Written by James M. Dorsey, S. Rajaratnam School of International Studies
The hardening of Middle Eastern fault lines is likely to make it difficult for China to remain aloof.
Subtle shifts in Chinese energy imports suggest that Beijing may be able to exert influence in the Middle East in alternative ways that do not involve military or overt economic pressure. The shifts involve greater dependency of Gulf states on oil and gas exports to China, the world’s largest importer, at a time that the People’s Republic has been diversifying imports at the expense of Gulf producers.
The shifts first emerged in 2015 when Chinese oil imports from Saudi Arabia rose a mere 2%, while purchase of Russian oil jumped almost 30%. Since then, Russia rather than Saudi Arabia has been China’s biggest crude oil supplier for most of the time.
The marker changes were reinforced by the US shale boom, a resulting drop in US imports from the Gulf, and President Donald Trump’s tougher trade policies. “With the Trump administration, the pressure on China to balance accounts with the U.S. is huge … Buying U.S. oil clearly helps toward that goal to reduce the disbalance,” said Marco Dunand, chief executive and co-founder of commodity trading house Mercuria.
At the same time, China became in 2016 the largest investor in the Arab world. These investments are worth $29.5 billion, much of which targets infrastructure, including the construction of industrial parks, pipelines, ports and roads.
Compounding the impact of shifts in Chinese energy imports is the fact that, despite support for Russian policy in the Middle East, Beijing increasingly fears that Moscow’s approach risks escalating conflicts and has complicated China’s ability to safeguard its mushrooming interests in the region. Viewed from Beijing, the Middle East has deteriorated into a part of the world in which regional cohesion has been shattered, countries are fragmenting, domestic institutions are losing their grip, and political violence threatens to effect security and stability in northwest China.
China’s concern is likely to increase if and when the guns fall silent in Syria and the country begins to focus on reconstruction. Already, China worries that Uyghur — Muslims from China’s Xinjiang province — militants in Syria and Iraq are heading to areas closer to Xinjiang in Pakistan and Afghanistan. An end to the war in Syria, moreover, opens up economic opportunity, but is also likely to sharpen rivalry between Russia and China as that will play to Beijing’s strength and highlight Moscow’s weakness.
Beijing’s interest in Syrian reconstruction goes beyond dollars and cents. “Syria can be a key logistics hub for China. Its history is the key to bringing stability in the Levant, meaning it has to be incorporated into China’s plan in the region. From a security perspective, if Syria is not secure, neither will [be] China’s investment in neighbouring countries,” said Kamal Alam, a Syrian military analyst.
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Credible Alternative?
All of this raises the question of how Beijing can best stand up for its interests against the backdrop of a perception among Chinese scholars that China’s unsuccessful efforts to mediate in multiple conflicts in the Middle East, including Israel-Palestine, Syria and the Qatar crisis, have failed to position the People’s Republic as a credible alternative to the US and Russia.
Pouring fuel on the fire is the fact that Chinese support for Russian policies in the United Nations Security Council and elsewhere has effectively identified Beijing with Moscow, rather than allowed it to differentiate itself. The Middle East has already forced China to move away from long-standing principles that underwrote its foreign and defense policies for decades. These include non-interference in the domestic affairs of others and a refusal to establish foreign military bases.
In part, China has been able to maintain the dichotomy between theory and practice by evading public discussion on issues such as whether and under what circumstances it should use military force or apply economic pressure, as it did in 2016 when it expressed discontent with a South Korean decision to deploy a US THAAD anti-missile system.
Beyond the establishment of China’s first foreign military base in Djibouti, Chinese special forces have been advising Syrian President Bashar al-Assad’s regime in its operations against jihadists, and they have operated on the Afghan side of the Central Asian nation’s border with the People’s Republic.
China scholar Andrea Ghiselli noted that Chinese diplomats, scholars and journalists seldom focus on security in public, pointing instead to “the positive elements” of China’s relationships in the Middle East. Nevertheless, Ghiselli observed that few Middle Eastern leaders attended the 2017 Belt and Road Forum in Beijing, which was intended to showcase China’s Eurasian-focused infrastructure investment initiative as “a more open and efficient international cooperation platform; a closer, stronger partnership network; and to push for a more just, reasonable and balanced international governance system.”
The Qatar crisis has rendered the Gulf Cooperation Council (GCC) impotent and complicated negotiations for a free trade agreement with China. Similarly, a potential withdrawal this month of the United States from the Iran nuclear deal would likely put China at odds with Middle Eastern proponents of a tougher attitude toward the Islamic Republic. These include Saudi Arabia, the United Arab Emirates and Israel.
Change Of Plan For China
The hardening of Middle Eastern fault lines is likely to make it difficult for China to remain aloof and emphasize economic and trade relationships without getting sucked into the region’s multiple conflicts.
Saudi Arabia has so far refrained from making economics a fixture of its relationships as it attempts to counter rising Iranian influence in the Middle East. Together with the UAE, Riyadh has also not attempted to force third countries to abide by its boycott of Qatar. The question, however, is whether the GCC states will maintain their caution. Omar Ghobash, the UAE ambassador to Russia, suggested in June 2017 that the anti-Qatar alliance could “impose conditions on our own trading partners and say you want to work with us [and] then you have got to make a commercial choice.”
This alliance has so far not acted on Ghobash’s suggestion, in part because the international community — including China — has called for a negotiated end to the crisis and refused to back the Saudi-Emirati position.
The shifts in China’s energy imports, coupled with Beijing’s need to protect its interests, mean that the People’s Republic may be in a position to leverage its power in alternative ways.
“This … gives China significant leverage to impose its preference in oil contracts and improve its own energy security. It also means that China has the capability to greatly determine the economic future of countries currently engaged in all the regional hotspots, a costly endeavor that cannot be sustained without matching capital inflows,” Ghiselli said.
“Thus far,” he added, “China has bought oil and gas from both Sunni and Shia countries without showing evident preferences. However, were China to do otherwise, its actions might bring produce deep changes in the region in ways not different from those of a military intervention in favor of one of competing parties.”
James M. Dorsey is an award-winning journalist and commentator on foreign affairs who has covered ethnic and religious conflict and terrorism across the globe for more than three decades. Over his career, Dorsey served as a foreign correspondent for, among others, The Wall Street Journal, The New York Times, The Christian Science Monitor and UPI in the Middle East, Europe, Africa, Central America and Washington. He is currently a senior fellow at the S. Rajaratnam School of International Studies at Nanyang Technological University in Singapore and the author of the blog, "The Turbulent World of Middle East Soccer." This article was originally published on Fair Observer.
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