged they would conclude negotiations on the FTA, with no specific timeline given. Previous negotiations have focused on energy-related products, though not exclusively. Other products, particularly those related to agriculture, fruits, spices, building materials, and lastly, trade in services, are being taken into consideration.

Hong Kong-Qatar

Double taxation agreement

Hong Kong has an active DTA with Qatar, which went into effect in 2013. The Hong Kong taxes covered in the DTA are:

  • Profits tax;
  • Salaries tax; and
  • Property tax.

Meanwhile, the Qatari taxes covered by the DTA are taxes on income. Business profits are subject to the same conditions as in the China-Qatar DTA, meaning they are only taxable in the country in which the company has a “permanent establishment”, and profits derived in each country is only taxable by the respective country.

In addition, profits derived from international shipping or aircrafts are only taxable in the company’s or individual’s home country. That means if a Hong Kong resident derives profits from international shipping, those profits will not be taxable in Qatar, and vice versa.

The DTA states that “permanent establishment” includes companies that have:

  • A place of management;
  • A branch;
  • An office;
  • A factory;
  • A workshop;
  • A sales outlet; or
  • A farm or plantation, or a mine, oil or gas well, quarry, or any other place of exploration, extraction, or exploitation of natural resources.

For information on Hong Kong’s tax regime and residence, see our regional portal here.

Memorandum of Understanding

In 2019, InvestHK and the Qatar Financial Centre Authority signed an MoU to promote investment cooperation. The MoU seeks to attract more direct investment from each other’s jurisdictions and create more business opportunities.

According to InvestHK, Hong Kong and Qatar “will share information and experiences in investment promotion, encourage interested local companies to set up or expand their business within the area of the other jurisdictions, and support each other’s investment promotion events that foster bilateral investment between the two jurisdictions.”

WTO agreements

China, Hong Kong, and Qatar are all WTO members, which by extension makes them all party to a range of multilateral agreements on trade and investment. These treaties include:

  • The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), which requires WTO members to extend intellectual property (IP) rights to the IP owners in any member state or region. It includes a most-favored-nation (MFN) clause, guaranteeing equal treatment for IP rights protection for all member countries and regions, and offers dispute resolution and compensation mechanisms.
  • Agreement on Trade-Related Investment Measures (TRIMs), which prohibits members from implementing investment measures that have the effect of restricting trade with other members, such as local content requirements (requirements for a company to use locally-produced goods or local services in order to operate in the market).
  • General Agreement on Trade in Services (GATS), which guarantees MFN status to service providers of any WTO member (except governmental services such as social security schemes, public health, education, and services related to air transport).

Future outlook

Relations between Qatar and China are currently at an all-time high, and the two nations strategically cooperate in key sectors, such as energy, security, and investment in infrastructure and healthcare.  China is looking to collaborate closely with Qatar to advance connectivity, building a “fast track” for people exchanges, and a “green channel” for bilateral trade to create a stable foundation for the economic expansion of both countries. In particular, the Chinese government anticipates bilateral projects to receive additional momentum as Beijing seeks closer cooperation in strategic fields, such as remote medical care, online learning, 5G, and big data.

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