China stakes its Middle East claim
By Chietigj Bajpaee
Two regions have emerged as the most likely sources of great-power conflict in
the 21st century. The first is the Middle East, which is the focal point for
the US-led "war on terror". The region is important both as part of a global
ideological struggle against Islamist extremism and in the quest for oil and
gas resources. The second is Asia, as the rise of China presents competition
for both intangible and material resources on the world stage.
On the ideological front, China's model of protecting one-party rule by
improving the economic livelihood of the people and
emphasizing the principles of sovereignty, non-interference and territorial
integrity while calling for a multipolar international system challenges the
US-led international order, which favors democracy, human rights and
humanitarian intervention.
China's rapid growth, development and modernization is also proceeding in
tandem with China's growing resource needs, which are placing pressure on raw
material prices and fueling a global competition for certain resources, notably
energy resources given China's position as the second-largest oil consumer
after the United States.
However, events in these two regions are not mutually exclusive. China's
growing economic influence has proceeded in tandem with a growing military
capability and more proactive political and diplomatic policy on the world
stage, including in the Middle East. Its policy toward the Middle East has
emerged as a microcosm of its foreign policy throughout the world, being driven
by a desire to maintain a stable international environment in order to focus on
its internal development, forming a close bond with the developing world,
gaining access to raw materials and markets, and elevating its status on the
world stage.
China's relations with the Middle East
China's relations with the Middle East are rooted in China's support for
anti-colonial struggles during the Cold War. Beijing's wave of diplomatic
recognition with the Arab world began in 1956, with China's establishment of
diplomatic relations with Egypt, and completed in 1990 when Saudi Arabia
established diplomatic relations with China.
With the end of the Cold War and China's emergence as a net oil importer in
1993, China's primary interest in the Middle East has been to gain access to
the region's vast oil and gas supplies. While China is trying to diversify its
energy import supplies, it still depends on the Middle East for half of its oil
imports, with Saudi Arabia and Iran providing about 30% of China's oil imports.
Meanwhile, numerous states in the region have agreed to invest in China's
downstream infrastructure, as demonstrated in December when Kuwait signed an
agreement to invest in refinery and petrochemical infrastructure in Guangdong
province.
Also in December, China and the Organization of Petroleum Exporting Countries
(OPEC) launched an energy dialogue. In fact, many recent diplomatic initiatives
by China toward the Middle East can be seen through the prism of China's
growing energy needs.
For example, the visit by King Abdullah bin Abdul Aziz to China in January was
the first by a Saudi monarch to China. This visit demonstrated the deepening
relationship between the world's fastest growing source of oil demand (China)
and the world's biggest oil supplier (Saudi Arabia). Since 2002, Saudi oil
shipments to the US have been declining while shipments have been increasing to
China. Indeed, last year Saudi Arabia was China's leading source of oil
imports.
China has secured numerous energy exploration agreements with the Saudi
government. For example, Sinopec has won the right to explore for natural gas
in Saudi Arabia's al-Khali Basin, while Saudi Arabia has agreed to assist China
in the development of its strategic petroleum reserves and upgrade China's
downstream refinery capacity as demonstrated by the construction of a refinery
for natural gas in Fujian province.
Sino-Saudi relations extend beyond the energy sphere. Both countries maintain
close relations with Pakistan and China has sold Saudi Arabia CSS-2 "East Wind"
intermediate-range ballistic missiles. Saudi Arabia has also emerged as China's
leading trade partner in the region with Sino-Saudi trade amounting to US$14
billion in 2005.
A similar deepening of relations can be seen in the case of Sino-Iranian
relations. While China abstained in the vote to refer Iran's nuclear ambitions
to the United Nations Security Council at the meeting of the International
Atomic Energy Agency (IAEA) in January, it still maintains strong relations
with Iran.
When the Iran issue is discussed at the Security Council, China could employ a
similar tactic to that which it employed over the issue of Sudan, which is also
a significant oil supplier to China; in 2004, the Security Council was forced
to water down a resolution condemning atrocities in the Darfur region to avoid
a Chinese veto.
China's relations with Iran, while rooted in centuries of history from the
"Silk Road" and the voyages of Zheng He, have recently blossomed as a result of
China's growing energy needs. China has signed a $100 billion deal with Iran to
import 10 million tons of liquefied natural gas over a 25-year period in
exchange for a Chinese stake of 50% in the development of the Yahavaran
oilfield in Iran. China has also expressed a desire in direct pipeline access
to Iran via Kazakhstan.
Relations in the economic sphere have also continued to blossom as bilateral
trade reached $9.5 billion in 2005, fueled by growing Chinese investment in
Iran's infrastructure. Iran has also been drawn into China's sphere of
influence by its observer status at the Shanghai Cooperation Organization.
Given the ongoing frictions between Iran and the West, Sino-Iranian relations
are also a source of potential friction for Sino-US relations. For example,
while China has voiced its commitment to the non-proliferation regime, Chinese
companies have been the subject of numerous sanctions for the transfer of
ballistic missile technologies to Iran. Since the mid-1980s, China has sold
Iran anti-ship cruise missiles such as the Silkworm (HY-2), the C-801 and the
C-802.
While gaining access to the region's vast energy resources is China's primary
motivation for deepening relations with the region, there are a number of other
factors driving China's Middle East policy. As the ideological center of the
Islamic world, China has attempted to maintain good relations with the Arab
world in order to get its support on the Uighur insurgency in Xinjiang
autonomous region and maintain amicable relations with the 55 million Muslims
residing in China.
