Asia Pacific

China is Diving into the Gulf, But For How Long?

China MENA

© narvikk

August 15, 2016 13:51 EDT

It’s getting harder for Beijing to sell the story of non-interference in affairs of sovereign states.

Like most other major global powers that have preceded it, China is becoming entangled in the Middle East. A friendlier region to its interests than its own neighborhood in East Asia, China found in the Middle East an attractive zone for building economic ties. It did not come to the region with much baggage and, as a result, found itself a trusted partner of virtually every state in the Middle East and North Africa (MENA). China’s warm welcome throughout MENA encouraged Beijing to deepen its footprint—especially in the development and energy sectors.

The problem is that the MENA region is currently in tumult. State failure, civil war and regional conflict have all emerged simultaneously and in different ways have threatened the interests of every involved actor. China, for its part, continues to claim that it adheres to its tradition of non-interference in the affairs of other sovereign states and neutrality in regional disputes, but it is getting harder for Beijing to sell that story. China, whether they like it or not, has invested in the MENA region in such a way that it is now a party to some of the region’s most heated disagreements. No dispute looms larger and has more significant implications for Beijing than that of the proxy competition between Saudi Arabia and Iran.

China in West Asia

The MENA region—or what China calls West Asia—has been a critical area for Beijing for several decades. China’s booming economy constantly required greater energy resources to fuel growth, and the MENA region was an accessible locale for obtaining necessary fossil fuels.

Additionally, rising tensions with its neighbors throughout East Asia and increased pressure to find new market access for commodities encouraged the Chinese state to seize new opportunities in Asia, Africa and Latin America. The MENA region offered more opportunities than most—the region, beyond being resource rich, was actively looking to build stronger economic and diplomatic relations throughout East Asia. Beijing created a presence in Libya, Iraq, Iran, Saudi Arabia, the United Arab Emirates (UAE), Israel and Turkey, among others. Of chief importance were Saudi Arabia and Iran. Both are relatively stable states in an unstable region, possess immense natural resource wealth and can effectively serve as a target for strategic economic investment.

China’s interest in the MENA region only intensified upon the implementation of the One Belt, One Road Initiative, or what is called OBOR. The initiative is one of President Xi Jinping’s prominent foreign policy efforts and calls for the construction of communicative, infrastructural and transportation networks that connect Europe with China. The initiative or, more appropriately, strategy, follows two paths—a maritime path that goes through the Indian Ocean and a continental path that flows through Central Asia and the Middle East. The intent of OBOR is to initiate a period of intense development throughout Asia and eastern Africa, while easing the distance between China and its largest trading partner—the European Union (EU). OBOR has made existing multilateral groups, such as the Shanghai Cooperation Organization, more important for Asia and led to the creation of new institutions to assist development, such as the Asian Infrastructure Investment Bank.

For China, OBOR is a means to further expand trade, make obtaining natural resources easier, enhance China’s regional reputation, and to strengthen underdeveloped western provinces within China. The downside of OBOR is that it is a massively expensive undertaking through regions that are prone to instability. More importantly, the deeper China’s footprint becomes in Eurasia and elsewhere, the more important it becomes to protect investments against potential loss. In other words, the more economically tied China becomes with nations to its west, the less likely it is that China can remain removed from regional politics.

The Gulf Problem

The risk of Beijing’s increased foreign engagement is represented by China’s current situation in the Gulf. A decade ago, China was a rising, reliable consumer of Saudi and Iranian oil and other natural resources. Beijing had very little to do with politics in the MENA region and operated under the notion of being an opponent to none and a friend to all.

Today, China finds itself with a much different footing in the Gulf. China remains Saudi Arabia’s largest petroleum customer and several high profile joint ventures between Saudi and Chinese firms have created durable ties between both nations. In Iran, China’s forceful, if private, support for a nuclear agreement helped the P5+1 talks succeed. Since then, China has actively sought to comprehensively intensify its ties with most sectors of the Iranian economy.

Will China’s actions lead to a decline in China-Saudi Arabia ties? No, but the impression that China will not back Riyadh in its opposition to Iran’s influence will harden the perception that China cannot be relied upon in the long term.

China, due to changing domestic economic conditions and the forces of OBOR, has substantially increased its engagement throughout MENA. The scale of China’s interests in the region has made it one of the most active non-regional actors throughout the Middle East. China’s prevailing political interest in the MENA region is stability, but Beijing’s intensified interest just happened to correspond with the Arab Spring and its aftermath, one of the most unstable periods in recent history throughout the Middle East. This regional instability has been off-putting for the leadership in Beijing, so China has become more vocal in its support for stable regimes and the forces within the region that in Beijing’s accounting have the best chance to enhance stability.

Between a Rock and a Hard Place

Thus, Iran and Saudi Arabia are critically important states for China, now more than ever. Unfortunately, the peak of China’s interest comes at the same time as the intensification of the Saudi-Iranian rivalry that is being undertaken through proxies in Syria, Iraq, Yemen and elsewhere. This rivalry is difficult to navigate. Beijing’s approach to Syria, for instance, has consistently argued that stability should be the first goal and until another actor emerges that can effectively lead, President Bashar al-Assad and his regime must remain the faction in charge of Syria. This interpretation of events in Syria is purely premised on China’s regional economic interests and has very little to do with geopolitics, but backing Assad means that China supports the same faction as Iran and opposes Saudi Arabia.

OBOR, due the geographic elements of the continental route, emphasizes Iran over any other MENA state. Beijing has consistently pointed out that the benefits of OBOR will be felt by the entire region, but geography cannot be denied. For OBOR to work, railways, telecommunication systems, port facilities, bridges and more comprehensive economic projects will be built in Iran. Such investment will inevitably assist the Iranian economy and make it a stronger rival for Saudi Arabia.

Beijing understands the increasingly difficult situation it finds itself in the Gulf. During President Xi’s January 2016 visit to the Middle East, he made sure to visit both Riyadh and Tehran to combat any perception of China favoring one over the other. Yet China’s plans do seemingly support Iran over Saudi Arabia, and this has been noted by both Saudi Arabia and its regional partners in the Gulf Cooperation Council (GCC).

Will China’s actions lead to a decline in China-Saudi Arabia ties? No, but the impression that China will not back Riyadh in its opposition to Iran’s influence will harden the perception that China cannot be relied upon in the long term. Likewise, the appearance of Beijing’s support for Tehran could be misinterpreted by the Iranians as ratification of their regional aspirations.

The scope of Chinese engagement in the Middle East has reached a scale where it seems natural for China to begin to develop certain key friendships with regional states. Thus far, Beijing resists such actions. China’s leaders believe they can continue to navigate the region’s politics without blowback. Yet, as China’s investment portfolio grows even further and becomes more entangled in global issues like countering violent extremism, the ability to act internationally without reliable friends will become a hindrance. Today, China can pretend it does not see the MENA region’s political crises, but one day soon that luxury will no longer be affordable.

The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.

Photo Credit: narvikk

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