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China’s New Grand Strategy for the Middle East

Chinas New Grand Strategy for the Middle East

“Turmoil in the Middle East stems from the lack of development, and the ultimate solution depends on development. The use of force offers no solution to problems. Parties to the conflict should focus on advancing the process of political settlement. The international community should respect the will and role of those directly involved, the neighbouring countries and regional organizations, instead of imposing a solution from the outside.”
— Chinese President Xi Jinping while delivering a speech at the Arab League Headquarters

President Xi Jinping’s visit to the Middle East could signal the beginning of a new era in relations between China and countries in the region. It was Xi’s first overseas tour of 2016 and his first to the region since assuming office. While the trip will breathe new life into relations with Saudi Arabia, Egypt and Iran, the ripples will be felt far beyond these three. Far-reaching effects will be seen by various players across the region, as China takes centre stage in the Middle Eastern theatre.

President Xi’s tour took place amid a perilous time in the region. Saudi Arabia is struggling with the plunge of oil prices, rapidly rising debt and a war against Yemen. In Egypt, opposition is increasing against the perceived successors of President Hosni Mubarak’s three-decade long rule. In Iran, sanctions have been lifted after decades of international insulation.

In one way or another, all three countries are also involved in Syria’s civil war, battles against the Islamic State and regional conflicts, along with Russia, the US and European powers; the continuing Israel-Palestine conflict; and the economic and religious Sunni-Shia friction which contributes to regional rivalries, splits several Arab states internally and has been historically manipulated by foreign powers.

Xi’s tour signals a shift away from the “divide and rule” colonial legacies to economic development.

Economic Development À La China

In his first stop in Riyadh, President Xi met Saudi King Salman bin Abdulaziz Al Saud and Deputy Crown Prince Mohammad bin Salman. It was the climax of longstanding rapprochement. Saudi Arabia established diplomatic relations with China only after the Cold War in 1990. By the early 2010s, China supplanted the US as Saudi Arabia’s largest crude oil client.

At the same time, bilateral trade has soared to $74 billion. China is Saudi Arabia’s largest trade partner. During Xi’s visit, Saudi Aramco and China’s Sinopec signed a $1.5 billion agreement for strategic cooperation. China also plays a role among Saudi Arabia’s military suppliers.

In Egypt, President Xi met President Abdel Fattah el-Sisi, amid Cairo’s controversial measures to suppress the 4-year anniversary of the 2011 uprising. Egypt was the first country in Africa and the Arab world to establish diplomatic relationship with China in 1956. Nevertheless, bilateral strategic cooperation was initiated only in 1999 and a comprehensive strategic relationship two years ago. In 2014, total bilateral trade amounted to $12 billion. That’s when Beijing established a $100 billion economic and trade cooperation zone in Egypt. China is discussing potential investments in large Egyptian infrastructure projects. Beijing is also expected to lend Egypt’s central bank $1 billion to assist its efforts to shore up foreign reserves.

President Xi’s last stop was Tehran, where he met his Iranian counterpart Hassan Rouhani and the supreme leader Ayatollah Ali Khamenei. Since 2011, China has been Iran’s leading customer for oil exports, even as the West ramped up sanctions against Tehran. Iran, said President Rouhani, would not forget “friends who helped us” in a difficult time.

In 2014, China-Iran bilateral trade amounted to $52 billion. China is Iran’s largest trade partner. In Tehran, the two countries opened a “new chapter” in bilateral ties by agreeing to expand trade to $600 billion in the next decade. To Beijing, Iran is a critical hub along the new Silk Road route. To Tehran, China means great economic opportunities in the post-sanctions era.

In brief, President Xi’s three-nation tour codified China’s presence in the Middle East as a major energy buyer, major importer, infrastructure builder, and peace broker.
US History of Regime

Changes

If China’s effective presence in the Middle East began to increase in the early 21st century, the United States’ role originates from the post-war era. After the 1945 Yalta Conference, which effectively divided Europe, President Roosevelt’s subsequent meeting with Saudi King Abdel Aziz Ibn Saud led to a secret agreement, which required Washington to provide Riyadh military security in exchange for secure access to supplies of oil.

For more than six decades, that pact prevailed, despite Washington’s periodic debates about US need for energy self-sufficiency. But in the past decade, it has begun to crumble with the US shale gas revolution. Moreover, the spread of terror and counter-insurgencies pose questions about the viability of interventionist policies in the Middle East. The US approach has been predicated on strategic alliances and — whenever such alignments have not been viable — on regime change.

