In geopolitics, as
the saying goes, there are no permanent friends or permanent enemies, only
permanent interests. More often than not, bilateral relations require a
constant calibration of those interests from both sides. Such is China’s
relationship with other superpowers, including the US and Russia. And it is the
same for China’s relationship with powers in the Middle East, such as Saudi
Arabia.
اضافة اعلان
Much has been
said about the strategic importance of Chinese President Xi Jinping’s recent
state visit to Saudi Arabia, during which he also attended the first China-Arab
Summit and the first China-GCC (Gulf Cooperation Council) Summit. China is
expanding its influence in a region that remains one of the most strategically
critical in the world due to its energy resources.
With the decline
of the US presence in the Middle East, China’s engagement with Saudi Arabia, a
longstanding ally of Washington, and with other Gulf countries, is viewed with
suspicion from America. In particular, the contrast between the grand,
high-profile reception Riyadh laid on for Xi and President Joe Biden’s rather
understated trip earlier in the summer, is illustrative of China’s rapid
ascension in the Middle East. It is a rise that may even be displacing the US
as the region’s most prominent external superpower.
Many practical
considerations have brought China and Saudi Arabia, and other Gulf countries,
closer. As the biggest crude oil importer, China is Saudi Arabia’s largest
trading partner. The Russian war in Ukraine has driven up energy prices and
sparked a supply crisis, leading China to push to protect its sources of crude
oil. Based on this alone, there is no doubt that ties between China and Arab
countries will continue to grow.
China is the
largest consumer of Middle Eastern oil, with 47 per cent of its imports coming
from the region. With energy security at risk, China has a personal stake in
the stability of Gulf countries and broader peace and security in the region.
China fears that the US has the ability to sabotage its energy supplies from
the Middle East and therefore Beijing sees a dire need to consolidate its
influence there and minimize its vulnerability.
China is hoping
to reach carbon neutrality by 2060, which aligns with Saudi Arabia’s desire to
shift away from fossil fuels to greener energy, such as hydrogen and solar.
Saudi Arabia is also investing heavily in new infrastructure projects, such as
those related to the NEOM megacity. This provides rich commercial opportunities
for China, which has vast experience building large-scale projects around the
world.
The decades-long
alliance between Washington and Riyadh has endured despite the fundamental
difference between their systems of governance, but there have been times when
this has caused friction. China, on the other hand, follows the principle of
non-interference in other countries’ internal affairs. Therefore, the internal
politics of Gulf countries is not an issue for China.
But along with
their shared interests, it is important to also understand the limitations in
China-Saudi relations, especially in terms of the pace and scope of the
cooperation they will pursue. For the 34 investment deals the two sides signed
during Xi’s visit, it is entirely unclear as to the nature of the arrangements
and the countries involved.
China is hoping to reach carbon neutrality by 2060, which aligns with Saudi Arabia’s desire to shift away from fossil fuels to greener energy, such as hydrogen and solar.
What is more
intriguing is the Chinese plan to increasingly use its own currency, the yuan,
instead of the dollar, to pay for oil and gas from the Gulf. Xi said China
would use the Shanghai Petroleum and Natural Gas Exchange, a state-backed
national energy trading platform, for this purpose. The move would be a threat
to the dollar’s dominance of the global oil market. Using Chinese yuan was
reported earlier this year as Saudi Arabia’s relationship with the US cooled.
Given China’s desire to boost its currency for global payments and the
significance of China’s energy trade with Gulf countries, it is understandable
why China would push for this.
However, Saudi
Arabia does not seem to have embraced the proposal. The Chinese media have also
dialed back their cheering of the step, recognizing that the energy trade is
severely subject to the constraints imposed by geopolitics. It now looks
unlikely that China will push the same issue in the near future.
While the Gulf
countries are getting closer to China, they still maintain critical ties with
the US. The regional dynamics and internal politics might be shifting, but it
is too early to assume that China is anywhere near to displacing the US as the
security guarantor. This is evident in China’s lack of meaningful involvement
in regional security. Beijing has developed a nascent desire for a more active
role, but an effective result remains to be seen.
Another
important limitation for China’s role in the Middle East lies in its tradition
of balancing diplomacy. China has historically remained neutral between Saudi
Arabia and Iran, and between Israel and Palestine. With Beijing’s rapidly
growing engagement with Gulf states, the question is whether China has
abandoned this approach. It is possible that China regarded a 25-year
cooperation agreement signed in March 2021 with Iran as adequate assurance to
Tehran that Beijing is still pursuing close ties with both camps. However, Iran
was angered by a reference to its island disputes with the UAE in the China-GCC
joint statement. China tried to make up by sending Vice Premier Hu Chunhua to
Iran on the same day. But as Hu is stepping down from the Politburo, the
political significance he carries is limited.
In this sense,
whether Xi’s trip to Saudi Arabia suggests a deviation of China’s traditional
approach will be a key issue in the future. If China begins to favor one side,
it will lose one of the most important diplomatic levers that have contributed
to its diplomatic success in the region.
Yun Sun is
director of the China program and co-director of the East Asia program at the
Stimson Center in Washington, DC. Syndication Bureau.
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