Can China maintain a positive balance in its engagement with the Middle East?
By Mathilde Barge
Abstract
In the face of escalating tensions in the Middle East, China is transforming from a passive observer to a pivotal diplomatic actor. Its evolution from a lending giant to a mediator and technology influencer reveals a calculated strategy of "intermediary zones." The article explores China's role in the Middle East's geopolitical landscape, from bilateral trade to diplomatic power, and its growing reliance on technology as a tool for influence. As China seeks to balance its domestic interests with regional stability, the ongoing Israeli-Palestinian conflict will play a defining role in shaping its future in the region.
The recent military positioning of China in the Middle East due to escalating tensions in the Israeli-Palestinian war has been commented to be China’s expected positioning as a new anchor in the region. In this article, I will support the argument that China is progressively moving away from being a positive balance of power and a neutral actor, towards being a mediator of checks and balances through a multipolar positioning. Ultimately, Chinese strategy could become embroiled in its own interests in the region, revisiting the Cold War rhetoric, including the use of military force.
From Mao’s time, there has been a desire for China to be a third way into the region, to act as a stable ally to develop the region economically whilst breaking away from a Euro/American dependency mindset. Initially focused on low-hanging fruits such as peacekeeping operations and conflict mediation, economic mobilization in the region was coupled with the state’s centenary ambition for national rejuvenation through the Belt and Road Initiative (BRI).
Since 2011’s BRI, China has reinforced its relationships with the Middle East through trade, energy security, and as a developmental ally. Egypt exemplifies this evolution from purely trade relations towards strategic bilateral agreements, that promote cooperation. First established in 1956 (Gangzheng, 2023), relations with Egypt have evolved through infrastructure, cultural and financial cooperation programs. These have been reinforced by both the signing of the BRI and the Egypt 2030 project, which align in values (Sun & Xu, 2022) and have permitted the development of technological projects such as a satellite program. Moreover, Chinese investments have increased by 317% in Egypt from 2017 to 2022, largely through infrastructure lending programs, and China has consistently been Egypt’s largest importer (Sun & Xu, 2022). Despite this picture-perfect rendition, there have been stirrings on both sides, with China being scared of the Egyptian dwindling economy and Egypt being conscious of Chinese actions possibly creating a chokepoint in the Suez Canal. Since the Egyptian development debt has reached up to 76% of the country’s economic output in 2022 (Sun & Xu, 2022), China has been shifting towards a debt renegotiation strategy to lower the risks of default. The debt-swapping Memorandum of Understanding (MoU) agreement that was signed on October 20 showcases China’s desire to be cautious of any distressed assets (Haddad-Fonda, 2014) but also of the weight of its own sovereign debt. This, paralleled by a shift towards a more multilateral development, showcases China as more cautious when it comes to new investments with partners.
Moving away from purely lending strategies, there has been a shift away from Mediterranean countries towards more cooperation with Gulf countries, which demonstrates not only growing multilateralism but also active policy cooperation. Regionally, the Arab Paper Policy in 2016, as well as the first China-Arab States and GCC summit in 2022 (Eslami & Papageorgiou, 2023), showcases commitment to regional development through international law (Dungard, 2023). Moreover, the rise of Chinese engagement in BRI in 2022 has accelerated the de-dollarization (Eslami & Papageorgiou, 2023) process in the region. This is part of a strategy of intermediary zones of using bilateral relations to have a power rebalancing against the US. It can be exemplified by growing relations with Saudi Arabia, which is notwithstanding the complex Saudi-US relations. Whilst the two countries have exclusive oil agreements, there has been a lack of response by the US when it comes to Saudi security concerns creating distance (Sun & Xu, 2022). The fact that Saudi refused the US’ demands to increase oil production to offset the consequences of the Ukrainian war demonstrates shifting influence in the region. China’s rise as a potential facilitator can be seen by its brokering of the Iran/Saudi deal. Whilst it could be argued that Oman and Qatar did more for the resuming of relations than China did, its strategic positioning does showcase that it is willing to position itself at least as a mediator and as the international voice within the Russia-Iran trio. Thus, with efforts to mitigate Iran's potentially destabilizing regional activities, it can be argued that China’s multilateral position showcases a more hands-on approach in the region.
