October 7, 2013, by Editor

China’s presence in the Middle East remains shallow

Written by Sophie Roborgh.

Speculations abound about the increase of China’s footprint in the deserts, construction sites and negotiation rooms of the Middle East. However, despite signs of increased attention for the Middle East, the role of Beijing in the region should not be overstated.

China’s involvement in the Middle East is generally attributed to its search for resources and economic opportunities, in order to sustain economic development and secure political quiet at home. Its increasing thirst for energy, as it is set to overtake the US as the world’s largest oil importer this year, is predominantly quenched by the Middle East, with the region accounting for roughly half of its total oil imports. China is for instance Saudi Arabia’s prime oil recipient and the relationship expands into a number of joint endeavors, for instance in downstream refining in Guangdong, Shandong, and Fujian. Controversially, China is also Iran’s main client for oil, concluding several oil and gas deals with long term supply commitments, and engaging in the development of the Azadegan and Yadavaran oil fields, among others.

These endeavours in the energy and petrochemical sectors have been sustained by a plethora of Chinese activities and investments in non-energy sectors, such as labor services, engineering, machinery and heavy equipment, light manufactured goods, defense, construction, infrastructure, automobiles, telecommunications, health, tourism, etc.  In 2010 China surpassed the US as the top exporter to the region, and is set to be the largest trade partner for regional powers such as Saudi Arabia. Its engagement in the region includes high-profile public projects, such as the building of the Grand Mosque of Algiers in Algeria, and contributions to the Haramain High Speed Rail Project linking Mecca and Medina, for which approximately 1600 construction workers conveniently converted to Islam in order to work in the Muslim-only Holy Cities.

Economic activities are accompanied by the arrival of Chinese students and expats, the establishment of Chinese language programmes, the provision of Chinese scholarships to Arab students and vice versa, and the establishment of Arab language media channels on China. In states such as Algeria, Chinese citizens make up the largest group of foreign workers. In China, meanwhile, Hong Kong is looking to become an Islamic finance hub, and the needs of the Islamic business community are catered for by a rapidly expanding halal food industry.

Also in diplomatic efforts, China has become more vocal. It pulled off a diplomatic feat by simultaneously hosting Israeli and Palestinian leaders of state, speculating about playing a larger role as a broker in the peace process. Moreover, it takes a more active approach in addressing the nuclear ambitions of Iran, where due to its continuing economic engagement it actually possesses the economic influence the West is increasingly lacking.

But is China indeed the big player in the region it is sometimes said to be, or prophesied to become? The above examples of increased Chinese presence in the region provide only part of the picture. First of all, despite double digit annual growth rates in trade and investment, Chinese FDI continues to make up a shallow 2% of total FDI in the region due to its low baseline. The Middle East remains a minor player in China’s portfolio as well, with investments in the region dwarfed by expenditure in states such as Indonesia, Australia, the US, and in the European Union. Moreover, business relations have not always been easy, as shown by the disputes surrounding the Mecca-Medina rail connection, and fall-outs over energy contracts with Iranian partners.

Secondly, China’s activities in the Middle East are far from universally embraced. In Algeria, a backlash occurred against the perceived insensitivity and corruption of Chinese partners. China’s schizophrenic approach of suppressing the Uighurs and hampering Islamic religious practices domestically on the one hand, while courting the international Islamic community on the other hand, has led to some raised eye brows in the Middle East, although a public outcry has failed to materialize to date. In addition, China’s overdue support for some of the region’s most disputed authoritarian regimes, such as Libya’s Qaddafi regime, created some reluctance on the part of new post-revolution administrations to engage with China.

Finally, China does not have the wherewithal (yet), nor the local connections, to be able to take a more active approach to securing calm in the region. Participation in the anti-piracy surveillance activities in the Gulf of Aden, for instance, has been regarded as a stretch for China. Generally, it has opted for a more defensive approach instead, characterized by a policy of diversification, in which it courts regional friends and foes.

This pragmatic, inclusive approach provides China with a seat at many tables, but also limits its influence. Despite having the advantage of lacking regional enemies, China lacks true friends as well. By attempting to be everybody’s friend, it ends up being nobody’s partner of choice. China’s pragmatic approach may have worked well in the relatively stagnant pre-Arab Spring days, where aggressive rhetorics were seldom matched with actions on the ground. However, it remains to be seen whether its approach befits the increasingly politicized atmosphere currently characterizing local, national and transnational relations.

Regional tensions are increasing over who to back and how to contain the Syrian conflict, the disposal of Egypt’s President Morsi, and the rough wake-up call regarding the desirability and viability of the ‘Turkish’ Islamic democracy model. Domestically, newly elected governments and autocratic monarchs are struggling to meet the challenges of economic stagnancy and an increasingly vocal and politicized population impatient for solutions. China’s pragmatic approach, aimed at securing economic and political access regardless of who holds power, goes against this zeitgeist where identity and loyalty are emphasized. Although its abstinence of regional and national power struggles has proven to be successful in the past, being everyone’s friend in a context of high political tension may raise more distrust than appreciation in the new Middle East.

It is questionable whether its current approach will allow China to take the next step in building its regional relationships: that of becoming a trusted partner of preference instead of just another foreign passerby in the Middle East. By staying the same course, China is likely to remain a marginal player instead of becoming a central power broker.

Sophie Roborgh is a strategic analyst focusing on political, social and security questions relating to the Middle East.

Posted in China-Middle East