In light of recent developments, here’s an updated version of the article:
(Bloomberg) — Saudi Arabia’s Crown Prince Mohammed bin Salman is set to embark on a rare foreign trip, travelling to Japan later this month. The De facto ruler’s meeting with Japanese Prime Minister Fumio Kishida is scheduled from May 20 to May 23, as revealed by the Japanese government on Friday.
The relationship between Saudi Arabia and Japan is economically substantial; Saudi Arabia ranked as Japan’s eighth-largest trading partner in 2021, according to the International Monetary Fund, with bilateral flows totalling $42 billion. Japan is also a major purchaser of crude oil from Saudi Arabia, while the latter’s sovereign wealth fund holds a considerable stake in Nintendo Co., a prominent video game company.
Furthermore, Saudi Arabia and Japan have signed the “Saudi-Japan Vision 2030” accord, designed to facilitate Japanese businesses investing in industries such as healthcare, energy, and infrastructure within Saudi Arabia. The broader Vision 2030 initiative spearheaded by Prime Mohammed intends to restructure Saudi Arabia’s economy by pumping hundreds of billions of dollars into various sectors, including tourism, electric cars, and semiconductors.
MBS was earlier scheduled to visit Japan towards the end of 2022, but the trip was called off just before his arrival.
As Saudi Arabia seeks to diversify its economy beyond fossil fuel exports, it is placing greater emphasis on emerging technologies. A $100 billion fund has been established to finance these initiatives. Saudi Arabia’s technology sector is still in its fledgling stages, with the local market for cloud services estimated at roughly $4 billion, compared to over $200 billion in the US and approximately $100 billion in China.
China is the world’s foremost oil importer, and for many years, nations in the Middle East, particularly Saudi Arabia, have prioritized their relationships with China primarily to secure a crucial client. However, in contrast, China’s exports to the area have remained comparatively modest. Nevertheless, that may alter.
Many Chinese tech giants, including food delivery colossus Meituan, are currently expanding globally, with Saudi Arabia chosen as their initial overseas expansion location outside China. This decision signifies the significance of the Middle Eastern region for Chinese companies as they seek to broaden their footprints internationally. Other Chinese tech organizations, such as Tencent, are also reportedly looking to expand their cloud computing operations and invest in data storage in Saudi Arabia. Shein, a fast-fashion and e-commerce enterprise, has recently increased its presence in Saudi Arabia by hosting fashion shows and organizing its inaugural reality program in the country.
The timing is favourable for Saudi Arabia’s efforts to grow beyond its reliance on fossil fuels, given that it is becoming increasingly committed to investing in emerging industries like artificial intelligence (AI). In 2021, Saudi Arabia established a $100 billion fund to support such initiatives. The country’s local market for cloud services is presently valued at roughly $4 billion, considerably smaller than the US’s cloud services industry, which is worth over $200 billion, and China’s, which is estimated to be around $100 billion.
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(Reporting by Rania El Gamal and Maiya Keidan in Dubai and Yukako Manekawa in Tokyo)
Based on the text material above, generate the response to the following quesion or instruction: How does Saudi Arabia’s move to invest in emerging industries like AI fit into the broader economic vision outlined by Crown Prince Mohammed bin Salman, and what impact might this have on the country’s economy?
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