Iran’s Khuzestan province has experienced an unprecedented water shortage; yet climate change alone cannot explain how an area endowed with such exceptional natural resources could fail its people so catastrophically.
For a number of reasons, China’s political engagement in the Gulf region appears predominantly positive for the Gulf Arab states. The Belt and Road Initiative is expected to be worth $1.2 trillion to $1.3 trillion by 2027 and could help transform the region by feeding into economic development, inward investment, and diversification plans, including renewable energy. Given the time pressure on many Gulf Arab states to achieve economic reform, or “vision,” targets by 2030, it is important that China’s economic recovery since the onset of the coronavirus pandemic has been swift. Beijing lacks recent political and military baggage, whereas the United States has been involved in a number of conflicts in the region in the past two decades.
Still, there are concerns across a number of fields about Chinese engagement, including that it could exacerbate existing security challenges. In its initiatives and economic activities across the world, China has been accused of deploying sharp power and causing negative environmental impacts, high emissions development, and sidelining communities, amounting to “coercive environmentalism.” However, Chinese enterprises in the Gulf region are different than they are in other areas of the world, prioritizing building infrastructure, developing civil nuclear energy programs, producing technology systems, such as artificial intelligence, and expanding bilateral military ties, including exporting armed drones.
The Sky is the Limit to China-Gulf Relations
China’s close energy connections with the Gulf states and low level of outward foreign direct investment as recently as 2013, when Xi Jinping became president and the forerunners of the Belt and Road Initiative, the “Silk Road Economic Belt” and “Maritime Silk Road,” were launched, has provided the foundations for enhanced relations. This has ultimately led to comprehensive strategic partnerships with Algeria, Egypt, Iran, Saudi Arabia, and the United Arab Emirates. In addition, China signed strategic partnerships with Qatar, Jordan, Iraq, Morocco, Sudan, Djibouti, Oman, and Kuwait, with economic provisions in the agreements contributing to Gulf state employment and other development goals and foreign policies. At the Sixth Ministerial Conference of the China-Arab States Cooperation Forum in 2014, President Xi Jinping proposed cooperation to revolve around a 1 (energy) + 2 (construction and infrastructure, trade and investment) + 3 (nuclear energy, aerospace, and new energy) framework. At the same meeting, he encouraged economic cooperation initiatives to increase from $240 billion in 2013 to reach $600 billion in 2023.
On the back of closer association with the Gulf Cooperation Council states through mechanisms such as the China-GCC Strategic Dialogues launched in 2010, commercial activity between China and the GCC states rose from less than $10 billion in 2000 to almost $115 billion in 2016. China’s investments in the Middle East and North Africa between 2005 and 2020 reached $196.93 billion, with Saudi Arabia ($39.9 billion) and the UAE ($34.7 billion) particularly important destinations. In the last few years, China’s largest trading partner in the region has been the UAE, with $53 billion of bilateral trade in 2018, expected to increase to beyond $70 billion in 2020, according to Jamal Saif Al Jarwan, secretary-general of the UAE International Investors Council. The UAE is attractive because it also acts as an entrepôt for Chinese access to regional markets. In 2021, the UAE plans to host the first Asian Infrastructure Investment Bank meeting in the Middle East, confirming its preferred status. Chinese investments in the Gulf have included $11 billion in the Duqm Special Economic Zone Authority in Oman in 2017; a $4 billion investment in a petrochemical plant in Jazan City for Primary and Downstream Industries in Saudi Arabia, in 2017; and a $1 billion investment in Khalifa Industrial Zone in Abu Dhabi in 2018, with the possibility of another $10 billion from the East Hope Group.
China’s commitment to be carbon neutral by 2060 and hit its peak carbon dioxide emissions before 2030 add great impetus behind diversifying China-Gulf relations beyond oil- and gas-based relations as soon as possible. While there are significant opportunities in infrastructure, e-commerce, and tourism, which could boost the economic diversification strategies of the Gulf states and people-to-people connections, there is a disparity in Chinese investment and construction across the Gulf, and more still across the Middle East and North Africa. Iran for example, attracted attention in July 2020 for negotiating political, military, cultural, and economic cooperation (a so-called pact) with China ostensibly worth $400 billion. But in March 2020, it had received only $115 million in declared oil payments, and bilateral trade in 2019 was at the lowest level in a decade, making it less significant than originally billed and more in line with China’s other Gulf partners. Oman is an interesting case because it has so far received more investment from neighboring Gulf Arab states than from other foreign states, highlighting the dominant regional and international role Gulf state actors can play.
