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China in the Middle East: Testing the Waters, Linking the Lands

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China Power

China in the Middle East: Testing the Waters, Linking the Lands

As Beijing’s interests in the Middle East expand, its attention to security and politics may need to expand as well.

China in the Middle East: Testing the Waters, Linking the Lands
Credit: Pixabay

When looking at the multiple conflicts and crises that convulse the Middle East today, China rarely seems to play a major role. Whether it is the fight against ISIS, the conflict in Libya, the standoff surrounding Qatar or the war in Yemen, China does not appear to have a major stake in any of these issues.

But perceptions can be deceiving. Indeed, China is already significantly economically invested in many countries in the region, and has already surpassed the EU, Russia and the United States as the most important trade partner in several countries. The further rollout of China’s now famous Belt and Road Initiative (BRI) is only expected to further boost China’s economic ties to the region. But with economic interests come political and security interests. The question is then to what extent China is willing and able to become more politically involved in what has time and again proven to be a veritable hornet’s nest.

In a way, China’s involvement in the region is not a matter of choice but an issue of necessity. After all, about half of Beijing’s oil imports originate from the Middle East, with most of it being sourced from Gulf countries. What is more, China has a big interest in consolidating, if not expanding, its trade ties with the region.

As things stand, China is still a relatively minor actor in north Africa, where mutual trade with Egypt in 2015 was still a modest $12.9 billion. Trade ties across the southern rim of the Mediterranean is still dominated by EU countries. In the eastern Mediterranean, China’s economic presence is already felt more. Here, Turkey stands out as the most important trade partner ($21.6 billion, 2015). Perhaps more interesting is that China is also by far the most important trade partner for Syria, being responsible for over 50 percent of the country’s trade (2015). Basically, this is because, even if Beijing’s total trade with Damascus declined since 2011, its share only grew as trade with the U.S., EU and Russia dramatically decreased. In 2015, China-Israel bilateral trade rose to an impressive $11.4 billion.

China’s largest economic footprint is in the Gulf region. Unsurprisingly perhaps, the size of total trade is the largest with Saudi Arabia ($52 billion, 2015). This is the largest bilateral trade relationship Beijing enjoys across the Middle East. The second largest in this subregion is with the United Arab Emirates (UAE, $48 billion), with Iran coming in third place ($34 billion). In particular in this part of the region, China is also engaged in some large-scale infrastructure initiatives, examples being nuclear plants which it is helping to build in Iran as well as a new metro system for Riyadh.

But expanding economic ties are bound to have political implications too. For China will have an even bigger interest in the protection of key sea lines of communication (SLOCs) and for the most part will have to deal with governments, not the private sector, as it rolls out its infrastructural projects.

Last but not least, part of the two-way trade consists of arms trade. In this regard, China is known to have sold arms to the worth of hundreds of millions of dollars to Syria, Yemen, Iraq and Iran. However, for now China is still a relatively small player in arms trade with the Middle East. For instance, between 2012-16, it was only responsible for 0.12 percent of arms imports into Saudi Arabia, 0.1 percent to Egypt and the UAE, less that 0.4 percent to Iraq, 0.7 percent to Turkey, and 12.3 percent to Iran. Still, the trade deal concluded last year with Saudi Arabia which includes the purchase of drones is likely a harbinger of much bigger sales figures to the region in years to come.

In all, it is thus inconceivable that in its relations with Middle Eastern countries, China will be able to steer clear of political controversy. Obviously, Beijing hopes that it can bank on its reputation free from imperial overtones. Indeed, China emphatically speaks of “restoring” the old Silk Road, thus underlining that it had been absent from the region for centuries. What is more, the closest thing that amounts to a strategy towards the Middle East, the 2016 Arab policy paper, proclaims “mutual non-interference in each other’s internal affairs” as a cornerstone of China’s regional approach. It is one thing of course to deploy military force as a means of intervening. But strengthening strategic relations, whether economic, political or security-related, all amount to forms of interference which other countries can take issue with. It is thus not in China’s hands to make that determination.

Nevertheless, China seems to have adopted a cautious approach, the objective being to keep all key actors as friend, or at least, not to make any implacable enemies. China’s quiet involvement in the Iran nuclear deal is one example of course, but Beijing has also made forays into regional diplomacy, most prominently in proposing two four-point plans to resolve the Israel-Palestine and Syria conflicts, respectively. And when visiting Saudi Arabia and Iran on a single trip to the region in January 2016, Chinese President Xi Jinping studiously refrained from taking sides between the two countries as a result of the execution of Nimr-al Nimr. More recently, China undertook both a joint naval exercise with Iran and a counterterrorism exercise with the Saudi’s, appearing to want to maintain a painstaking equilibrium.

