china-arab-relations

China’s Evolving Middle Eastern Policy

It is well known that China has emerged over the last few decades as a world power. China’s relations with other regions of the world has gained precedence. This blog post will examine China’s growing relations with the Middle East.

China’s Middle East policy can be described as being both realistic but also very pragmatic, and China has remained very consistent with its foreign policy. Following the Cold War, China’s Middle East policy consisted of mainly quenching its thirst for energy as well as the need for diversifying investment opportunities. As a result, China’s policy in the region has been to enhance its energy and economic relations. In direct correlation to this China’s response to the Arab Spring was one of negotiation and conflict management.

China has remained constant in its non-interventionist stance, and has maintained its view in that sanctions on countries simply do not work, and as a result have been hesitant to implement such policies.

Nonetheless, following the Arab Spring the Chinese Communist Party has found it increasingly more difficult to uphold this policy. Despite the fact the Middle East has remained of key importance to other countries such as the US and the UK, China has tried to avoid direct confrontation as a result. However, it equally would like to keep relations with new and old regimes in order to guarantee a constant supply of energy to meet its needs. Due to the fact that stability in the region is of paramount importance to meeting these energy needs, China’s foreign policy in the region has slowly started to change. This can not only be seen with China’s appointment of a special envoy to the region but also in its contribution to anti-piracy in Yemen and Somalia.

Up until the early 1990’s China was relatively self-sufficient in meeting its own energy needs. Fast-forward to the current era and China has risen to become the second largest consumer of oil in the world, consuming an estimated 5 million barrels a day. By 2035, 30% of the world’s energy consumption will be consumed by China alone. This growing reliance on oil makes China incredibly vulnerable, considering the fact that it only has 100 million reserve barrels of oil. The Middle East currently has two thirds of the world’s oil reserves and China relies heavily on Middle Eastern oil with half of its oil being imported from Saudi Arabia and Iran. The Arab Spring therefore posed a variety of problems for China, with China already having suffered a large number of losses.

Furthermore, the MENA region is a very important market for China’s offshore engineering and offshore construction firms, with bilateral trade amounting to $300 billion in 2014. Despite this, China has thus far been able to import enough oil to guarantee economic security and the odds of economic disruption in the MENA region still remains low. China also seems to be in a good position to benefit from fire sale of Libyan assets in Africa. Due to the fact that China has very high foreign currency reserves meaning it can buy Libyan assets at much cheaper prices.

Social stability in China remains of utmost importance, and delivering rapid economic growth is in line with this. Beijing worked incredibly hard since the beginning of the Arab Spring to contain information from spreading to their own people via the use of social media and the internet. Despite China’s impressive economic growth it still faces a number of problems including rising inflation and growing environmental problems.

If its current property bubble were to burst, the Communist Party authority would come in to question. However, this seems unlikely considering that China has a strong and determined leadership as well as high social mobility. Whilst the regime operates propaganda and censorship it also allows protests to a certain degree in order to enable its citizens to let off steam.

China’s relations with Iran are of particular interest. China’s Xi Jinping is one of the first world leaders to visit Iran since international sanctions were lifted.

 

The two leaders signed 17 agreements on a range of issues from energy to boosting trade to $600bn. Iranian President Hassan Rouhani said he and Mr Xi had signed a “comprehensive 25-year document” on strategic relations. China was a top consumer of Iranian oil even during the three years of international sanctions that targeted Iran’s nuclear program. Now that the sanctions have been lifted and Iran is ramping up oil production, that relationship could grow further. China has also written a blueprint for the Middle East. The White paper on Middle East presents a blanket vision for regional relations, without getting in to the complexities of how that vision will be realized in bilateral relationships with individual states. The “Arab countries” are those with membership in the League of Arab States, which serves as the basis of the China-Arab State Cooperation Forum.

Moving on to more general trade issues, China promises to complete negotiations on a free trade agreement with the Gulf Cooperation Council, comprised of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates. The White paper also notes that China supports the entry of more non-oil products from Arab states into the Chinese market, addressing a common complaint from China’s natural-resource rich trading partners.

China’s interactions with the Middle East in general are largely limited to the economic sphere right now. The white paper doesn’t exactly turn that paradigm on its head; the section on “Investment and Trade Cooperation” is over twice as long as the section on “Cooperation in the Field of Peace and Security.” However, there is attention paid to the security realm, an area where China has been noticeably absent in the Middle East.

Unsurprisingly, much of China’s proposed security cooperation is set in the context of anti-terrorism, which has become a serious concern for Beijing. “China is ready to strengthen anti-terrorism exchanges and cooperation with Arab countries,” the paper says, with some goals being to “establish a long-term security cooperation mechanism, strengthen policy dialogue and intelligence information exchange, and carry out technical cooperation and personnel training.” However, China also notes, as it usually does when the subject of terrorism is brought up, that “counter-terrorism needs comprehensive measures to address both the symptoms and root causes” – meaning economic development along with military measures. Based on China’s existing strategy for fighting global terror, more can be expected in the way of financial aid and capacity building support for regional militaries, than an increased Chinese military presence to fight terror in the Arab world.

Perhaps the most striking thing about “China’s Arab Policy Paper” is that it exists in the first place. China has never before issued a paper outlining its approach to the Arab world; doing so now indicates that Beijing sees a growing strategic importance to the region.

A number of findings have been outlined in this paper, encompassing not only the Chinese– Middle Eastern security relationship, but also an insight into China’s modus operandi in conducting its international relations. It is clear from the above cases that China’s economic security is becoming more and more dependent on the region.

Specifically, a concern for economic security has led to the PLA Navy’s first expedition out of the Pacific. The Iranian issue demonstrates China’s ability to diversify its economic security away from specific states in the Middle East and has shown that it is possible to take a dynamic approach with regard to energy security. There is little indication that the Middle East poses a political threat to China, or more specifically, the government’s claims to sovereignty over Chinese territories. An emerging potential threat to China’s political security can, however, be found in recent threats of terrorism, and fears that Al-Qaeda may, as well as targeting economic assets discussed above, give aid to secessionist forces in China’s far western provinces. On a state level, there is little to no threat to China’s political security in this regard. China’s non-confrontationist attitude has been most explicitly displayed in a diversification of energy supplies away from Iran, and a general, although limited, cooperation with Western powers on the UN regarding the Iranian issue. This position is, of course, a far cry from the PRC’s anti-hegemonic stance, which was pursued for the greater part of the 20th century, and does not suggest that the PRC is an overtly revisionist power. Thus, there is a clear intention in China’s Middle Eastern policy to avoid confrontation with other powers, even if that means going to extensive lengths and accommodating other states’ hostility.

In summary, it seems unlikely that the current turmoil in the Middle East and particularly post Arab Spring is likely to cause China any long term threats to its economic interests. Both old and new regimes in the MENA regime see China as a valuable ally and trading partner, and bilateral trade is expected to keep growing.

 

 

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