Should the Belt and Road Initiative continue to expand and be responsible for the diversification of relations between China and the Gulf states, it could be regarded as a strategic advantage to states engaged in authoritarian upgrading, defined as reorganizing strategies of governance in new global, regional, and domestic circumstances that undermine democracy promotion programs. It will manage to blend many of its constituent features: diversifying international linkages, controlling new communications technologies, and capturing the benefits of selective economic reforms. China’s “Serbia Model” may also have a disproportionate impact on national and human security, through the sale of AI technology to the Gulf states that estimates suggest could be worth up to $320 billion by 2030, primarily to Saudi Arabia, Qatar, Bahrain, and the UAE. AI lies at the heart of so-called “Smart (and Safe) Cities,” which use it for extensive tracking and surveillance to address counterterrorism and urban safety requirements. Chinese Wing Loong I and II weaponized drones have already entered the battlefields in Yemen, Iraq, and Libya. There has also been production of CH-4 drones in Saudi Arabia, announced in 2017, plus an offer to sell Saudi Arabia the Blowfish A3, which is an AI machine gun-equipped unmanned aerial vehicle.
The International Environment
The primary concern about China’s impact on security in the Gulf isn’t confined to the Gulf or Middle East but extends to U.S.-China great power relations. This is best summarized by the Thucydides Trap. Graham T. Allison describes an apparent tendency toward war when an emerging power threatens to displace an existing great power as the international hegemon. But there is little reason why U.S.-China tensions should spill over into the Gulf. China gets 40% of its oil from the Gulf states and increasingly relies on natural gas imports from Qatar. The United States has around 60,000 to 80,000 troops stationed in the Gulf region and is active in attempts to block Iranian influence. What this does draw attention to are the different paths to global influence that China might embark upon.
In 2020, Jake Sullivan, now national security advisor to President Joseph R. Biden Jr., and Hal Brands considered two paths China might choose from in moving toward “global domination.” One possibility focuses on regional domination and the other on building a security and economic order across Eurasia and the Indian Ocean. In the latter case, the emphasis would be on converting economic might into political influence, building innovation and the capacity to shape key international institutions. In economic terms, the 5G cellular network rollout, part of the Digital Silk Road launched in 2015 has elicited U.S. security concerns and prompted the EU-Japan Economic Partnership in 2018. China’s global leadership will become more apparent in the deployment of nuclear technology by 2030 and will be highly consequential to nuclear safety and nonproliferation standards in the Gulf and beyond as some states launch their own civil nuclear power programs. Rosemary Foot notes, in response to the NATO intervention in Libya, that Beijing stopped the United Nations-sanctioned intervention in Syria with repeated vetoes seven times between 2011 and September 2019, an extremely unusual move given that China only used its veto on six occasions between 1971, when it became a U.N. Security Council member, and 2009. Washington and China could yet de-escalate tensions to achieve a more stable international balance of power and cooperative framework, which could break the deadlock in the Security Council on a range of issues that affect Gulf state interests, including regional conflicts and nonproliferation.
For the foreseeable future, a proposed new group of 10 leading democracies or D-10, including South Korea, India, and Australia as well as the G-7 states of the United States, Italy, France, Japan, Germany, Canada, and the United Kingdom, have a good chance to shape the security situation in the Gulf and internationally. The Biden administration heralds new policies aimed at the region, including contributing to a rapprochement between Qatar and its neighbors, advocating for diplomacy with Iran while maintaining a firm stance against its regional activities, and pushing for human rights-related reforms. However, the 2021 suspension of U.S. arms sales to Saudi Arabia and the UAE could drive the two Gulf countries toward China and Russia, thereby losing leverage and increasing China’s hitherto relatively low level of arms sales to the region. From 2000-19 China remained behind the United States and some European countries in these major arms markets. While Chinese arms sales and political influence might increase as a result of U.S. restraint, in other regions, such as sub-Sahara Africa, the pattern of international relations has often been one of oscillation between Beijing and Washington to maximize state autonomy and regime survival, and many Gulf leaders still prize and rely on the U.S. security umbrella.
The Belt and Road Initiative in Transition
The Belt and Road Initiative is expected to be completed in 2049, a century after the founding of the People’s Republic of China. The Belt and Road Initiative and Marshall Plan, a smaller but comparable economic (aid) effort that spurred postwar economic recovery in Western Europe in 1948, appear to deviate on three main points: The Belt and Road Initiative continues to favor some countries over others; the amount of aid to loan or investment ratio is different; and economic and political diversity has increasing security-related application in the Gulf. These may be resolved in time. Overall, the success of the Belt and Road Initiative will be evaluated by the degree to which it is able to help Gulf governments meet diversification, economic development, and environmental sustainability goals.
is a non-resident fellow at the Arab Gulf States Institute in Washington and a fellow with the Sectarianism, Proxies and De-sectarianisation Project at Lancaster University.
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