Commentary

China’s Middle East Model

May 23, 2019

As the Chinese economy grows and the country’s thirst for energy grows apace, China sees no alternative to deepening its Middle East ties. China’s strategy, though, is to build relations with individual countries rather than with the region as a whole. China seeks very different things from each of its regional partners, and it seeks to preserve its regional interests by keeping its bilateral relationships distinct. In their totality, they challenge the U.S. approach to the region.

China has five principal partners in the Middle East. The first is Saudi Arabia. The Kingdom is China’s largest trading partner in West Asia, and China is Saudi Arabia’s largest trading partner worldwide. Chinese construction firms have been playing a growing role in developing Saudi infrastructure; meanwhile, Saudi Arabia has been especially eager to build refineries and petrochemical production facilities in China that are specially tailored to use Saudi grades of crude oil. Saudi Arabia seems to be developing China as a hedge against a decline in Western oil consumption, and also a hedge against Western discomfort with authoritarianism within Saudi Arabia.

China’s Arabian Peninsula ties extend beyond Saudi Arabia. China is also the United Arab Emirates’ largest trading partner, and Dubai Port is a vital global shipping and logistics hub for Chinese goods. More than 200,000 Chinese nationals live in the UAE, which is emerging as an entrepot for Chinese traders seeking proximity to overseas markets. The UAE sees a leading role for itself in China’s Belt and Road Initiative, building on what is already a robust trading relationship. China has proclaimed “comprehensive strategic partnerships” with both oil-producing heavyweights, giving at least verbal acknowledgment of the importance that China ascribes to two of the closest U.S. partners in the region, and vice-versa.

In the last five years, as China has grown increasingly concerned with transit through the Suez Canal, China has invested billions of dollars in Egypt. Chinese firms are helping construct Egypt’s new administrative capital in the desert outside of Cairo, and they are developing a Red Sea port and industrial zone in Ain Sukhna. President Sisi has made at least six trips to Beijing since taking office in 2014, compared to just two trips to Washington.

The fourth country is Israel. After the United States put a definitive end to Israeli cooperation with Beijing on military technology with U.S. roots, Israel built its strategic importance to China through deep commercial relationships in advanced technology and government-to-government cooperation in the security and counterterrorism fields. It is remarkable just how quickly these ties have developed. According to Thompson Reuters, Chinese investment in Israel increased tenfold between 2016 and 2017, totaling more than $16 billion. Chinese firms are deeply engaged in Israeli infrastructure, building tunnels for light rail, expanding port facilities in Ashdod and Haifa, and striking agreements to operate the ports for 25 years.

The fifth country, and China’s contrarian hedge in the Middle East, is Iran. Iran serves a number of purposes for China: It is an energy producer hostile to the United States in a region of U.S. allies, and it is a terrestrial power at the opposite end of Asia that helps China establish trade routes that the U.S. Navy cannot disrupt. Because Iran is, from a Chinese perspective, out of step with the rest of the Middle East, a relationship with Iran helps insulate China from U.S. efforts to squeeze it. Economically, Iran is a distressed asset in a region of overpriced opportunities, appealing to the mercantilist strain in Chinese foreign policy.

But perhaps most importantly, Iran serves China’s strategic interests. It draws down the U.S. military presence in the Western Pacific and commits assets to the western Indian Ocean. In the Trump administration, in particular, U.S. conflict with Iran splits the United States from its allies and helps create a more bilaterally organized international system in which China is superior to every country but one—and in which the degree of U.S. primacy over its adversaries is significantly diminished.

China’s Middle East strategy, then, is not so much a single regional strategy as a portfolio of investments. China’s national ambitions in each country are narrowly focused on economic ties, and state-owned enterprises closely follow governmental priorities. The United States has seemingly comprehensive plans in almost every country but few resources, and a business community that follows profits wherever they can be found.

The biggest difference between the two approaches is what they promise. China promises broad-scale economic development without social upheaval. The United States promises a more thoroughgoing reform of society, delivering both development and resilience.

The U.S. approach has delivered results in South Korea, Japan, Taiwan, Germany, and elsewhere, but much of the groundwork was laid in the Cold War environment of the 1950s and 1960s. More recent examples are harder to find. Tens of billions of dollars and decades of effort have not made Egypt wealthy, for example, and the world is full of instances where U.S. development efforts failed to meet their goals.

The task facing the United States is to persuade countries of the superiority of its more holistic approach to development. That is partly about demonstrating the positive outcomes of U.S. efforts, and partly about highlighting the shortfalls of the Chinese approach.

One part of the Chinese approach that is worth emulating, though, is its combination of focus and seriousness. China has serious goals and serious plans to reach them. The United States often seems wedded to a baseline of activities that reflect what it has done rather than what it should do. A rethinking of U.S. priorities, objectives, and policy instruments in the Middle East is long overdue.

(This commentary originally appeared in the May issue of Middle East Notes and Comment, a newsletter of the CSIS Middle East Program.)

Jon B. Alterman is a senior vice president, holds the Zbigniew Brzezinski Chair in Global Security and Geostrategy, and is director of the Middle East Program at CSIS.

Commentary is produced by the Center for Strategic and International Studies (CSIS), a private, tax-exempt institution focusing on international public policy issues. Its research is nonpartisan and nonproprietary. CSIS does not take specific policy positions. Accordingly, all views, positions, and conclusions expressed in this publication should be understood to be solely those of the author(s).

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