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China Ventures into the Middle East.

Mainly for reasons of energy sources, the last decade has seen China investing heavily in the Middle East and North Africa. The Silk Roads have sought the improvement of ports and other regional infrastructure, rendering the countries of the Gulf, Egypt and Iran the main destinations of Chinese investment.
Despite all this, the premises for involvement at the political-military level are yet to be found.

A new piece has emerged on the Middle East chessboard: China. Its economic expansion in the last twenty years has caused an exponential increase in Chinese dependence on imported oil and natural gas, amounting to 69,8% and 45,3% of its total needs. As a result, the Middle East has changed from being a marginal zone of the world to one that has been central to the strategy of Beijing since 2008.

The document which still guides Chinese politics in the Middle East is the 2016 China’s Arab Policy Paper which sets out the principle of the ‘1+2+3’, indicating sectors of economic cooperation in order of priority: energy (1), infrastructure and commerce/investment (2), the nuclear sector, aerospace and renewable energy (3). Today, half of the crude oil imported by China comes from the Middle East and North Africa.

Chinese investments amounted to 242 billion dollars between 2005 and 2020 and commercial exchange with Arab countries was worth 317 billion dollars in 2019. In recent years, the Chinese Silk Road project has further accelerated the economic integration of the two regions. The ancient continent is still by far the major economic partner of the Middle East, but rapid Chinese expansion generates fear, most of all in European governments, but also in Washington.

To complete the picture, a report by the ‘Arab Barometer’ shows that the Arab populations would much prefer greater involvement of their countries with China rather than with the United States or Russia. The various sub-regions of the Middle East show very different levels of integration with China. The Maghreb, for example, remains on the margins of Chinese action, despite the efforts of the North African governments for greater cooperation in the sectors of infrastructure. The case of Libya is symbolic of the Chinese approach in the Middle East.

Agreements with Gadhafi had brought 18.8 billion of Chinese investments to the North African country which, in turn, provided 3% of Beijing oil requirements. China, nevertheless, has never had an active role either in the territory or diplomatically. Contacts with the Tripoli government have brought about the recommencement of petroleum exports and the signing of the memorandum of the Silk Roads in 2017.

Egypt has stood out among other North African countries ever since, in 2014, President al-Sisi signed  25 cooperation agreements with Beijing, among which was the ‘Memorandum of Understanding’ for the Silk Roads. Good relations between the two countries facilitate the smooth entry of China into the largest Egyptian infrastructure projects: the new administrative city and the exclusive economic zone of the Suez Canal.

On the other side of the Red Sea, the monarchies of the Persian Gulf are in the front line of cooperation with China. The plan which all these countries have adopted to emerge from the yoke of petroleum require massive foreign investment and Beijing is the only power with sufficient available capital. The United Arab Emirates are to the fore with 4,000 Chinese companies in the country, growing commercial exchange and agreements already signed for the development of 5G.

Lastly, Iran is the leader among the regional partners of the Blue Empire. International sanctions in past decades have brought Teheran and Beijing ever closer. Many experts saw in the Nuclear Pact an attempt by Iran to lessen Chinese influence in the country, but the agreement is already on the rocks and Iran has returned to the arms of China. As proof of the deep relations between the two countries, Xi Jinping and Rohani have recently signed a 25-year partnership involving billions in investments in the energy, transport, tourism, telecommunications and infrastructure sectors.

Analysts have shown that the Middle East is the only region of the world where investments in the Silk Roads were not halted in the past two years. The so-called Belt and Road Initiative is, in fact, the cornerstone of Beijing’s interests in the Middle East since it depends not only on the influx of Chinese goods into Europe but also the political destiny of Xi Jinping. The main overland corridor is planned to traverse Iran and Turkey and reach Eastern Europe.

Even more relevant is the maritime corridor which will connect the Indian Ocean with the Mediterranean, passing through the Red Sea. The maritime corridor has placed the Gulf countries at the centre and has brought huge investments to the maritime infrastructure of the region. Among the most important ports is that of Djibouti, acquired and enlarged by the Chinese colossus of maritime transport, COSCO.

Along the coasts of the peninsula we find Jebel Ali and Khalifa in the Emirates, already maritime hubs in the region, Duqm (Oman), built with Sino-Oman funds to the tune of 10.7 billion dollars and the port of Jizan (Saudi Arabia), whose construction was handed to a Chinese company. Finally, there is the exclusive economic zone of the Suez Canal that is attracting Chinese companies from Porto Said to Ain Sokhna, on the opposite end of the Canal.

This swarming of port projects in a relatively small and sparsely inhabited region is accentuating remarkable competition between the Gulf monarchies. In parallel, the governments of the Gulf are trying to attract Chinese investment in the futuristic cities under construction. One of these is Neom, the Saudi megalopolis costing 500 billion dollars, now halted by Covid-19, is due to attract investment from Beijing
and also the future Silk City in Kuwait, an explicit reminder of the Chinese project.

Flourishing economic relations between the Middle East and China have encouraged forecasts concerning a future political and military commitment of the Blue Empire in the region. The much-discussed withdrawal of the United States from the Middle East, no longer considered essential, seems to leave China with the role of policemen in one of the most unstable areas of the world.

The construction of the first military base outside Djibouti and the deployment of some warships between the Gulf of Aden and the Mediterranean lend credence to this belief. Nevertheless, Beijing has no desire to become entangled in the political and military plots of the Middle East. As various Chinese analysts emphasise, the attention of the country is concentrated on tensions in the Indian Pacific and the population would not understand such deep involvement
in such faraway theatres.

For that matter, following the principle of non-involvement in the internal affairs of other countries, China has kept out of all the conflicts in the region. The management of the Libyan dossier is a meaningful example of the defence of economic interests while avoiding political-military involvement.

Add to this the fact that, among the reasons for American involvement in the Middle East – to combat terrorism, defend Israel and the protection of petroleum-related economic interests – only the last of these applies to China. Even so, the management of such assets is rendered easier by their concentration in politically stable states, such as the Gulf states, Egypt and Iran, as well as by being in geographically restricted areas, such as the exclusive economic zones, the multi-purpose ports and the large cities of the Gulf. In conclusion, there is no sign on the horizon of a wave of Chinese imperialism in the Middle East.

Corrado Cok/CgP

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