China’s Growing Sway in the Middle East

By Henry Srebrnik, [Saint John, N.B.] Telegraph-Journal

China’s mediation between archrivals Saudi Arabia and Iran in March surprised the world. The fact that representatives of these archrivals on the Persian Gulf even agreed to resume diplomatic relations on March 10 caused quite a stir.

The agreement between the regional rivals to reopen embassies after a seven-year hiatus was brokered in secret by China. It raised questions over whether Riyadh had lost trust in Washington as a defender of its security and showed waning American influence in the region.

The Chinese managed to do what no one else, including the United States, had done and this has added a new dimension to China’s role in the Middle East. It was noteworthy because of Beijing’s leading role, and Washington’s absence, in the diplomacy that led to it.

Riyadh was angry with the U.S. It had expected an American response to an attack on Saudi oil facilities in September 2019, carried out by Iranian-backed Houthi rebels in Yemen. When none was forthcoming, the kingdom reassessed its view that it could depend on Washington, making direct diplomacy with Tehran more attractive.

Beijing was able to step in because they had the relationship and the leverage with both sides to try and accomplish this. The U. S. is no longer the indispensable power in the region and the only country strong enough to broker peace deals. China has claimed a share of that.

A key reason why many of these countries have a benign view of China is “because they have not seen China conduct itself in a way that would be threatening to them, or that has the potential of being threatening,” Trita Parsi, executive vice president of the Quincy Institute for Responsible Statecraft in Washington, told Al Jazeera April 25.

China is also not associated with a particular cause, like Washington’s close relationship with Israel, and has no history of punitive action, whether through military action or sanctions, in the region.

At the beginning of last December, China’s president, Xi Jinping, had been welcomed at the first ever Arab-Chinese summit in Riyadh. He pledged that he would use Beijing’s influence with Iran to close a deal with the Saudis. That meeting dispelled the impression that China was only interested in doing business in the Gulf. After all, a significant part of China’s energy supply depends on stable conditions in the Gulf region.

China is by far the most important trading partner for both Iran and Saudi Arabia and is the biggest buyer of oil from the two nations. In recent years, it has further cemented these relationships, signing a 25-year cooperation deal with Iran in 2021 and a comprehensive strategic partnership agreement with Saudi Arabia in 2022.

In other parts of the Middle East, too, trade with China is three times greater than trade with the United States. China invested more than $273 billion in the region between 2005 and 2022. It also buys oil from Iraq, gas from Qatar, and it exports weapons to Algeria, Morocco, Turkey, Egypt and Saudi Arabia. It is helping Egypt build its new capital outside Cairo and has constructed the metro rail network in Mecca. The Belt and Road initiative, China's flagship global infrastructure project that started in 2013, has also allowed Beijing to expand its influence across the region.

More evidence of the closer relationship between the Chinese and Saudis came recently when King Salman bin Abdulaziz on March 29 authorized the nation’s bid to become a partner in the Shanghai Cooperation Organisation (SCO), a Eurasian bloc including China, India, Iran, Russia and a number of central Asian states. It is dedicated to fostering multilateral cooperation in the realms of security, economy and politics.

Saudi Arabia’s ascension to the SCO, along with potential fields of cooperation between Iran and Saudi Arabia including on transportation, communication and geopolitical issues, may have already been discussed in Beijing during the discussions on normalising Tehran-Riyadh ties.

All members seeking admission to the organisation must not be hostile to existing members and maintain active relations with them. Saudi Arabia’s membership enhances energy accessibility for SCO members, including China. It also allows the SCO to get involved with regional security in the Middle East.

Another SCO objective is the establishment of a financial system independent of western financial arrangements. Currently, close to all major financial transactions, including in energy markets, are denominated in dollars. The dollar accounted for 96 per cent of world trade in recent decades, while the Chinese yuan came in at two per cent in 2022. After all, China, Russia and Iran all have an interest in working around U.S. sanctions and the dollar.

So the Middle East, so long a zone of confrontation, is becoming a balancing game. These countries are repositioning themselves in view of the current political climate, especially since the outbreak of the Ukraine war.

Saudi Arabia is newly friendly with China and Iran and is now balancing its security by playing off the U. S. against China. The United Arab Emirates is courting China, too, but it is also maintaining its defence relationship with Washington.

If this becomes the new norm, in which China is a peacemaker, it will negatively impact America’s global influence and help China portray itself as a stabilizing force in the world.