Could Iraq Be Another Libya for China?


On June 13, Beijing’s Foreign Ministry spokesperson Hua Chunying declared that China is closely watching the events unfolding in Iraq and paying special attention to the protection of Chinese citizens and investments. Reading between the lines of that statement, it is possible to see Beijing’s fears that Iraq could become another Libya. Indeed, many elements make today’s Iraq dangerously similar to the situation in Libya in 2011.

First of all, there is the countries’ strategic importance for China’s energy security. According to the IEA, in 2011 around 3 percent of the oil imported by China came from Libya; Iraqi oil in 2013 accounted for some 8 percent of total Chinese crude imports. Second, Chinese companies have made significant investments in the energy and communication sectors of both countries. The Heritage Foundation’s Global China Investment Tracker shows that between 2007 and 2013, in Libya and Iraq were respectively invested $14.2 billion and  $14.5 billion. Third, besides economic assets and investments, a significant number of Chinese citizens are threatened by a rapidly escalating conflict. In 2011 China successfully evacuated around 36,000 of its citizens from Libya; according to the latest China Trade And External Economic Statistical Yearbook 2013, almost 10,000 Chinese live and work in Iraq.

Despite these similarities, Chinese military presence in the region has remained extremely small and it appears that Chinese armed forces can play only a very limited role, as in 2011. Andrew Erickson and Gabe Collins have highlighted in The Diplomat the fact that with the Chinese government apparently blind to the problem, many Chinese state-owned enterprises have turned their attention to a flourishing private security sector. They hope to fill the gap between Beijing’s huge economic footprint and the almost inexistent security support it can give to its companies and citizens in the region. Indeed, Erickson and Collins presciently noted that Iraq risked being a source of trouble for China.

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In a recent article published by the Chinese newspaper Global Times, a manager from Chinese companies working in Iraq said that his colleagues and he had not received any advice from the Chinese embassy in Baghdad. Many Chinese have already started to flee areas close to where Iraqi regular forces and ISIS militants are fighting. Should Chinese workers have to be evacuated, China will once again pay the price of not having the means to do so on its own, having to ask other nations’ help and/or using Chinese civilian ships and airplanes  in the region.

Despite these similarities with the Libya crisis, the outcomes this time are likely to be much more serious. Not only will a slowdown or halt in Iraqi oil production surely affect China and its companies, but the Chinese government faces criticism from its citizens over its inability to adequately protect them while abroad. Beijing has a difficult decision to make. It can opt to pay the economic and political cost of not beefing up its military presence in the region, despite public opinion. Or it can decide to increase the presence of PLA units and perhaps establish a military outpost in Djibouti or the Seychelles. In this case, however, both the U.S. and India will be likely to see such a move as a Chinese attempt to undermine their regional influence, contributing to tensions.

Libya before, and Iraq now, are two lessons for China about how difficult it is to do business in the Middle East without adequate experience and military support. How China responds to the dilemma will be crucial in determining future Chinese economic and military strategy in the troubled region.

Andrea Ghiselli has recently completed a master’s degree at the Peking University School of International Studies.

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