A new global paradigm of international relations is taking shape, and the Middle East stands as a prime example. China has adopted a traditional strategy of economic engagement in the region, reaping significant rewards. Over the past two decades, China’s trade and investments in Middle Eastern countries have skyrocketed, surpassing long-standing development partner, the United States. While benefitting from US security coverage, China has maintained an ostensibly innocent economic policy, refraining from direct involvement in regional crises or interference in domestic affairs.
Following the US Secretary of State’s visit to Riyadh in June, a China-Arab business conference took place in Saudi Arabia, resulting in a flurry of business deals totaling over $10 billion. In contrast, no reported economic agreements or discussions on cooperation emerged between the US and Saudi Arabia or other Gulf Cooperation Council (GCC) members. This timing was critical, as China aimed to send a significant signal to the US. China has emerged as a near-peer adversary to the US, yet their approaches differ: China is proactive while the US has been reactive. The US has reduced its presence in the Middle East, redirecting its focus to the Indo-Pacific region, and investing in military capabilities in East European countries to counter China’s ally, Russia.
With a fortified military position and moral support to Russia, China has concentrated efforts in the Middle East, a region strategically positioned at the crossroads of Asia, Europe, and the US. Leveraging longstanding economic relations, China has begun building strategic partnerships with Middle Eastern countries, encompassing diplomacy, military and strategic domains, technology, energy, and health. China capitalized on the absence of a serious challenge from the once-dominant power in the region, the US, which used to have the final say in Middle Eastern affairs.
A noticeable shift in attitude has emerged among Middle Eastern players. While continuing to strengthen their defense capabilities, they are also seeking to de-escalate longstanding disputes through diplomacy and negotiations. They recognize that maintaining an “always-attack-ready” stance is counterproductive economically and hinders nation-building. This change is exemplified by the Saudi-Iran rapprochement, reconciliation efforts with Syria, and progress in resolving the Yemeni civil war. Although they have greatly benefited from US economic collaboration and security coverage, they now desire to make decisions independently.
China closely observed US actions in the Middle East, particularly in the Gulf countries, and noticed a serious lack of trust between these nations and the US. Middle Eastern countries expressed doubts about American capabilities in dealing with their issues, while concerns about Iran’s nuclear program persisted. The US also reduced its import of Gulf crude due to increased domestic production. In contrast, China, as the largest importer of crude oil, seeks to secure its supply from the Middle East. China found an opening in the region due to the decrease in US presence and their shifting focus elsewhere. Consequently, China embarked on simultaneous strategic initiatives, including operating the People’s Liberation Army Support Base at the port of Doraleh in Djibouti, strategically positioned near the Bab-el-Mandeb Strait. They also established a port facility at Duqm in Oman, serving their “One Belt, One Road” project and providing an alternative route for importing crude oil from the Middle East.
China has developed close defense ties with major Middle Eastern countries. In 2016, when the US refused to sell the latest version of weaponized drones to the UAE, China readily supplied them with Wing Loong I drones, followed by upgraded Wing Loong II drones in 2018. The UAE is also set to acquire China’s L-15 Advanced Trainer jets and light combat aircraft. Saudi Arabia and China have discussed cooperation in nuclear energy, with reports of Saudi Arabia developing indigenous ballistic missiles with Chinese technology and assistance.
Collaborating with China for defense purchases presents clear advantages. Once agreements are signed with Chinese government-owned defense equipment manufacturing companies, supply scheduling becomes the primary concern. On the other hand, purchasing from the US involves various issues, including limited access to the latest versions of items and the requirement of Congressional approval, leading to significant delays. In the rapidly evolving world of defense technology, China is often preferred due to its adaptability compared to the US and EU countries.
Middle Eastern countries, uncertain about their hydrocarbon resources’ future, are shifting their focus toward technology-based economies. They insist on technology transfer as a basis for this transition, an expectation they believe the US cannot fulfill. Hence, they view China as their preferred partner, as China currently leads in high-tech manufacturing, particularly in fields like Artificial Intelligence, semiconductors, renewable energy, biotechnology, telecommunications, and quantum information science.
China has been collaborating with Middle Eastern countries in these fields, further strengthening their engagement with oil-rich nations. Huawei has played a significant role, engaging in joint development projects in cloud computing, cybersecurity, and 5G technology. Most GCC members have already signed contracts with Huawei for 5G technology. China’s engagement with the UAE has increased due to the country’s substantial investment in future technological companies. In Iraq, China has made significant investments in solar power projects.
China’s cooperation with Middle Eastern countries in the health sector has primarily developed during the Covid-19 pandemic. China provided its Sinovac vaccine to these countries before the US and other nations made their vaccines available. This has established China as a major player in trade and investment in the region’s health sector, with aims to improve healthcare facilities and manufacture pharmaceutical products for potential export and long-term economic benefits.
The Saudi-Iran deal, seeking to end a costly and toxic conflict, marks a crucial shift in the Middle East, where countries act more independently. China played a pivotal role in brokering this deal and has extended its involvement to the Palestine-Israel peace negotiations. China established a “Strategic Partnership” with Palestine during Mahmoud Abbas’s visit to Beijing. Furthermore, China has invited Israeli Prime Minister Netanyahu for further dialogue, demonstrating growing economic and trade relations. China appointed a Special Envoy to handle diplomatic affairs between Israeli and Palestinian dignitaries.
China’s critical role in the Middle East’s political economy is essential to its own interests, while the oil-rich Middle Eastern countries, heavily reliant on crude oil exports, require China’s intake. As the world’s largest crude oil importer, China holds significant leverage in the region compared to the US. The same applies to defense cooperation, technology transfer, health, and energy domains.
However, uncertainties persist in three domains regarding China’s involvement with Middle Eastern countries. First, it remains uncertain whether China can be a strategic partner willing to deploy its military or engage in multinational military operations in case of a crisis, such as combatting threats like ISIS. Despite engaging with China, Middle Eastern countries have maintained their relations with the US due to untested aspects of China’s strategic commitments. Second, China faces significant diplomatic challenges with its success in brokering the Saudi-Iran deal and involvement in the Israel-Palestine peace negotiations. The ultra-rightist Israeli government’s position and the complexities of various Palestinian factions pose considerable tests for Chinese diplomacy. Lastly, there is uncertainty regarding Iran’s commitment to the Saudi-Iran agreement and China’s ability to mediate effectively if Iran interferes in other Middle Eastern countries’ political instability.
China’s expanding footprint in the Middle East is undeniable, and Chinese leadership acknowledges the potential pitfalls. Skillfully navigating the complexities and asserting influence over the now-assertive Middle Eastern powers will determine China’s ability to maintain a permanent stronghold in the region.
