China in the Mashriq: New Best Friend

China’s influence in the Middle East is still mainly limited to issues of trade and economy, currently pursued within the overarching framework of the Belt & Road Initiative (BRI). However, China is also harboring some foreign policy ambitions. This has become especially noticeable with China’s active stance in establishing relations between Saudi Arabia and Iran. Beijing needs stability in the region, and strengthening political ties among the Arab nations serves its economic goals.

China is assuming the peacemaker role and advocating conflict resolution. By increasing its engagement with the countries of the region, it is addressing several problems at once. Not only is it extending the boundaries of the BRI framework by signing agreements with new states whose trust is now boosted by Beijing’s Middle East crisis management policies, but it is also meeting many of its energy needs as China emerges as the main importer of energy for some states in the region.

However, one cannot say China is the only beneficiary of the BRI advancement. China implements a number of humanitarian projects in the Mashriq, providing emergency aid relief. While maintaining neutrality, China lends a helping hand to Palestine, both through bilateral channels and at the UN. An important component of humanitarian aid is food aid, such as support of Syria facing the consequences of the earthquake.

The outcomes of this policy will take time to be visible, but it can already be argued that Beijing offers the Mashriq states, who have spent many years struggling with internal and external challenges, an alternative to the past approaches, presenting them with all the advantages of partnership as the best way for development. But it is up to the regional players to decide whether this alternative is indeed positive, weighing the benefits and downsides for their own countries and their future.

On November 30, 2023, the Chinese Foreign Ministry published five points of China’s position on resolving the Palestinian-Israeli conflict. Namely, China called for stopping hostilities, protecting civilians, providing them with humanitarian aid, expanding international diplomatic coordination, along with seeking a common political solution that would take into account the voices of the Arab, Islamic and the broader international communities. These five points were voiced by Chinese Foreign Minister Wang Yi the day before, at the UN Security Council meeting initiated by China on the Palestinian-Israeli issue, and this is by no means the first of the steps Beijing took to solve some of the problems crippling the Middle East.

China is building its Middle East policy on the basis of peaceful coexistence, typical of its approach. While Beijing refrains from directly declaring its intention to replace the United States, a more “traditional” partner for many countries in this region, the relations between the Mashriq nations and China have significantly strengthened over the past decade and have become even more intense in some aspects than the interaction with Washington.

China prioritizes the Persian Gulf in its Middle East policy, investing in infrastructure and joint projects, concluding new agreements and organizing high-level meetings with the Gulf states, while not forgetting the Arab Mashriq, countries that also have a role to play in implementing some of the Chinese initiatives and that have recently attracted more Chinese investment.

A new future of Iraqi oil

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Of greatest interest in this context are relations with Iraq as China’s third-largest trading partner among the Arab nations and one of the key oil exporters to China, second only to Russia and Saudi Arabia. Bilateral relations between the PRC and Iraq are expectedly based on economic ties. According to the PRC Foreign Ministry, China-Iraq bilateral trade totaled USD 53.37 billion in 2022, of which exports totaled USD 13.99 billion and imports amounted to USD 39.39 billion. In January-November 2023, China-Iraq bilateral trade totaled USD 45.14 billion, of which exports amounted to USD 12.91 billion and imports amounted to USD 32.23 billion.

Chinese companies are actively involved in the construction of Iraqi oil, electricity, education and socially important facilities. China Energy Construction Gezhouba Group is working on a wastewater treatment project in Iraq’s Wasit Governorate, with the first phase commissioned as early as June 2023 and the second phase under construction since November. PetroChina Engineering & Construction Co is constructing gas treatment facilities and training employees through The Training Plan for Skill Transfer. China State Construction Group Corporation is involved in the construction of an international airport in Iraq’s fourth largest city, Nasiriyah. These and many other projects are part of the Belt & Road Initiative (BRI) with both nations involved therein. It is the geographical location in terms of further development of the BRI as well as Iraq’s energy resources that are of primary interest to China that keeps vigorously developing its ties with Iraq. This also comes as a major factor in Beijing’s desire to expand its influence there.

China National Petroleum Corporation (CNPC), the largest Chinese oil and gas company, is particularly active in Iraq, accounting for more than half of oil production in Iraqi fields as an operator. If Iraq plans to diversify its partners in the energy sector, this could be a problem. Moreover, Iraqi workers protested in Maysan Governorate near the facilities of China Petroleum Engineering and Construction Corporation (CPECC). The protesters demanded better conditions as well as water conservation. The protest was suppressed by the authorities, but the incident itself was quite unexpected to both the Chinese and Iraqi sides.

It is noteworthy that in January 2024 PetroChina (part of CNPC) officially replaced the U.S. ExxonMobil to become operator of Iraq’s West Qurna-1 project. PetroChina now holds a 32.7% stake in the project, one of the largest oil fields in Iraq, with reserves estimated at more than 20 billion barrels.

