How long can China stay neutral in the Middle East?

In 2005 George Clooney starred in the geopolitical thriller, Syriana. One of the movie’s plot lines involved competition between Chinese and US oil interests in a fictional, oil-producing, Middle Eastern emirate. There is a memorable scene of Arabic-speaking Chinese oil executives shaking hands with their emirate counterparts.

Looking back now, it seems Hollywood was a step ahead in depicting what has come to be a transformative trend in Middle Eastern geopolitics. The extent of the Middle Kingdom’s involvement in the volatile region was recently on show for the world to see in a four-day, whirlwind tour by China’s president Xi Jinping that included visits to bitter regional rivals, Iran and Saudi Arabia.

China now has many vital interests in the region. The country has replaced the US as the world’s largest oil importer since the onset of shale gas revolution, and it sources more than 50 per cent of its crude oil from the Middle East. Chinese state-owned energy giants, including China National Petroleum Corporation, have invested more than $60 billion in the region, according to Lu Ruquan, the head of the CNPC’s overseas operation.

Chinese construction companies are also busy building highways and railway tracks in the Middle East, including a railway to link the holy cities of Mecca and Medina. Chinese traders are flocking to the region to pursue many different business opportunities, including the sale of lingerie in Egyptian bazaars. Trade between China and the region, worth $230bn in 2014, has increased more than sixfold in the last decade.

Apart from these growing economic and trade ties, China is beginning to flex its military muscle in the region.

The People’s Liberation Navy is patrolling the Gulf of Aden as part of the UN anti-piracy exercise. Beijing is also building its first ever overseas military base in Djibouti, which is just across the water from the Arabian Peninsula. The PLA’s jets have also refuelled in Iran, the first foreign military unit permitted in the Islamic republic since the 1979 revolution.

Perhaps more importantly, the region is an integral part of Beijing’s Belt and Road strategy, President Xi’s signature foreign and economic policy. This calls for the building of an economic belt along the ancient Silk Road through infrastructure building and co-operation in sectors such as energy, telecommunication and manufacturing. The Chinese foreign minister describes it as the centre piece of the country’s foreign policy and the premier says it should the top priority for economic policy makers too.

This confluence of factors has prompted Beijing to take a more proactive interest in the region in recent years. The pervading attitude is typified in the views of influential Chinese foreign policy experts such as Wang Jisi of Peking University, who has called for Beijing to look West (that is, toward Central Asia and the Middle East) to counter the Obama administration’s Pivot to Asia.

Wang argues the strategic rivalry between China and the US in East Asia increasingly resembles a zero-sum game. In the Middle East and Central Asia, however, he contends there is plenty of room for co-operation. China’s recent involvement in the Iranian nuclear negotiation is an example of that.

Beijing’s foray into the region seems to be based on the assumption that economic development and growth can significantly reduce tension, Zhang Min, a vice foreign minister has said economic development was the ‘ultimate way’ to resolve the conflict in the region. This assumption is based on the ruling Communist Party’s strong belief that economic development is the key to dialling down social tension and strengthening a regime’s legitimacy. It’s interesting to note the parallels between this and the perception that high rates of unemployment among young men in the Middle East have contributed to instability.

However, as Beijing expands its economic and military presence in the region, it will inevitably be increasingly drawn into the region’s powder keg politics. So far, Beijing has managed to maintain a ménage-à-trois with Israel, Shiite Iran and Sunni Saudia Arabia, an impossible trifecta in the region. It will be interesting to see whether Beijing can maintain this delicate balance down the track.

The Chinese communist party has a fairly solid record in dealing with secular Arab nationalist leaders but it is still. as noted by seasoned observers, uncomfortable with the rising tide of Islamism in the region. In his book, The China-Pakistan Axis, Andrew Small quotes a Pakistani China specialist as saying:

“China has a good understanding of almost everything in Pakistan, political, security or economic, that might affect the bilateral relationship, but there is one piece they just don’t get: Islam.”

As Beijing expands both the scope and variety of operations in this region, it will face many tough challenges, ranging from sectarian rivalry to the scourge of terrorism. Maintaining its long standing policy of neutrality will require a herculean effort but it’s clear China leaders know what’s at stake. As Wang Jisi has warned:

“China will offend some countries if we take a concrete stance on any foreign policy issue. We need to maintain a delicate balance.”

Peter Cai is a fellow at the Lowy Institute and a journalist with Business Spectator.

This article was first published on Lowy Interpreter. Reproduced with permission.