There are various risks associated with this approach. One is that as it becomes more involved also security-wise, China is bound to affect the interests of the United States and Russia too. A number of analysts have pointed out that China is not interested in supplanting the United States as the key outside security actor basically because it saves China from having to invest in such efforts, and also because not all regional powers would be happy to substitute China for the United States, in spite of whatever doubts may exist concerning Donald Trump. Hence, Russia may actually become more nervous as its foray into the region through Syria may be running into a flood of Chinese investments — in particular if China comes to initiate large-scale infrastructure projects for the rebuilding of Iraq and Syria post-ISIS and link these to the BRI.

Traditionally, one solution to preventing great powers from clashing was to create “spheres of influence,” reminiscent of the Anglo-Russia treaty that concluded the “Great Game” or the Sykes-Picot agreement. However, confining itself to engaging only with some countries and not others is not consistent with the BRI, nor is it likely to be a strategy of choice for the Gulf states and others who seem to want to keep their options open. Finding ways to co-exist with the United States and Russia in the security sphere is thus the most that can be achieved by China for now.

Another risk follows from being forced to pick sides. Most obviously, this is the case when it comes to Saudi Arabia and Iran, especially if Riyadh and Tehran feel that they can turn to Washington or Moscow, respectively. Picking the “wrong” horse is more easily done than might appear. Making this even more delicate is that countries can switch sides, thus creating possible adversaries from one day to the next. The Qatar crisis provides one example, but volatility in relations between Saudi Arabia and Iraq, Turkey and Israel, or Turkey and Iran show as well that it is difficult to bet on who can be long-term friends in the region.

Another risk resides in China’s insistence on promoting stability in the region — de facto, the stability of the region’s regimes. In the wake of the Arab revolutions, close association with repressive regimes can have long-term consequences. British and American support of the Shah in Iran, and American support for Hosni Mubarak are only some examples where outside powers paid the price of losing influence as well as credibility in dealing with Middle Eastern states. Former U.S. Secretary of State Condoleezza Rice once said that the United States had “pursued stability at the expense of democracy (…) and achieved neither.” China could face a similar backlash in the long term if it pursues stability whilst disregarding democratic impulses. In some African countries, China already had to change its tune following public resistance to its heavy-handed investment approach. If oil prices remain low and countries in the Gulf and elsewhere need to adjust, popular criticism of the sitting powers can also reflect negatively on China.

Finally, China will have to tread carefully when it comes to dealing with extremism. Over a hundred Uighurs are said to have joined ISIS ranks over the past few years, and it is in China’s interest not to inflame the Islamic inhabitants of Xinjiang. However, when supporting the Palestinians for instance — a people under occupation that vies for independence — could send interesting signals to the people in Xinjiang. In general of course, China will not want to support any separatist movements, but economic interests such as that of SINOPEC in Kurdistan might militate in another direction. In general, visible support to Iran at the expense of Sunni Muslim countries can go down badly among Xinjiang’s largely Sunni Muslim population.

China will hope that its massive economic investments channeled through BRI will be sufficient so as not to have to create a sizeable military presence in the region. It is not interested in arbitrating local disputes through the use of force, nor does it want to gain a reputation as the latest outside imperial power to impose its will on the region. Indeed, China’s military involvement in the region has been modest so far. The creation of a naval base in Djibouti is the most visible sign of Beijing’s regional presence. Also, China has UN peacekeepers on the ground in Lebanon and some military advisers in Syria but does not contribute to the anti-ISIS coalition. Thus, in the short term, China looks happy with pursuing trade under the US regional security umbrella.

In the future though, this situation is unlikely to persist. For one, the United States cannot be counted on to want to provide for the security of China’s BRI infrastructure. Secondly, increasing its military footprint if only for the sake of patrolling SLOCs — including far away from the mainland — is part and parcel of becoming a powerful country with global reach. Thirdly, China is likely to want to increase its military presence in the Middle East so as to create a corridor to secure its economic interests along the littoral stretching all the way to Africa.

Enlarging its military presence in the region of course brings new challenges and risks. How to placate India? How to coordinate — if at all — with the United States? And then there are risks relating to being a formally atheist power putting military troops in Islamic lands. Clearly, engaging with what is supposed to be a clean slate and pursuing economic win-wins only without political and security engagement is simply beyond reach in the Middle East. It requires China to come to terms with the complexities of the Middle East and to develop an even grander and clearer strategy on how it plans to engage with the region as a whole, including making some hard political choices. For if Beijing is not prepared to make such choices, others will.

Willem Oosterveld is a strategic analyst at the Hague Centre for Strategic Studies (HCSS), focusing on the Greater Middle East. Having studied in Paris, New York and at Harvard, he earned a PhD in history in 2011 from the Graduate Institute in Geneva.