The cultural aspect of Iraq-China relations has also gained momentum in recent years. According to China’s Foreign Ministry, Iraq has sent cultural and artistic groups to China several times to perform and participate in various festivals; Iraqi media people have also been visiting China. Chinese language courses are also offered in Iraqi universities.

China’s influence in Iraq is extending mainly through the country’s goals within the Belt & Road Initiative (BRI). The main instruments of Chinese foreign policy in Iraq are infrastructure and rehabilitation projects, new energy cooperation agreements, and investment flows. In this way, China is cementing ties with many of the states that lie along (and beyond) the BRI framework. China is using similar methods in Africa, for example, by investing in various projects and ramping up its investment.

China’s “helping hand” for Syria

Beijing also established a strategic partnership with Damascus in 2023. China has been an active supporter of Syria’s return to the Arab League, stating the need for unity among Arab states. Cooperation between the two sides provides China with a stable supply of energy resources and brings some benefits to Syria at the same time. China is proactively taking on projects to build and rebuild infrastructure destroyed during the civil war. Some aid is provided to Syria on a non-reimbursable basis. China has sent humanitarian aid to Syria to combat the pandemic and its aftermath, as well as to repair the damage caused by the 2023 earthquake.

The recent reconciliation between Saudi Arabia and Iran, with some diplomatic assistance from Beijing, has played an important role in increasing contacts between China and Syria. As the Chinese Foreign Ministry put it, Syria is “grateful” for China’s positive contribution to resolving hotspot issues as well as maintaining peace and stability in the Middle East.

Back in September 2023, Bashar al-Assad emphasized the importance of “China’s support” signing documents on the joint development of BRI. Words about the big role that China plays in Syria’s future and its reconstruction are increasingly often heard from the Syrian side, with Chinese media quoting Syrian politicians as early as 2017, saying that China is a “responsible power with a fair stance in international affairs.”

In 2022, a memorandum was signed between the head of Syria’s Planning and International Cooperation Commission and the Chinese Ambassador on Syria’s accession to the Silk Road Economic Belt (SREL) and the 21^st Century Maritime Silk Road. Notably, although Syria’s active inclusion into BRI should have a favorable impact on the country’s reconstruction, building the infrastructure necessary for the project requires subsequent maintenance, i.e. additional costs in the future. Syria’s economy is far from being stable, and whether Damascus can afford this is an open question.

Lebanon: another point on the BRI map

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Zhai Jun, the Chinese government’s special envoy on the Middle East, stated during his visit to Lebanon in March 2023 that the resumption of diplomatic relations between KSA and Iran provides favorable conditions for development and overcoming the crisis for Lebanon as well, while China’s influence extends to the entire region, strengthening peace, stability, and cohesion. Lebanon is another country to which China has provided humanitarian aid, including during the COVID-19 pandemic and after the 2020 Beirut port bombing, as well as food aid to countries along the BRI route.

For Lebanon, as for many other countries around the world, China is the largest trading partner. As reported by China’s Foreign Ministry, China-Lebanon bilateral trade amounted to USD 2.58 billion in 2022, and from January to July 2023, the countries exchanged goods worth USD 1.447 billion. Lebanese firms actively participate in Chinese trade fairs: the China International Import Expo (CIIE), China Import and Export Fair, and China-Arab States Expo. In January 2024, Xinhua reported that China promised to donate solar panels to Lebanon’s telecommunications centers, which should cover about 358 centers of the state-owned telecom operator Ogero. All this points to closer ties between the two nations in various fields, indicating that China is resuming cooperation with Lebanon years after a pause caused by internal instability in the country.

As early as 2009, the Chinese government invested USD 58 million to enlarge the port of Tripoli. China is still heavily investing in the expansion of Lebanese port infrastructure. The main reason for these investments, as with other countries in the Levant, is the development needed to expand the ‘boundaries’ for BRI, of which Lebanon, having signed an agreement with China, is already an integral part.

In addition to economic interaction, other ties are also enhanced. In 2020, China and Lebanon signed an inter-governmental agreement to establish cultural centers in the capitals, and both countries are hosting joint cultural events, festivals, and bilateral days of culture.

Lebanon cannot be described as China’s main focus, but Lebanon is still of great interest to Beijing due to its geographical location even if there are more strategically “useful” partners in the Greater Middle East and in the Mashriq (for example, Syria and Iraq attract much more Chinese investment). The ports of Tripoli and Beirut may be more actively used by China in the future as trade hubs in the Mediterranean, and thus might be extremely helpful for the BRI further development.