In March 1949, the CIA sponsored the coup d’etat by Col. Husni al-Za’im, which overthrew democratic rule in Syria. In 1953, the CIA helped Shah Mohammad Reza Pahlavi to remove the democratically elected Prime Minister Mohammed Mossadegh, which destabilized Iran’s inclusive development for decades, paving the way to the Islamic Revolution of 1979. During the 1958 Lebanon crisis, President Eisenhower first applied the doctrine under which the US would intervene to protect regimes it saw threatened by international communism. In the Kennedy era, CIA planned a coup against Abd al-Karim Qasim’s Iraq.

With the 1970s energy crises, the proclivity for intervention intensified. During the Yom Kippur War, President Nixon authorized a strategic airlift to deliver weapons to Israel, which led to decades of massive military aid to Israel, despite continued settlement violations in the occupied territories. Meanwhile, the CIA armed Kurdish rebels fighting Iraq’s Ba’athist leadership. Under Reagan, Washington sent troops to Lebanon during the Lebanese Civil War until the Beirut barracks bombing. During the 1980s Iran-Iraq War, US warships escorted Kuwaiti oil tankers against Iranian attacks, while attacking Iran to pressure Tehran to a ceasefire with Iraq. In 1986, Libya was bombed in response to terrorism.

After the Cold War, the US led a coalition to remove Iraq from Kuwait in the Gulf War. In 2003, US invasion of Iraq toppled the government of Saddam Hussein, unleashing a decade of instability and giving rise to the brutal Islamic State. In 2011, the US participated in a Western coalition that launched a military intervention in Libya and covert operations elsewhere in the Middle East. And when Syria was swept by a civil war, the US joined in, along with France and the UK.

The list of US interventions in the region is long and bitter.

One Region, Two Approaches

The historical roots of regime change originate from the 19th century imperialism and 20th century colonialism. In the Bush era, regime change was an explicit neoconservative objective; in the Obama era, it has been implicit in assertive liberal internationalism. As a result, America is not seen as an honest broker in the region.

In contrast, the Chinese approach builds on non-interference, stabilization and economic development. China and the Arab world share a history of imperial disintegration, colonial humiliation and struggle for sovereignty and territorial integrity. Although the relations between China and the Arab world go back to the 1955 Bandung Conference of the Non-Aligned Movement (NAM), economic cooperation began to intensify with the opening of the Sino-Arab Cooperation Forum in 2004.

In the past decade, this cooperation has broadened on the back of economic cooperation. With the “One Road, One Belt” initiative, it has potential to contribute dramatically to economic development. But while it differs diametrically from US policies, it is not positioned against US interests in the region. Indeed, some US administration officials see the Chinese presence in the region as a real opportunity to de­escalate growing Saudi-Iranian friction.

What we are witnessing in the Middle East today and what President Xi’s tour signals is not just bilateral trade expansion, but a new secular tend that heralds the rise of multi-polarity in the region.

Key Facts

Here we look at the background to China’s relationship with all three nations, President Xi visited in January.

Saudi Arabia

Saudi Arabia, once a staunch anti-communist nation and close ally of the United States, established diplomatic relations with China in 1990. Former Chinese president Jiang Zemin made the first state visit to Riyadh in 1999.

Saudi Arabia is the biggest supplier of crude oil to China.

The International Monetary Fund said that as of 2013, trade between the two nations has increased from US$1.28 billion in 1990 to US$74 billion in 2012.

On the military front, China provided the kingdom with up to 60 CSS-2 intermediate-range ballistic missiles in 1988 — two years before they established diplomatic ties.

Saudi Arabia also operates a medium-range DF-21 ballistic missile system, which has upset the US.

Egypt

Egypt was the first country in Africa and the Arab world to establish diplomatic ties with China in 1956. The two countries began a strategic cooperation in 1999 and expanded this to a comprehensive strategic partnership in December 2014.

Egypt has a large trade imbalance with China that favours the mainland. The total trade volume reached US$11.62 billion in 2014 — a 13.8 per cent increase compared with the previous year.

China’s exports to Egypt increased by a quarter in 2014 to US$10.46 billion, while imports dropped 37.4 per cent to US$1.16 billion.

China mainly exports machines, electronics and garments and import crude oil, liquefied petroleum gas and marble.

China set up a state-level overseas economic and trade cooperation zone in Egypt using investment of US$100 million in 2014.

Iran

China helped mediate the Iranian nuclear deal in July 2015 and Xi is the first state leader to visit Iran since the nuclear-related sanctions were lifted on January 17.

China has been Iran’s biggest trade partner for the past six years and the biggest buyer of its crude oil and non-petroleum products.

Trade volume between the two nations surpassed US$50 billion in 2014 — up 31.5 per cent on the volume of trade the previous year.

China’s export volumes to Iran in 2014 totalled US$27.5 billion, while the volume of imports from Iran totalled US$24.3 billion.

The mainland exports machines and electronics, textiles, chemical and steel products and import crude oil, ore and agricultural products.

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