China: A Major Power in the Middle East?

This article was first published in War on the Rocks. It is republished here with permission.

Over the last decade, the United States has been drawn into a series of imbroglios in the Middle East and South Asia, sapping military and financial resources and frustrating policymakers who seem to have no good options for managing regional troubles. In Asia, by contrast, the picture is clearer. America has tangible economic, political and military interests there. The region is also where many believe America’s global superpower status faces the most obvious challenge: China. Thus, realists such as John Mearsheimer, writing in The National Interest, approve of the “pivot” or “rebalance.”

In Asia, America is trying to support its allies and preserve regional stability in the face of rising tensions and nationalist recrudescence, while avoiding unnecessary confrontation with China. The recent diplomatic conflicts over air defense identification zones and increasing confrontations over territorial disputes demonstrate that playing referee in Asia while protecting American interests is no easy task. While Asia deserves America’s focus and resources, the real dress rehearsal for China’s challenge to America’s superpower status is already taking place—in the Middle East. Here, Mearsheimer’s insistence on the need for Middle East retrenchment, in order to concentrate on the more serious rivalry with China, suffers from a major flaw in logic.

History suggests that when a great power draws down from a region, another takes advantage and fills the void. And indeed, as America grows weary of its involvement in the Middle East, China is filling the vacuum. As a result, states in that region are using relations with China to push back against America, with few economic or political consequences. Unfortunately, American policymakers seem blind to this fact, looking at countries such as Syria and Iran, or those in Asia, as discrete issues, rather than as constituent parts of the broader great game that is taking place.

Though China is not widely seen a major power in the Middle East, especially in the Gulf, it should be. Through its economic strength and power of attraction, the country has made major inroads that cannot be dismissed, and may be laying the key foundations for a new balance of power.

China’s “rise” has captured the imagination of many in the Arab world. Gulf rulers in particular stand in awe of how China’s economy has skyrocketed (see the chart below) while rejecting Western norms and maintaining its own political structures. So fast has China’s rise been that, since 2000, it has achieved practically 30 percent yearly average trade growth rate with Saudi Arabia and Kuwait, 26 percent with the UAE and Iraq, and 28 percent with Iran

Meanwhile, America’s trade with the Gulf is in decline. Total trade decreased by $6.3 billion from 2012 to 2013. While some gains were made, the losses include a $3 billion drop in trade with Saudi Arabia and a $6 billion drop with Iraq. A reduction in oil imports accounts for a majority of this, but U.S. exports to Bahrain, Iraq, Kuwait and Oman were also all down over this period. Chinese trade data for 2013 has yet to be reported, but based on these trends China has, or will this year, overtake America as the largest trading partner for every Gulf state.

Total Gulf Trade Comparison (in millions of dollars)

                                                                                                                                                                                                               Source: U.S. Census Bureau: U.S. Bureau of the Economic Analysis; National Bureau of Statistics of China

At the microeconomic level, Arabs and Iranians are becoming more aware of China in their daily lives. In Dubai, locals are increasingly shopping at the Dragon Mart, a mile-long mall where more than 4,000 Chinese vendors sell everything from basic goods to Qur’ans. Chinese motorcycles are commonplace, as are low-priced cell phones, cameras, shoes and cigarettes. China is even exporting large amounts of halal meat, raised and butchered in its Muslim-populated Ningxia region, to the Gulf.

Meanwhile, China has spent considerable time and energy wooing Gulf States with soft power. Beijing has provided no-strings development funding, as well as a CCTV station to broadcast news in Arabic favorable to Chinese views. It is also trying to appeal to Arab youth through Confucius centers in the region aimed at framing how these youth see China, while also offering a growing number of scholarships for students to study in China. China’s efforts have paid dividends. Recent polling showed that Arabs think China is the preferred global superpower: by 23 percent to America’s 7 percent.

Middle Eastern energy resources are seen as part of China’s core national interests, vital to its continued growth, domestic stability, and thus the very survival of the Communist Party. Like the U.S., China fears instability in the Gulf that could produce energy supply disruptions and price spikes. These fears were institutionalized after the 2003 Iraq War, when China’s leadership believed American policy was destabilizing the region’s energy markets. It was at this point that China began to develop long-term strategies that would initially help it to contain American influence in the Gulf, while it developed enough power to form a new multipolar balancing alliance with regional states to curtail American unilateralism.

China’s core aim is to constrain the United States without direct confrontation. Such confrontation is unlikely in certain key areas where Chinese aims overlap with those of America. Elsewhere, though, Beijing can be seen acting more as a direct competitor to the U.S. In addition, China has developed the ability to accomplish its goals partly through its own efforts, but more so by exploiting America’s missteps. Saudi Arabia is a case in point.

Saudi irritation at American foreign policy has provided an opening for China, whose support is not conditional on human rights reforms or democratization. America’s tentative decision to support the Arab Spring movement in Egypt—dislodging Mubarak who was considered a regional security pillar by the House of Saud—damaged relations. So too did the U.S. decision not to act against the Syrian regime.

While ties with America were fraying, Saudi Arabia reached out to China. Since 2009, the Kingdom has dramatically increased oil exports to help China and has awarded it half a dozen major projects on healthcare, energy exploration, mining, and railroad construction in the Kingdom, totaling more than $2 billion. So important is the burgeoning relationship with Saudi Arabia that King Abdullah’s first state visit after ascending to the throne was to China in 2006. The visit resulted in Saudi Arabia giving more help to China to develop an increased refining capacity for its oil. Since then, the Kingdom has also become the largest supplier of petrochemicals for Chinese textiles.

Not to be left out, Iran has made similar moves, awarding telecommunications contracts and construction projects to Chinese companies. Iraq, looking to regain its regional power status, is also opening up its oil fields to Chinese companies in order to increase revenues and develop stronger relations.

There are catches and traps, of course. While these agreements have helped China’s development, the Chinese are just starting to understand the phrase, “buyer beware.” China’s thrust into the region is presenting consequences and challenges that its foreign policy establishment does not wish, and may be ill equipped, to address. Like emerging international powers before it, China sees the dangers of the Gulf alliance quicksand, but may be unable to extricate itself. Each of the Gulf powers is trying to befriend the new kid on the block, pulling him to their side in the region’s playground politics.

While there have been disagreements about Iran and Syria, the Saudis continue to enhance Saudi-Sino relations because they see them as the tool by which to free themselves from American policies in the region. Riyadh wants America’s continued security backing, but with fewer conditions attached. It realizes that China is the vehicle by which it can square that circle, because China now provides it economic security.

This is not to over-hype the problems this poses for the United States. Rather than competing with China for resources, America’s abundance of shale oil means it need not fear China’s growing consumption. While China can now make it more laborious for America to operate in the Middle East, it cannot in the near term “balance” America in a traditional sense. America obviously retains tremendous power in the Middle East through its military and trade relations. Therefore, rather than fear China, it should point out China’s policy discrepancies with others in the region while at the same time engaging with it.

Ultimately, Beijing’s overall policy objective is the same as Washington’s: stability. Cooperation on a range of important regional issues should thus be possible. Indeed, China could actually be the missing piece of the puzzle that America seeks, giving it the opportunity to reduce its regional footprint while ensuring greater stability.

Either way, China’s growing status and power can no longer be ignored and must be factored into America’s strategic thinking about the Middle East. The unseen price of the Asia pivot is that, while America focuses on China in Asia, China is being provided the time and space in the Middle East to develop and implement a skillful challenge to American power.

Andy Polk can be contacted at [email protected].