Economic cooperation of China with the countries of the region is progressing very successfully.
China is turning into an increasingly active player in the Middle East, entering the competition for influence in the region with both the United States and Russia. While Beijing views the Middle East region from the perspective of economic interests, Moscow and Washington view it from the perspective of geopolitical interests.
Economic cooperation of China with the countries of the region is progressing very successfully. One of the reasons lies in the fact that China has no complicated geopolitical disagreements and territorial conflicts with the Middle East countries, such as, for example, with the member countries of the Association of Southeast Asian Nations. However, if Beijing continues its current foreign policy course in the Middle East, it is quite possible that the China will manage to make a breakthrough in Middle Eastern diplomacy. What is attractive about the Middle East for China? What is the core of Beijing’s “soft power” and how does it work in the region?
China, which has transformed from a regional power into a global one, is currently globally ranked second in terms of economic volume. In 1970, the country was only in eighth place for this indicator. The status of the second global economy today gives China opportunity to make multi-billion-dollar investments not only in the Central Asia region, but also in Europe, Africa and Latin America within the Belt and Road Initiative.
This global concept, including the Silk Road Economic Belt and the 21st century Maritime Silk Road projects, envisages the creation of an extensive infrastructure network from the western borders of China to the eastern and southern borders of the European Union. The Middle East is also of key importance for the implementation of the Belt and Road Initiative. On the one hand, China is promoting its concept of Belt and Road Initiative, on the other hand, it is successfully developing its energy strategy in the Middle East direction.
First and utmost, the Middle East is attractive to China from an economic point of view. To cope with growing demands, Beijing seeks to expand practical cooperation with the oil- and gas-producing states in the Middle East, including Iran, Sudan, Qatar, Iraq and Saudi Arabia, etc. According to the General Administration of Customs of the People’s Republic of China, in 2017 natural gas imports to China increased by 26.9%, while oil imports increased by 10.2%. Qatar today is among the largest exporters of gas to China. Russia and China are cooperating extensively in the field of oil supply. In 2016-2017, Russia became the largest supplier of oil to China, keeping the first place for the second year in a row. The second place was taken by Saudi Arabia; its supply increased by 2.3%. China also purchases oil from Iraq and Iran.
A few words about Oman. In the middle of May 2018, China and Oman signed a memorandum of understanding to promote the Belt and Road Initiative. One of the most ambitious projects of China in Oman is the construction of a new industrial city in Duqm village, focused on the transit of goods from China within the Belt and Road Initiative. The investment volume in the project is estimated at almost $11 billion.
Beijing has friendly relations with Tehran, and these relations are further developing. This confirms the growing turnover between the countries. In 2017, trade turnover increased by 22%, surpassing the $30 billion mark. In a short while, the Iranian economy will face a new wave of USA sanctions. By November 5, the USA government should impose sanctions on Iran’s oil exports again. However, China is not going to give up Iranian oil in favor of USA interests, since Beijing can get Iranian oil through barter or trade in yuan. This will avoid the need to make payments in US dollars. China already has this experience. Zhuhai Zhenrong and Bank of Kunlun are the structures established to circumvent US sanctions. Thanks to them, Beijing was able to continue to import oil from Iran, despite the US sanctions in place until 2016.
China is interested in active cooperation with not only Saudi Arabia, Iran and Qatar, but also with other countries of the Middle East. People’s Republic of China President Xi Jinping, during the opening of the 8th China-Arab States Cooperation Forum in Beijing held in July 2018, said that China will allocate $90 million for the economic support to Jordan, Yemen, Lebanon and Syria. Palestine will get support in the amount of $5 million. In January 2016, Xi Jinping announced the allocation of support for Palestine in the amount of about $8 million.
Thus, China is successfully managing to maintain a balance in the complicated political reality of the Middle East, maintaining a rapport with all the countries of the region – even with those hating each other.
Interacting with all countries of the world, China adheres to five principles: mutual respect for sovereignty and territorial integrity; mutual nonaggression; non-interference in each other’s internal affairs; equality and mutual benefit; and peaceful coexistence.
The author is the director of the international expert club EurAsiaAz and editor-in-chief of the Azerbaijani news agency Vzglyad.az.
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