While China's main efforts in preventing external actors from fueling the
Uighur insurgency have focused on Central and South Asian states, countries in
the Middle East, most notably Saudi Arabia and Iran, have also had an important
role to play in quelling the insurgency given their moral and material support.
Most notably, Wahabbi Islam, which is an export from Saudi Arabia, has played a
significant role in the rise of extremist, fundamentalist Islam in Pakistan,
Afghanistan and the Central Asian republics on China's western borders.
In order to garner the goodwill of the region, Beijing has made numerous
symbolic gestures. For example, in September 2002 Beijing appointed its first
Middle East peace envoy. While this has had little significance for the
Israeli-Palestinian peace process, it has nevertheless demonstrated China's
increasing attention to the region.
Similarly, while China has maintained a low profile in the US intervention in
Iraq, in May 2004 China submitted a document to the UN Security Council
proposing that US-led forces withdraw from Iraq. China has also consistently
called for a larger UN role in Iraq. China is deepening its economic
cooperation with the region through the China-Arab Cooperation Forum and the
Framework Agreement between China and the Gulf Cooperation Council, which
includes negotiations for a free trade zone.
While China has maintained a historically close relationship with the Arab
world, including sympathizing with the Palestinian cause, it has nevertheless
also pursued an increasingly close relationship with Israel in recent years.
Israel is one of only a handful of countries that has never granted diplomatic
recognition to Taiwan.
In recent years, Sino-Israeli relations have been fueled by China's growing
dependence on Israel for arms imports and upgrades, particularly hard-to-find
US-made weapons platforms. Israel is now China's second-largest supplier of
weaponry after Russia. Most notably, Israel has sold China "Harpy" anti-radar
drones and Python-3 air-to-air missiles.
Nevertheless, there are limits to Sino-Israeli relations given the close
relationship between Israel and the US, as evinced by Israel's decision (under
US pressure) to cancel the sale of the Phalcon airborne early warning radar
system to China in July 2000 and its decision not to upgrade Harpy drones for
China in 2004.
Potential for China-US rivalry
While China and the US are not engaged in overt competition in the Middle East,
it is not difficult to envision that the region could emerge as the stage for
future Sino-US rivalry. Not only are the US and China dependent on energy
resources from the Middle East, but both states offer competing models for
international conduct, with the Chinese model becoming increasingly popular in
the region.
While the US has become more willing to engage in humanitarian intervention,
preemptive action and regime change, with the Middle East emerging as the most
likely candidate for the US to practice these policies, China retains a
preference for a traditional Westphalian-style of conducting international
relations with emphasis on non-intervention, state sovereignty and territorial
integrity.
Since September 11, 2001, and the launch of the US-led "war on terror" and the
Greater Middle East initiative to spread democratic principles across the
Middle East, regimes in the region, including those that have traditionally
maintained close relations with Washington such as Saudi Arabia, have deepened
relations with Beijing in order to hedge their bets against a downturn in
relations with the US.
China's relations with pariah, terrorism-sponsoring governments in the region
including Iran, Libya and Syria, as well as the proliferation of ballistic
missile technologies and other weapons platforms to these countries, has
already created a source of tension between the US and China.
The implications of Sino-US energy competition in the Middle East extend beyond
the region. At present, China has to depend on the US to patrol sea lanes
through which its oil imports from the Middle East transit. Beijing is
attempting to reduce this dependence by diversifying to access oil and gas
imports from other regions and developing port facilities through which China
can import oil by pipeline.
This "string of pearls" strategy, as it has been characterized, has been made
apparent by China's development of port facilities at Gwadar in Pakistan, which
is on the doorsteps of the Persian Gulf and the Strait of Hormuz. China has
also expressed a desire to augment its blue water naval capability over the
long term, which could be used to compete with the US in policing waterways in
the South China Sea and Indian Ocean.
Conclusion
Sino-US competition in the Middle East is by no means inevitable. The Middle
East may emerge as a stage for cooperation between the world's major energy
consumers, including the US, China, Japan and India. This has already been seen
with the joint bid by China National Petroleum Corp and India's Oil and Natural
Gas Corp for energy assets in Syria, and China and India having a 50% and 20%
stake respectively in the development of Yahavaran field in Iran.
The growing dependence on Middle East energy by China, India and Japan may also
encourage these states to play a more proactive role in resolving long-standing
disputes in the region, bringing peace and stability. China's low-key presence
in the ongoing debate over the US intervention in Iraq and abstention over the
vote to refer Iran to the UN Security Council also suggests that China does not
seek to engage in open confrontation with the US over issues in the Middle
East. There are also technical barriers to China's access to Middle East oil
given that China lacks the refineries to process the heavy sour crude from the
region.
Nevertheless, Chinese and US interests in the Middle East are not identical. In
many ways, there has been a role reversal for the US and China on the world
stage - while China had originally fueled revolutionary change through
sponsoring anti-colonial struggles and communist insurgencies, it is now the US
that is attempting to fuel change in the international system by rejecting
international conventions (eg Kyoto Protocol, Anti-Ballistic Missile Treaty)
and norms (preemptive action, granting recognition to India as a nuclear
power).
On the other hand, while the US has traditionally favored stability even at the
cost of supporting unsavory regimes, it is now China that increasingly favors
stability in the international system, even if it means supporting pariah
regimes such as Myanmar, Iran, Nepal, North Korea, Uzbekistan and Zimbabwe. In
the Middle East, the volatile mix of long-standing disputes, great power
competition and Islamist extremism create the recipe for further instability in
the region.
Chietigj Bajpaee is Hong Kong-based energy analyst.
Published with permission of the
Power and Interest News Report,
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