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The Limits on China’s Role in Syria

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The Limits on China’s Role in Syria

Damascus may be keen to seek Chinese funds to rebuild, but interest from Beijing and Chinese firms will be tempered by caution.

The Limits on China’s Role in Syria
Credit: Depositphotos

Last week, Syria’s President Bashar al-Assad was re-elected with 95 percent of the vote. He has been keen to portray the poll as a sign that the country is returning to normality after a decade of chaos and civil war. That is important if he wants to attract outside investment in order to rebuild the country.

Certainly, since the last presidential election in 2014, Assad has regained control over much of the country and its population, as shown by the fact that the number of registered voters has risen from 15.8 to 18.1 million. However, parts of the country did not participate, including the Kurdish autonomous region in the north and the opposition-held province of Idlib.

Assad’s victory was treated skeptically in Western countries, where officials have shared the Syrian opposition’s view that the poll was neither free nor fair. By contrast, Assad’s Russian and Iranian allies have endorsed the result. They were followed by Belarus and China.

The Chinese endorsement will be especially welcome for Assad as he looks to leverage it into a more tangible form of assistance. Previously, he has played up the Sino-Syrian connection as a way to demonstrate that he is not diplomatically isolated and that he has a number of potential partners to support his reconstruction efforts.

Having access to outside capital is vital for Syria’s reconstruction, since it is highly unlikely that domestic sources will be sufficient. In 2017 the World Bank calculated that Syria’s economy had shrunk by $226 billion between the start of the uprising in 2011 and 2016 – twice the country’s total GDP. A year later that estimate had risen further, to $350-400 billion.

Such figures are astronomical. They also dwarf the current and ongoing assistance from Russia and Iran to sustain the Assad regime throughout the war. The highest estimates put Russian and Iranian assistance at $7 billion and $23 billion, respectively. Even if such figures are matched in the postwar period, they will not come near to the amount required.

For that reason, China has become a more attractive proposition for some in Damascus, especially since other forms of foreign capital – including from the West – are likely to remain unavailable so long as Assad remains in power. Indeed, Assad has already expressed interest in joining China’s Belt and Road Initiative, while his officials have tried to attract Chinese investment in a range of projects, including the construction of a north-south-east highway, the re-development of the ports of Latakia and Tartus, and the construction of railroads, one in the Damascus region and another that would connect with the Lebanese port of Tripoli.

Yet it would be a mistake to assume that investment by China’s state and private firms could offer much more than that offered by Russian or Iranian ones. Trade and investment between China and Syria has typically been modest, even before 2011. Since then it has not grown substantially either. In 2015, Huawei expressed interest in rebuilding Syria’s telecommunications system and in 2017, China pledged $2 billion to help develop infrastructure and industrial parks. Such figures are in addition to the $60 million that China has provided in various forms of humanitarian assistance during the war.

The limited level of Chinese investment in Syria must also be set in context. The bulk of Chinese commercial activity is elsewhere in the Middle East, mainly in the Gulf – especially Saudi Arabia, Iran, and the UAE – and North Africa – Egypt and Algeria in particular. Moreover, Chinese financial commitments in the region may have already peaked. According to the American Enterprise Institute, which monitors Chinese capital around the world, investments in the Middle East have declined since 2018 – the year that President Xi Jinping pledged $23 billion in loans for the region as a whole at the China-Arab States Cooperation Forum.

Even if Chinese investors and firms were to focus more on Syria, there are several other hurdles that they would need to contend with and which we examined in our recent study of the subject. Several are related to risk. One is that although the war may be coming to an end in Syria, it does not mean an end to conflict. Substantial parts of the country remain outside of Assad’s control and foreign troops remain on Syrian territory, including Turkish and American forces. Chinese investors may be wary of the continuing volatility.

Another risk is the impact that international sanctions might have. Syria is subject to a wide range of sanctions and the United States has shown its willingness to enforce them. That has incentivized some financial institutions to avoid involvement in the country, including some Hong Kong banks that fear being blacklisted as a result.

A third challenge is that Chinese capital and firms may get caught up in games that are beyond their control. Assad has shown himself prepared to exploit any opportunities available to him, including playing his own partners against each other. Both Russian and Iranian officials and businesses have competed to gain the ear of the regime in order to acquire potentially lucrative contracts for themselves. Assad could well seek to do the same with Chinese firms. Not only would that provide problematic for them, having to navigate between Syrian, Russian, and Iranian interests, but owing to their previously limited involvement in the country, they would also have the disadvantage of being less familiar with the local terrain.

In sum then, the material benefits of the “Chinese dream” may turn out to be less profitable than they appear. That said, we have suggested that China could serve Syrian ambitions in another capacity: as a potential model for development. Indeed, Syria had already started down a similar road to China in 2005, when the regime began a limited form of privatization and liberalization. This had echoes in China’s own earlier shift to a market economy after 1978. China also attracted valuable foreign investment from the 1980s through the creation of special economic zones that focused on manufacturing. In addition, China’s early economic reforms were initiated domestically and steered by its leadership with little regard to outside frameworks and conditions, like those associated with the Washington Consensus under the IMF and World Bank.

Of course, it is important not to overdo the parallels. There is a substantial difference between the two countries given Syria’s state of war and China’s economic development in the absence of it. Yet the lessons for the regime may prove to be as important as any reconstruction funds it may be able to squeeze out of China and its other international partners.

Guest Author

Guy Burton

Guy Burton is an adjunct professor of international affairs at Vesalius College, Brussels and a fellow of the Sectarianism, Proxies and De-sectarianisation Project at Lancaster University. He is the author of “China and Middle East Conflicts” (Routledge, 2020) and “Rising Powers and the Arab-Israeli Conflict since 1947” (Lexington, 2018).

Guest Author

Nick Lyall

Nick Lyall is a (currently remotely based, in Amman, Jordan) Yenching Scholar at Peking University, where he is pursuing research on China’s growing involvement in global peace-building and development systems with a particular focus on the Middle East. He has worked for the past couple of years in Jordan as an independent researcher focusing on Middle East affairs and conflict systems, as well as China in the Middle East.

Guest Author

Logan Pauley

Logan Pauley is a China analyst based in Washington DC. He was formerly an analyst at the Center for Advanced Defense Studies (C4ADS) and a Scoville Fellow at the Stimson Center. Logan is a graduate of the Hopkins-Nanjing Center and Centre College. He speaks Mandarin.