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China’s recent foreign policy activism in the Gulf, much to the chagrin of the USA and the EU in the backdrop of Russia-Ukraine war, serves a specific strategic purpose – that is, to institutionalize China’s political relationship and economic cooperation with regional states and to promote a new approach to regional security cooperation and emerge as a leader in the region. It also highlights China’s enduring challenge of balancing its strategic engagement with Iran while seeking to deepen its ties with the Gulf Cooperation Council (GCC) states.
The visit by Iranian President Ebrahim Raisi to Beijing in February 2023 can be seen as part of activist role that China wants to play in this region. During Raisi’s visit, numerous agreements were signed between Beijing and Tehran to pursue the ambitious goals of bilateral trade and investment outlined in the 25-year agreement signed by China and Iran in 2021. Notwithstanding that the implementation of these agreements continues to be constrained by US sanctions and the stalled process of resuming the Joint Comprehensive Plan of Action (JCPOA), the initiatives have a long-term agenda and implications for the region and US presence as well as importance here.
The long-term prospect of China’s interplay with Iran and the Gulf is likely to be shaped by the interactive dynamics of US, local agency of regional states, and China’s strategy towards the Gulf, albeit aggressive, as it has been to exert influence in other regions. Beijing’s success in brokering the rapprochement between Saudi Arabia and Iran signals a distinctive role play in promoting regional security cooperation as well as a bigger role that it has always been seeking for.
In the past decade or so, China has become an increasingly important geo-economic actor in the Gulf region, which is seen by Beijing as central to its pursuit of energy security. According to Energy Information Administration (EIA) statistics, 40 per cent of China’s crude oil imports in 2021 came from the Gulf states, with 17 per cent from Saudi Arabia. Ref: China, Global Energy, and the Middle East . In 2020, China replaced the European Union as the GCC’s largest trading partner. Bilateral trade reached $161.4 billion.
Beyond trade and oil, China has been massively involved in regional physical and digital infrastructure investment. Cooperation in digital, space and green technologies between China and the Gulf states has also developed rapidly. The strategic location of the Gulf region in China’s Belt and Road Initiative (BRI) has facilitated this intensified economic engagement. Beijing is increasingly committed to pairing the BRI with national development strategies in the region, such as Saudi Vision 2030, the Abu Dhabi Economic Vision 2030 and Qatar National Vision 2030.
This ‘leapfrog growth of China-GCC relations’, as the Chinese President Xi Jinping calls it, which so far was not matched by commensurate Chinese efforts at institutionalizing this bilateral relationship has been infused with unprecedented vigour and vibrancy. China established contact with the GCC at its inception in 1981 and until very recently there had been no bilateral mechanism for regular contact and consultation between the two except the rather obscure China–GCC Strategic Dialogue first held in 2010. However, the activities and initiatives by both sides in the past six months indicate a positive dimension to this relationship.
The China–Arab States Cooperation Forum (CASCF) was established in 2004 by China and the Arab League as a biennial ministerial-level meeting. But not until Xi’s recent visit to Riyadh in December 2022 was the China–Arab States Summit launched. But, post that, series of visits from either sides and agreements and MOUs’ – are synonymous to the pace of the Forum on China–Africa Cooperation (FOCAC).
The Riyadh visit also launched the China–GCC Summit. It was, according to Chinese Foreign Minister Wang Yi, part of Beijing’s plan to implement ‘a top-level design for the development of China-Arab relations in the new era’. This suggests that recent Chinese Gulf policy initiatives are directed personally by Xi. Practically, these new initiatives serve a specific strategic purpose – that is, to institutionalize the rapidly expanding political and economic relationship between China and the Gulf states and more broadly, fill the space to elbow out USA. Xi’s summit diplomacy in Riyadh marks a decisive move in that direction.
Promoting security cooperation in the region is also part of this new foreign policy activism.
At the summits, two attempts by Xi clearly indicate that China is less risk-averse than before regarding a more proactive involvement in regional security issues. At his address at the China–Arab States Summit, Xi floated the idea of ‘building a common, comprehensive, cooperative and sustainable security architecture in the Middle East’. This call has elicited a positive responses from the Arab states. In his speeches at the summits, Xi also invited the GCC and Arab states to participate in China’s Global Security Initiative (GSI).
Though Iran’s reaction has been rather muted to the deepening of institutional links and security cooperation proposed by China with regional states in the Arab world – although not so its reaction to the China–GCC joint statement. Which clearly indicates that Iran will continue to cooperate in its own interest.
