Fadye Saud Alfayad
This research report focuses on wholly foreign owned enterprises or WFOE in China as part of China’s overall policy of economic reform referred to as Kai Fang. The contention is made that WFOE were an integral part of China’s economic reform following the conclusion of the Cultural Revolution and the death of Mao Tsetung. As such, the assertion is that this successful inclusion of the WFOE into China’s economic reform framework can be applied to Saudi Arabia and its own economic reform initiatives away from petroleum dependence. This research report first describes the Mao era in China and its ill-advised economic policies. The discussion this shifts to Kai Fang and its economic policies that were devised to diversify China’s economic apparatus from a centralized, state-owned infrastructure to a distributed, privatized system of ownership. Consequently, these lessons are then grafted onto Saudi Arabia’s own economic policies as a means to identify areas in which it can utilize WFOE more successfully. One of the key areas in which this analysis takes place is in the retail sector of China’s economy where it has experienced the most success. Much of this success in China as well as for Saudi Arabia is observed to be in the still emergent online retailing sector. The conclusions are such that Saudi Arabia can benefit immensely from WFOEs just as China did but especially within the retail sector where online retailing and its upstream components can rapidly diversify an economy