Why is China’s role in the Middle East growing?

UMUT ERGUNSÜ

As the second biggest economy in the world with an official GDP growth rate of 6.9 percent in 2015, China has to satisfy its growing oil and gas requirements. Furthermore, in order to manage the transition to steadier and more sustainable economic growth, it needs to find new markets to export its products. The Middle East is an excellent partner for China to achieve the aforementioned goals.

China is either the biggest or second-biggest trading partner for Middle Eastern countries, leaving Europe and Japan far behind but trailing the United States. In the near future, however, it will overtake the U.S. to top the list of trading partners of the region as a whole.

China-Middle East trade has increased dramatically in recent years, growing by more than 600 percent in the past decade to $230 billion in 2014. The trade is driven by China’s growing oil demand. In 2015, China became the world’s biggest importer of crude oil, more than half of which came from the Middle East. According to the International Energy Agency, by 2035, China’s imports from the region will double.

China’s exports to the region mostly consist of electronic products, clothing, toys, chemicals and even cars.

Chinese President Xi Jinping announced that the trade volume between the two is expected to top $500 billion by 2020. To keep up with the growing trade, the Middle East’s first clearing bank was recently opened in Qatar to handle transactions in yuan.

In addition to trade, Chinese firms have already taken part in building the Istanbul-Eskişehir high-speed railway and are building two harbors in Egypt, Tehran’s metro, and a high-speed railway between Mecca and Medina.

From a political standpoint, China’s policy of non-interference in the internal affairs of other countries brings Middle Eastern countries closer to China. In other words, one of the reasons for the popularity of China is that it does not attach any strings such as democracy, freedom of speech or human rights when it comes to doing business with the autocratic regimes of the region.

Furthermore, the Chinese model has an appeal for most of the countries in the region. They would like to learn how to implement the Chinese model where economic development is maintained in an environment where democracy is absent.

China’s Arab policy paper

Traditionally, China’s Middle East policy was designed to reflect its energy needs; but lately, there are strong indications that China has started to formulate a more comprehensive strategy toward the region. Details of this strategy can be found in China’s first Arab policy paper, which was released a few days before Xi started his Middle East tour. Xi’s visit to the Middle East, which included stops in Saudi Arabia, Egypt and Iran, can be seen as the first step for the implementation of this policy paper.

In the policy paper, the framework of the relations are explained using the “1+2+3 cooperation pattern,” with energy cooperation as the “core,” infrastructure construction and trade and investment facilitation as the “2” wings, and nuclear energy, space satellites and new energy as the “3” breakthroughs.

‘One Belt, One Road’ initiative

The policy paper also notes that China’s “One Belt, One Road” initiative will serve as the framework for the “1+2+3” cooperation. The Middle East’s oil reserves, geopolitical location and economic opportunities have become vital for China’s grand “One Belt, One Road” initiative.

One of the important institutions to implement this initiative is the Asia Infrastructure Investment Bank (AIIB), in which Turkey, Iran, Jordan, Egypt, Saudi Arabia, the United Arab Emirates, Oman, Qatar, Kuwait and Israel have all signed up to be founding members.

As China marches west, the Middle East is looking east. It’s not only the government’s views; popular opinion in the Middle East is also changing in favor of China. According to a recent Pew Research, more than half of Arabs support China while less than one in three have a positive view of America’s role in the Middle East.


*Umut Ergunsü is a PhD candidate in Peking University’s International Politics Department specializing in Turkish-Chinese economic and trade relations.