China understands that its own domestic security is linked with the region’s, and has been creating a new global security infrastructure coupled with technological investments. This has been observed in Xi Jinping’s Global Security Initiative (GSI) and the New Security Architecture for the Middle East, which was unveiled by the Chinese Foreign Minister, Wang Yi. Both these proposals include a new security concept based on MENA as a dominant position in resolving the conflict within an international order, as well as boosting multipolarity. It also encompasses a larger Chinese vision of security as a state that provides technology and arms but does not become embroiled in conflicts as a foreign patriarch. In fact, Chinese arms exports have increased, and whilst their expansion of planned PLA bases does not threaten a large US dominance in the region, they have warned countries against an over-reliance on Chinese technology. For example, since the US stopped selling drones in MENA, there has been a rise in defense exports to Saudi Arabia and UAE of 290 and 77%, respectively, compared to previous exports. The US' new strategy of technological containment has helped incorporate security partnerships as part of the BRI (Gering, 2023). With this, technology has become another pillar in the “intermediary zones” strategy of China, with the Digital Silk Road overlooking AI, submarine fiber optic, and quantum computing development. For example, during the China-Saudi Arabia Summit, Huawei was approved to develop a 10 gigabits per second mobile internet network in Saudi Arabia. Ultimately, with China just announcing its new AI regulations during the last BRI summit, this could be a show of desire to become a legislator or a regulator for the technology being launched/introduced. This could represent a new breach in its involvement in the region, but also internationally as it moves towards being a dominant determinant of the international law order.
The Palestinian-Israeli war could thus be a show of this shifting power balance but also a way for China to re-engage with arms and technological Cold War tactics. China recognized Palestine in 1988 but had established relations with it since the early 1960s, whilst continuously expressing the fact that the Palestine issue remains at the heart of the Middle East problem. While Palestinian relations have been strong and continual, developments in its relationships with Israel have been recent. In fact, since relations were established in 1992, Chinese companies have negotiated more than 500 investment deals that relate to the technology sector, such as communications and AI. Moreover, Israel relations have expanded with the rest of the Middle East, through the US-sponsored Abraham Accords, the first Arab Israeli peace deal, which normalized Israeli ties with Sudan, Morocco, UAE, and Bahrain. As the war evolves, the Accords become irrelevant, and so it could be argued that this has set standards for governance and an understanding that a two-state solution is not a prerequisite for regional prosperity but, most importantly, that the core issue is to ensure peace and growth. Moreover, the war put a stop to the normalization of relations between Saudi and Israel, which would have signified a drop in oil prices as Saudis would have upped their production. In this way, a drop in oil price would have given an advantage to the US/Europe alliance in Ukraine, and even possibly a loss of the war. So it can be observed that safeguarding the regional bloc that represents Russia is also in Chinese interests. In this way, as China is growing as an overall friend or at the very least a mediator within the Middle East, it is also using the Cold War rhetorics in the region to reassert its influence.
In conclusion, China's evolving role in the Middle East, particularly amid the Israeli-Palestinian war, signals a departure from its historical stance as a neutral actor, moving towards a multipolar mediator. Strengthening ties through the Belt and Road Initiative, China's strategic engagement extends beyond economic cooperation to encompass regional collaboration, notably with Gulf countries. The nation's cautious approach, exemplified by debt renegotiation strategies, reflects an awareness of the region's complexities. Emphasizing a commitment to regional development, de-dollarization, and technological investments, China positions itself as a key player in shaping the Middle East's future. The Israeli-Palestinian conflict serves as a backdrop for China to employ Cold War tactics, reengaging in arms and technological strategies, showcasing its nuanced diplomacy and intent to reassert influence in the region. Overall, China's multifaceted approach underscores its emerging role as a mediator and facilitator, shaping the geopolitical landscape of the Middle East and international relations.
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