China’s Diplomatic Coup in the Middle East: The Facts Behind the Hype

Symbols sometimes speak louder than facts, even when they shouldn’t. The public diplomacy focused on “development” that followed China’s so-called mediation between Saudi Arabia and Iran involved a dizzying series of visits and initiatives labeled in the usual propaganda style. They were loosely connected to China’s various grand schemes for the planet – up to and including what the state-run Global Times now calls “Xivilization.” This is aggrandized by all the talk about a vacuum in the Middle East, due to the United States’ lack of strategic interest and Europe’s limited influence.

To jump from this deployment of visits and rhetoric to the idea that China is becoming the great power of reference throughout the Middle East is tempting. It is particularly striking that Chinese experts have moved away from their previous position of non-involvement in the region’s many conflicts, contenting itself with outreach to all parties, to the advocacy of a larger role in the region’s geopolitics, and not only geoeconomics.

Before 2019, through years of Track 1.5 exchanges with the China Institutes of Contemporary International Relations (CICIR), China’s leading geopolitical think tank under the Ministry of State Security, one could hear soundbites such as “whoever takes the road to Damascus, we will deal with them” about Syria’s civil war, or messages to the West that could be summed up as “you broke it, you fix it.” Yemen was seen through the lens of a chaotic society with one of the largest ratios of firearms to population in the world. (China has one of the lowest.)

Israel, with which China was acquiring a trade relationship all the more impressive as it did not rest on energy but on tech, was dealt with through a silent partnership. When immigrant Chinese workers were hit by rockets fired from Gaza, China, usually so prompt to emphasize the security of its citizens abroad, stayed mum.

Even recently, China’s numerous energy and transport infrastructure deals with Iraq were conducted on a strictly commercial basis, with Chinese companies pulling out as soon as the work was completed. Yet one of the same voices from CICIR, namely Niu Xinchun, now claims China has “common values and common interests” with the Arab world and the arrival of a “never-seen-before new era” in China-Arab relations.

Historically, there were two major exceptions to Beijing’s hands-off attitude. First, China offered support for national liberation movements – starting with Algeria’s GPRA (Provisional Government of the Algerian Republic) from 1955, and continuing to this day with Palestine’s Fatah (recognized in 1988) and the Palestine Liberation Organization, throughout the history of the Afro-Asian conference and non-aligned movement.

The other exception, more importantly, was China’s arms sales. These were indiscriminate: They include intermediate-range ballistic missiles to Saudi Arabia in the early 1980s and large weapon sales to Iran from the era of the Iran-Iraq war, including Silkworm anti-ship missiles, an Iranian copy of which struck an Israeli frigate in 2006. Yet China learned to observe red lines – not transferring ballistic missiles to Syria, for example and capping its sales to Iran, including for drones. With more predictable partners, such as Saudi Arabia, China goes further – setting up drone production facilities and transferring missile technology.

Two elements have remained from this era. One is the blame game: The United States and the wider West, usually left undefined, are responsible for everything that goes awry in the Middle East. The other is China’s claim to be a neutral and therefore a fair partner. Today, this is the basis from which China proposes to solve entrenched crises through remarkably vague peace plans. For the Middle China, China’s offers the mantra of future development riding on “a wave of reconciliation” (和解潮).

China’s actual peace brokering record is much more modest, and its proposals are not always exempt from bias. Consider the Iran-Saudi Arabia mediation, which saw the two Middle Eastern rivals sign an agreement on resuming diplomatic relations in Beijing in March 2023. Talks between Iran and Saudi Arabia had long been going on in Baghdad, though interrupted by a change of government in Iraq. Beijing was a likely substitute for largely negative reasons: Iran could never accept the good offices of the American “Great Satan” or its weaker auxiliary, Europe. Saudi Arabia’s crown prince has distanced himself from the United States on human rights issues since the Khashoggi assassination. It had long engineered a rapprochement with Russia, a patron of Iran, based on common interest in the price of oil; that agreement is now falling through, while China is the first taker of Russian oil.

On the heels of the successful hosting of these talks, China’s special envoy for the Middle East – a position that has existed since 2002 but has never created results – was sent with much fanfare and a peace plan to the Palestinian territory and to Israel. This current proposal merely echoes others made in the past by China – with the claim of helping to promote “intra-Palestinian reconciliation,” which means Hamas and Hezbollah. Thus, China’s peace plan for Palestine closely resembles its 12-point proposal to solve the “Ukrainian crisis,” as biased in content as it is neutral in form. Meanwhile, China happily collects support from the Palestinian National Authority and from the Arab League on all of its core issues – including its oppression of Muslims in Xinjiang.

China’s real strength lies elsewhere: in its vastly increased commercial and tech attractiveness for all parties. Today, it is impossible to ignore China; it is an unavoidable partner with the capacity to reward or to punish. It is telling that Israel’s Prime Minister Benjamin Netanyahu is reportedly about to embark on a trip to Beijing, as Israel has to perpetually balance its security interests with the United States and China’s trade relationship and increasing nuisance potential.

China’s public focus on development as the key to crisis solving is not followed by substantive aid – even in Palestine, U.S. aid is 500 times larger. Instead, China has successfully parlayed its dependence on Middle East oil and trade deficit into an export drive that is now going upstream with investments financed by the region itself. This is not the Belt and Road model used in the recent past with Iraq, in which Chinese loans finance Chinese-constructed projects.

At the height of China’s FDI drive into Europe, Chinese firms used the euro market and its low interest rates. Today, China, itself the world’s largest holder of foreign currency reserves, is leveraging its huge energy purchases from Saudi Arabia for a host of mega projects, from infrastructure to digital, weapons to alternative energy – all industries that will tie the Kingdom to China in the post-oil age. This is already starting to balance the books in the economic relationship between the two countries. Similar deals are underway with Gulf States. China’s economic magazine of reference, Caixin, notes that Middle East investors are teaming up with Chinese firms for local projects as much as for the China market.

In geopolitical developments related to this economic pull, the region’s states, including NATO member Turkey, are flocking to the Shanghai Cooperation Organization (SCO), a China-led grouping that focuses on security cooperation, particularly on counterterrorism. Meanwhile, the United Arab Emirates withdrew in May 2023 from the U.S.-led Middle East Maritime Security Alliance. This followed closely a claim by Iran to be forming a “naval alliance” with Gulf Cooperation Council (GCC) states. In June, Iran’s navy commander said that the trilateral naval coalition of Iran, Russia, and China, which holds annual exercises, is developing.

Iran’s claims are likely excessive – the region could not possibly trust Tehran for security in the Gulf. But the lack of denials is a sign that the Gulf region is mixing continuing real dependence on U.S. forces with diplomatic moves designed to lower their risks.

In this context, China has considerable leverage. In a new development, it is vastly increasing its oil and LNG purchases from Russia at lower prices, thanks to the Western sanctions on Russian energy. Russia became China’s top oil supplier in early 2023. Thus, at the same time that it gains considerable influence over the Middle East, China could mitigate its own energy supply risks with Russia’s resources. Even if it is not in the U.S. situation of energy self-sufficiency, China has more options than Europe or Japan, for example.

The writing is on the wall. While we would do well to discard Beijing’s proliferating rhetoric – what it calls “discourse power” – regarding the Middle East, we should heed the warning that its practical influence is delivering through these public diplomacy coups.

This article was originally published as the introduction to China Trends 16, the quarterly publication of the Asia Program at Institut Montaigne. Institut Montaigne is a nonprofit, independent think tank based in Paris, France.