Webinar on China and the MENA region

Underlying Chinese interests in the region

The panellists initially addressed China’s economic interests in the region, which have grown substantially over the past decades, as Chinese imports of oil have increased by a factor of ten between 1990 and 2009, and exports to the Middle East have expanded from 10 billion USD in 1990 to 220 billion USD in 2016.

Professor Zhang explained that China is looking to maximize its economic benefits, while minimizing risks, and pointed to three main elements in its MENA-strategy: 1. Energy, since the region is a primary supplier of oil (for example, in 2019-2020, the Gulf countries supplied 40% of China’s oil imports); 2. Commodity trade, as China is seeking promising markets for its manufacturing industry; and 3. Infrastructure co-operation, given the focus on the Belt and Road Initiative (BRI), one of the most ambitious infrastructure projects ever conceived. Professor Zhang also emphasized that strengthening economic relations also improves political links and contributes to Chinese soft power, which matters since the Middle East and North Africa is one of the few areas where both governments and populations hold generally favourable views of China. For instance, the GCC countries work with Huawei, in contrast to western countries, and success stories in the region can help build trust in the BRI in other areas of the world.

Maha Yahya discussed the region’s reactions to Chinese engagement and investment, which she labelled as being “mixed to favourable”. Clearly, China is a major trade partner for many countries, including Egypt, Morocco, and Algeria. In Egypt, for example, China is financing 85% of the new capital being built. Moreover, the region is accepting that China is pursuing a “hedging strategy”, which seeks collaboration with all states, as is illustrated by strong ties to both Iran and Saudi Arabia. Yahya stated that China is increasingly being seen as an alternative to the US - “If the US is withdrawing, let’s go East,” – although the jury is still out on whether China truly is interested in reciprocating fully.

Ambassador Lentz analysed the China-Iran relationship, in the context of the 25-year agreement signed in the spring. This deal provides for 400 billion USD worth of investments over the period, and, if fully implemented – which remains uncertain – would amount to a major increase in Chinese investments, which have previously hovered around 3 billion USD annually. “For China, Iran is an interesting partner, and it is welcoming the new government in Iran,” said Ambassador Lentz, adding that being granted full membership in the Shanghai Cooperation Organization represented a “political and diplomatic prestige move” for Iran.

From economic muscles to a security player?

The panellists also discussed whether China’s growing economic strength would translate into hard power and military influence in the region. Professor Zhang argued that China lacks the capacity and will to challenge the US position, given its limited security interests in the MENA region. She nonetheless pointed to certain clear security interests in the region, namely 1. Protecting Chinese companies and citizens’ safety; 2. Preventing negative political spill-over into China from such events as the Arab spring; and 3. Ensuring territorial integrity. Professor Zhang did not see tensions between the US and China elsewhere in the world extending to the Middle East, since there is common ground in terms of curbing terrorism and helping oil rich countries to diversify their economies.

Maha Yahya stated that the region is already a sandbox for great power competition, which has been the case since Russian re-entry into the Syrian conflict. “With the tactical US withdrawal, the region is transforming into a multi-polar system, and China is in the midst of this transformation, and has managed to work with all sides.” According to her, China’s strategic priorities are security and stability, including ensuring maritime security and preventing an Iranian-Saudi conflict, which would lead to oil price increases. The focus is on the maritime Silk Road initiative, which involves keeping the sea lanes open (including the Suez Canal), combatting piracy around the Arabian peninsula, and carrying out security drills with both Saudis and Iranians.

Afghanistan, arms sales and the pandemic

The issue of Afghanistan, in the light of the recent Taliban take-over, was also addressed. In contrast to the Middle East, Afghanistan is a neighbour of China, and hence there are greater economic and security interests there. China fears, for instance, that instability in Afghanistan will spill over into its own territory, possibly through the pandemic. According to Professor Zhang, China will support reconstruction efforts in Afghanistan, and take an active role, even if this helps the Taliban assert control over the country.

In line with previous webinars, the issue of arms sales by an external actor – in this case China – to the region was also touched on. Chinese arms sales are increasing, albeit from a low level – and a level much lower than that of Russian or American sales. Already in the 1980s China sold weapons to both Iran and Iraq, for instance, and today it sells to both Israel and the Arab states. It was also mentioned that when the US refrained from selling drones to Saudi Arabia, China moved in and starting selling them instead.

The panellists also discussed how the pandemic has affected China-MENA relations. It was pointed out that China primarily exported vaccines to the region, rather than donating them, and that there has been relatively little discussion in the region about the origins of the virus. In Iran, Chinese vaccines have been popular – more so than domestic ones – and have been taken by many. Overall, Covid has brought both risks and opportunities for China in the Middle East and North Africa. On the one hand, the pandemic has delayed or interrupted BRI projects across the region, with political and economic consequences; on the other hand, many Middle Eastern countries have seen the successful Chinese example of countering the pandemic through rapidly developed vaccines.

Chinese decision-making processes and some advice to Swedish diplomats

The audience was also cautioned against a simplistic analysis of Chinese interests and decision-making processes. “China is not only top-down. There are many interest groups. The top leaders suggest the general idea, but then regional governments, intellectuals and think tanks interpret and re-interpret the original concept.” For instance, when the Belt and Road Initiative was first launched, environmentalists spoke about the “green” BRI, others focused on the infrastructure aspects, and yet others on the exchanges with religious constituents along the road.

Finally, the panellists were asked to provide some advice to Swedish diplomats covering the region, and made the following suggestions: 1. Pay particular attention to how China navigates between its economic and security interests, and how its investment strategy develops in the coming years; 2. Focus more on what China does, rather than what it says, since its discourse is often intended to please the sentiments of nationalists, and thus it aims to “show China as a winner domestically"; and 3. Pay more attention to China in the same way as with Russia and the US, and to learn Chinese.