China’s Strategy in the Middle East: High Profile Economics, Low Profile Politics

Dr. Manochehr Dorraj's picture

China has created two of the largest sovereign wealth funds (SWFs) in the world and has declared the Arab World is going to be one of its SWFs’ major investment destinations. The United Arab Emirates (UAE), which already hosts more than 4200 Chinese companies, is poised to receive an additional 1,400 Chinese firms and has witnessed a 35 percent annual trade growth with China over the past decade. Indeed, China is now the number one trade partner for several Middle Eastern countries including Bahrain, Iran, Egypt, and Saudi Arabia and is overtaking France as the major exporter to Algeria. Trade ties between China and the region have increased an astounding 600 percent over the last decade alone with the value of trade hitting USD $230 billion in 2014. Beyond this, the projected value of China’s bilateral trade with the 22 countries of the Arab World alone is projected to reach $600 billion by 2024. Furthermore, in April 2015 Qatar established a clearing bank to facilitate doing transactions in Yuan. Politically, Chinese policies of “respect for sovereignty and offend no one” in much of the region that has bitter memories of colonialism is well-received. China refuses to take side between such antagonists as Iran and Saudi Arabia and the Palestinians and the Israelis. Hence China’s mediation of regional conflict renders it as impartial broker in a polarized region. Beijing’s constructive role in bringing Iran’s nuclear deal to fruition and its attempt to invite the leaders of Syria and the opposition for negotiation to China all serve as recent examples of its constructive diplomacy. These are all indications that the current economic and political realignment of great powers underway in the Middle East, which involves a more prominent Chinese role, is bound to continue with unmistakable social and political consequences in future.