Monday, January 25, 2016

The Middle Kingdom's dilemma in the Middle East

Jonathan Eyal
Europe Correspondent

25 Jan 2016

If China wishes to take the Middle East seriously - as President Xi claims it does during his recent trip there - it will not only have to invest in new diplomatic capabilities, but it will also have to change mindsets and decide if it wants a role in maintaining the region's political order.

LONDON • Chinese President Xi Jinping has every reason to feel satisfied with his just-concluded tour of the Middle East. In less than a week, he not only managed to become the first world leader to visit Iran since economic sanctions were lifted on that country, but he also deftly navigated the treacherous diplomatic waters of the Middle East by visiting Saudi Arabia, Iran's biggest regional rival, and Egypt, the Arab world's most populous state, receiving an enthusiastic reception wherever he went.

Add to this the usual mega-billions trade deals which Mr Xi signs wherever he sets foot, and one may well be tempted to conclude that, unlike all other countries on this planet, China has discovered a blissful formula of engaging with the Middle East, one which avoids dealing with wars and bloodshed and concentrates instead on just economic prosperity.

But China, of course, has made no such miraculous discovery, for its advantageous position in the Middle East is predicated not on tackling but on avoiding that region's problems. And although this approach has provided Beijing with many advantages, it is not one which can be maintained for much longer.

During his speech at the Arab League headquarters in Cairo last week, President Xi hailed the "sincere" forging of relations between China and Arab nations over millennia, "across time and space"; such links, he claimed, "are unbreakable and cannot be bought with money". But the more mundane reality is that the history of China's involvement with the Middle East is neither ancient nor particularly deep, and was always about money.

Although Egypt established links with the People's Republic as far back as the 1950s, for much of the Cold War the Egyptians followed the Soviet Union's guidance by keeping China at arm's length. Saudi Arabia, meanwhile, established diplomatic relations only in 1990, and even then the move was considered controversial within the Saudi royal family, which looks upon all communist regimes with a deep aversion.

Nor should it be forgotten that during the 1979 Iranian Revolution China supported the Shah long after most Western governments abandoned the Iranian monarch. One can fill rooms with books about Western diplomatic "cock-ups" in the Middle East, but China's policy errors in the same region have received scant academic attention, although they have been just as numerous and just as profound.

Nor should one take the current Chinese claims that it is diverting its diplomatic attention to the region too seriously. Mr Xi took more than three years since he became president before he embarked on his first Middle East tour; any Western leader who would have waited so long before visiting the Arab world would have been dismissed as out of touch with realities.

Mr Xi's latest visit was also the first one by a Chinese head of state to the region in a decade; United States President Barack Obama, who has been in the White House for only seven years, has visited the Middle East more times than all modern Chinese leaders combined.

And when it comes to "vibrant cultural links" - as President Xi hails them - just take a look at the website of the Chinese embassy in the Egyptian capital of Cairo: its latest "news" items date from August last year.


Still, there is no question that the Sino-Middle East relationship is developing fast, largely because of broader shifts in world energy markets. With the US now transformed from a net consumer to a major oil and natural gas exporter, the Middle East's oil-producing nations are looking to China to buy their products. One of the key reasons Saudi Arabia is retaining its high oil extraction levels at the moment despite rapidly falling prices is that the Saudis are determined to keep their market share in China, where they are the leading energy supplier.

And, as one would expect, the Chinese are deft at playing on the fears of Middle East oil and gas producers in order to get the best deals possible. Chinese imports of crude oil from Saudi Arabia grew by only 2 per cent last year, while Chinese purchases from Russia soared by a third. Yet, while Beijing sourced more of its energy needs from Russia, it also made sure that it kept Iran happy. Even as sanctions were imposed on that country, the Islamic Republic was allowed to store some of its surplus liquefied natural gas in the Chinese port of Dalian after its own tankers ran out of capacity.

During his latest tour of the Middle East, Mr Xi had plenty more to offer. The Saudis are desperate to get into China's oil refining sector not because this is particularly lucrative, but because it may help cement Saudi control over China's energy market. The Iranians, meanwhile, are dangling deeper discounts, just in order to regain market share.

And, because they need China more than the Chinese need them, Middle East governments are quite adept in appearing not to notice what they do not wish to notice about China. Iran's Supreme Leader, Ayatollah Ali Khamenei, called for closer economic and security ties with Beijing, adding for good measure that Iran "had never trusted the West"; presumably, the Chinese, who supported the Shah and are currently buying military technology from Israel, are more reliable than those treacherous Westerners who, ahem, do exactly the same.

Meanwhile, nobody in the Middle East had the temerity to ask President Xi about the fate of the Muslims in China, and particularly those in Xinjiang; it is only Western leaders who stand accused of maltreating Muslims.

For the moment, the Chinese technique of mouthing cliches about "peaceful solutions", "harmonious outcomes", "win-win strategies" and "one belt, one road" initiatives while leaving others to do the diplomatic heavy-lifting appears to be working: the US military is, in effect, defending the sea routes of the Gulf so that oil tankers can reach China reliably and peacefully. As seen from Beijing, therefore, the Middle East is about oil, gas and troubles, in that order; the first two could be bought with cash, while troubles can just be ignored.


But how long can this continue?

There is a growing realisation among policy planners in Beijing that, as is already the case in Africa, China cannot just purchase raw materials from the Middle East without involving itself in maintaining regional stability.

And although in theory getting Washington to pay for the security of China's energy supplies should be the perfect deal for the Chinese, that is not how big nations think. If one looks back at rising powers in history, they all get very uncomfortable with leaving the security of their trade routes to other established powers. In that respect, therefore, the Chinese may be following in the historic footsteps of the British, who were also initially interested only in the oil of the Middle East, but then quickly found out that this required delving deeper into local politics and controlling sea routes.

The snag for the Chinese is that a "pivot West" to the Middle East would require both better power-projection capabilities and far better analytical resources. For the moment, Beijing has precious few people who truly understand the Middle East or have a long history of engagement in the region; even the Chinese military's Second General Staff Department which is responsible for intelligence collection and for dispatching military attaches is forced to rotate its small number of officers from one Middle East country to the next, simply because it has few who speak decent Arabic.

And the lack of knowledge is mutual: There are no think-tanks in the Middle East which look seriously at China, and the region's best diplomats do not go to China, but to Western capitals. And neither does Arab money: While Middle East rulers talk about closer relations with China, they buy real estate in Europe and will not dream of sending their children to Chinese schools.

So, if China wishes to take the Middle East seriously - as President Xi currently claims it does - it will not only have to invest in new diplomatic capabilities, but it will also have to change mindsets. Ultimately, however, China will have to make a decision on whether it wants to team up with the US in upholding the current status quo of the Middle East, or whether it wishes to challenge it.

No wonder that, at least for a bit longer, China would prefer to avoid making such momentous choices.

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