The two sides of the Chinese yuan

China usually finances infrastructure through loans, offering the option of construction carried out by Chinese companies. On the one hand, this is a favorable situation for the states receiving China’s investments as Chinese companies often train local employees, improving their skills and providing them with jobs; and construction of infrastructure has had a positive impact on rebuilding the countries ruined during the various crises of the recent decades and improved the quality of life for the local population. With that, China establishes long-term relations, contributing to the diversification of their national economies and increasing the level of their technological development.

Indeed, China does not openly demonstrate military ambitions, does not engage in conflicts, but advocates territorial integrity, sovereignty, and diplomacy and dialogue to resolve problems and disagreements. For some Mashriq countries, this approach is particularly important because it is the opposite of the United States. The history of the 21^st century knows many examples of China’s definite support in sensitive issues of the Syrian, Iraqi and Lebanese reality. For example, China, together with Russia, has repeatedly vetoed unacceptable projects directed against Syria or its government when voting in the UN Security Council, and China openly spoke out against any external intervention in Iraq in 2019.

On the other hand, Chinese involvement has raised concerns among official authorities in different nations. Protests against further involvement in the BRI framework have erupted in various countries around the world, such as in Kyrgyzstan in 2020 and in Pakistan in 2021. The main concern of the local population was the disruption of their usual way of working and living. Such protests underscore the pitfalls of China’s development initiative – the very ones that Mashriq officials currently prefer to ignore, focusing only on the benefits.

Researchers and policymakers (mostly in the West) often accuse China of “building debt traps.” In 2017, Indian researcher Brahma Chellani coined the notion of “debt-trap diplomacy” in relation to China, which is still used when talking about Chinese loans.

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The list of borrowing states mostly includes developing countries, some of which – for example, Sri Lanka – have already declared serious damage to their own economies on account of huge debts to China. The same concerns are raised about yuan deals, and there are fears that China needs them not only to boost its influence, but also solidify financial dependence of other nations on China’s economy and its public institutions.

China actively refutes such statements, emphasizing that debt forgiveness or easing of credit terms, in fact, go quite smoothly and on the basis of preserving bilateral relations. For example, with the assistance of the UN, China cancelled a part of the Iraqi debt (the penalty interest is still unknown at the moment).

Against this background, China’s relations with Israel seem to be totally different, which is interesting. China and Israel have a large number of agreements in various areas and fields. Trade relations between the countries are at a good level as China is Israel’s second largest trading partner, and Israel, according to the Chinese Ministry of Commerce, is one of the key partners for China in the Middle East. However, the situation became much more complicated after October 2023, when in a telephone conversation with the KSA foreign minister, Chinese Foreign Minister Wang Yi stated that Israel’s actions exceeded self-defense and the “historic injustice” towards Palestine must stop. Beijing has repeatedly called for an immediate ceasefire and reminded of international humanitarian law. In the words of Chinese President Xi Jinping, the only way to resolve the Israeli-Palestinian conflict is to realize the two-state solution of Palestinian and Israeli coexistence.

The political and economic reasons for China’s position are manifold, but such a decision is a serious reason to complicate relations between China and Israel. Yet, it is not the first time that turbulence in the Sino-Israeli relations has gone up. Previously, China reduced its investment in Israel due to increased U.S.-Israeli coordination over Chinese investments. For example, Israel and the U.S. had a big disagreement over the reconstruction of the Haifa port, China’s participation in the construction causing U.S. warnings. In the opinion of U.S. officials, increased Chinese investment in Israel is a serious threat to the latter’s national security.

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China’s influence in the Middle East is still mainly limited to issues of trade and economy, currently pursued within the overarching framework of the Belt & Road Initiative (BRI). However, China is also harboring some foreign policy ambitions. This has become especially noticeable with China’s active stance in establishing relations between Saudi Arabia and Iran. Beijing needs stability in the region, and strengthening political ties among the Arab nations serves its economic goals.

China is assuming the peacemaker role and advocating conflict resolution. By increasing its engagement with the countries of the region, it is addressing several problems at once. Not only is it extending the boundaries of the BRI framework by signing agreements with new states whose trust is now boosted by Beijing’s Middle East crisis management policies, but it is also meeting many of its energy needs as China emerges as the main importer of energy for some states in the region.

However, one cannot say China is the only beneficiary of the BRI advancement. China implements a number of humanitarian projects in the Mashriq, providing emergency aid relief. While maintaining neutrality, China lends a helping hand to Palestine, both through bilateral channels and at the UN. An important component of humanitarian aid is food aid, such as support of Syria facing the consequences of the earthquake.

The outcomes of this policy will take time to be visible, but it can already be argued that Beijing offers the Mashriq states, who have spent many years struggling with internal and external challenges, an alternative to the past approaches, presenting them with all the advantages of partnership as the best way for development. But it is up to the regional players to decide whether this alternative is indeed positive, weighing the benefits and downsides for their own countries and their future.