#68 – Event report – Engaging the Middle East: China’s rising role in the region

SPEAKERS

NIU Xinchun 牛新春, Research Professor, Director of Institute of Middle East Studies, China Institute of Contemporary International Relations (CICIR)

Tugrul KESKIN, Professor and Director, Center for Global Governance, Institute of Global Studies, Shanghai University

Report

According to prof. Keskin, with the economic development derived from the Opening Up policy, launched forty years ago by Deng Xiaoping, China’s middle class has grown exponentially, increasing national oil consumption and consequently the demand for fossil fuels. Therefore, China is turning its eyes to the Middle East to fulfill its own demand for oil and gas, particularly by importing it from the Persian Gulf. From a Chinese perspective, the Middle East has always been the United States’ “backyard”, and therefore China, which had most of its economic and diplomatic ties in the African continent, entered the Middle East are more cautiously, in order not to get in direct conflict with the United States. However, from President Obama’s administration onwards, the USA has begun to retrieve its presence in the area, changing its policy towards the entire region. Energy-wise, US interests are decreasing since the adoption of new oil-producing techniques, such as fracking, that helped the US in 2013 to see its crud oil production surpassing net imports.

On the opposite side of the world, around 50% of Chinese oil demand is fulfilled by the Gulf’s countries. To protect and preserve its interests, China must play a more determinant role in the Middle East to stabilize the region, which does not imply a military intervention, but more a use of different soft power tools, as the launch in 2013 of the Belt and Road Initiative. The consistent problem of the Middle East is the struggle for stability, which according to the Chinese vision can be reached only through economic development. China is progressively shifting approach to the Middle East by intensifying its diplomatic ties, especially towards Iran. However, in its new policy, China is not considering engaging non-governmental actors who are an active part of local civil society, like Hezbollah or the Muslim Brotherhood, key players in deterring the stability of the entire region.

According to professor Niu, unlike Europe, the USA or Russia, China engages only partially with the Middle East. The main field of interest in the region for Beijing is the economic sector, especially trades in the energetic domain. In the past thirty years, China dramatically increased its presence in the Middle East, becoming for several Middle Eastern countries the biggest and main trade partner, hitting in 2015 350 billion dollars value in bilateral trades. In more recent times, bilateral trade values reduced to 240 billion dollars, because of the variation in gas and oil prices; nonetheless, the amount of product imported by China from the region is still increasing. 68% of China’s oil consumption derives from foreign countries, and half of it comes from Middle Eastern countries: as an example, three out of ten Chinese cars are fueled with Middle Eastern oil, making the region extremely important for China’s energy security. 

In terms of investments, China FDI in the area increased quickly in the last 10 years, but compared to Western countries  – Europe and the US – the amount invested is still small. In 2016 China FDI in the Middle East was less than 10 billion dollars, with almost half of them directed towards Israel.

For what concerns Arab countries, China is investing cautiously due to instability, political and economic risks. For BRI the Middle East is an important component, but since the launch of the initiative the region has fallen into a very unstable situation, which makes it unfavorable to implement such a wide and intense program. China has engaged politically the Middle East, but it has not a political influence over the region; the only instrument to be influential is the veto power within the UN Security Council. In Syria, China has used its veto power six times, but generally China tries not to get involved in tangled and sensitive topics. As an example, during the Syrian crisis, China did not take part in the Geneva negotiations, as well as for the negotiation and political debate concerning the Palestinian-Israeli crisis. 

China is engaging economically the region, but this engagement is not extended to the military sector, since it does not have a military base in the area of any military or political ally in the Middle East. China has also learned the lesson from other major powers, which tried to control and stabilize the area with negative results. In China, middle school students are taught that the Middle East is the great powers’ “graveyard”. The USA had and still has the ability, military power and instruments to resolve crisis, however, the in the last 15 years its initiatives had a very negative impact, destabilizing even more the region. Europe as well has interests in resolving the Middle Eastern crisis, but it has not a united military power and so the ability to have an impact. According to professor Niu, in a foreseeable future, China will not actively get involved in the Middle East. However, if China wants to expand its global influence and compete against the United States, the Middle East will be a last choice.

 

Report written by Andrea Barbieri

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