The Iranian government has exhibited some displeasure to the joint statement issued after the China–GCC Summit making specific reference to the territorial disputes between the United Arab Emirates (UAE) and Iran over three islands in the Strait of Hormuz[3]. It affirms support for the parties concerned to seek a peaceful resolution of these territorial disputes ‘through bilateral negotiations in accordance with the rules of international law’. The joint statement issued in the English language as reported by the Saudi Press Agency also created the impression that China has sided with the Gulf states in regional conflicts. Interestingly, the Chinese version of the joint statement differs subtly yet significantly from the English version cited above on one important point. It calls for regional states to come together to ‘address the Iranian nuclear issue and destabilizing regional activities.
Raisi’s state visit to Beijing in February 2023 at the invitation of Xi clearly provided an opportunity for China to redress the Iranian grievances, not least the China–GCC joint statement. Xi went out of his way to reaffirm that ‘China supports Iran in safeguarding its sovereignty, independence, territorial integrity and national dignity’. Importantly, it was during Raisi’s visit to Beijing that the Chinese forwarded Riyadh’s proposals for dialogue, which were accepted by the Iranians.
Iran and the Gulf states indisputably occupy different places in China’s geopolitical and geo-economic calculus. While developing its strategic partnership with Iran, China has avoided direct confrontation with the US. It is free-riding on rather than challenging the security order provided by US power in the Middle East. Though concerned about Iranian destabilizing activities that may disrupt China’s energy supply chain and jeopardize its pursuit of energy security drawing Iran into the Shanghai Cooperation Organization (SCO) is a critical move on China’s part to socialize Iran into multilateral security cooperation and a counter-balancing measure vis-à-vis American power.
The long-term prospects for China’s interplay with Iran and the Gulf are likely to be shaped by the interactive dynamics of three particular aspects.
First is the question of US power in the region. In spite of intensified global strategic and technological rivalries between the US and China, the security umbrella provided by US military power has facilitated China to rapidly and steadily establish itself in the past decade or so as a most significant geo-economic player with high stakes in the Gulf. China is becoming an important player in the regional security calculus and the geopolitics of the region and to carry out its ‘zero-enemy’ and ‘all friends’ policy in the Gulf.
So far, Washington does not seem to have considered the Gulf and more broadly the Middle East as a main theatre for US–China strategic rivalries. The National Security Strategy of the US published in 2022 in fact relegates the Middle East to the fourth tier in pursuit of a regional security strategy after the Indo-Pacific, Europe, and Latin America, and just above Africa. China exploits this perception.
All this may change. As US–China strategic rivalries continue to intensify, these would spill over to the Gulf and the Middle East. Will regional security become collateral damage even if China does not seek any significant security role there? Which is most unlikely given China’s intention of being a parallel pole.
Beyond the factor of structural power, there is the question of the agency of regional states. The strained relations of the US both with Saudi Arabia and with the UAE may have created an opportunity for China to deepen ties with these two regional powers. Reliance on Washington as a supplier of advanced weapon systems is also waning as they move to cooperate more closely with Beijing on developing digital technology and even ballistic missile technology and armed drones. Though as US remains their partner of choice because of its irreplaceable role as a regional security provider, even as these states strive for strategic autonomy for the time being, China is building up the perception of having military capabilities and the political will to provide a viable alternative to the US.
An emerging pattern of great power engagement in the Gulf region sees a tacit arrangement forming that is largely to the preference of the GCC states. Whereas the US continues to play the role of regional security public goods provider, China has increasingly become an economic public goods provider for the region. This is, interestingly, not dissimilar to the existing pattern in the Asia-Pacific. Though, the US and China are not contesting for regional supremacy in the Middle East as they are in the Asia-Pacific as of now, it may soon happen.
Can the Gulf states help to sustain this pattern of great power engagement with the region with effective policies that maintain the geopolitical and geo-economic equilibrium when they cannot agree on a unified regional approach to China? How can they navigate the escalating strategic rivalries of the US and China when promoting their regional agenda? This will remain a challenge for China and the GCC & Iran.
Finally, there is the question of China’s regional strategy towards the Gulf. As a geopolitical actor, though China is relatively new to the Gulf region, Beijing has recently successfully brokered a deal for Saudi Arabia and Iran to resume diplomatic relations[7]. This proactive engagement in promoting regional security cooperation may suggest changes of China’s regional policies, which tend to be pragmatic and opportunistic. It is worth noting, however, that Beijing sees this deal as ‘a robust and successful effort to put the Global Security Initiative into practice’ and as demonstrating China’s constructive role in ‘facilitating the proper settlement of hot-spot issues around the world’ rather than its changing regional strategy.
Chinese foreign policy practice has long prioritized the country’s relationship with great powers. Relationships with neighbouring states in the Asia-Pacific and Eurasia come second, being a dominant power as it perceives itself. China’s relationship with developing countries in other regions more generally was rarely a strategic priority but not anymore. As a direct contest for regional supremacy between the US and China in Asia-Pacific and now Eurasia, the Middle East, the Gulf region may also become pivotal to China’s grand strategic concerns and another region of power play.
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