Growing trading ties of China and the Middle East

Growing trading ties of China and the Middle East

Over the years, the influence of China has grown considerably over the
Middle East countries. China’s increasing presence in the Middle East can be
attributed to the shift in the policy of the US government to disengage from the Middle East region. The policy shift started under President Barack Obama and accelerated under Donald Trump. It created a vacuum which, for the benefit of the region, needed to be filed by some countries. China stepped in to fill the place of the US in the Middle East region, resulting in, the growing influence of China over the region, especially when it is getting increasingly alienated by the Western countries to prevent its domination over the world trade. In 2013, to increase the economic and trading activities, China announced Belt and Road Initiative which is an economic development project aimed at linking Asia to Europe via Africa and the Middle East, leading to increased investment and global economic integration on the terms majorly set by China.

Over the past few years, China has emerged as the main buyer of Middle Eastern Oil. According to data from Refinitiv, a global provider of financial
market data, China’s purchase of Iranian oil has climbed a record high in 2021.

Being the key purchaser of Middle Eastern oil, China has become an
important business partner for the Middle East region as oil consumption is
declining and may further decline in the rest of the world.

Between the years 2010 to 2018, China has entered into a comprehensive, strategic and innovative partnership with various regions of the Middle East. China has gradually increased its engagement and has become the largest investor in the Middle East region and the most important trading partner with the Arab League. Important technological projects like Smart Dubai 2012 and Saudi Arabia’s National Transformation Program 2030 also have the involvement of tech companies from China. Huawei, a Chinese tech giant, has entered into a partnership with telecommunication companies of the region to build 5G networks in Saudi Arabia, UAE, Kuwait, Egypt and Bahrain.

Jonathan Fulton, assistant professor of political science at Zayed
University in Abu Dhabi, has written: “China has established comprehensive strategic partnerships with Algeria, Egypt, Iran, Saudi Arabia, and the UAE, as well as strategic partnerships with Djibouti, Iraq, Jordan, Kuwait, Morocco, Oman, Qatar, and Turkey. Coinciding with the expansion of the BRI, this flurry of diplomatic activity indicates that Chinese leaders increasingly perceive the Middle East as important to their political and strategic goals.”

Among other things, the trade of arms between China and the Middle
East region has also steadily grown in recent years. For the longest time, US
and Europe were the primary arms exporters in Middle Eastern defense
markets, but it is changing with the entry of China. China also focussed on
grabbing all the major BRI-connected economic investment deals related to
infrastructure and connectivity projects.

China’s growing influence and US approach to disengage can be a threat
to the Middle Eastern region and the region can fall into China’s debt trap.
Increased investments by China will mean more and more dependency of the region on China for economic development and that can be used by China in its favor by slowly interfering with policy and other decisions of the region to suit its interest. The Middle Eastern region will be forced to adopt policies that are beneficial for China as otherwise, China may threaten to pull out all the investments and severe trade partnerships.
To counter China’s dominance over the region, it is important that the US
re-thinks its policy of disengaging in the Middle East and slowly enter back the region and not let China dominate over it. The increasing influence of China in the Middle East has posed a danger to the position of the US and some think tanks believe it also dangers the national security interests of the US. To counter the influence of China, legislation was passed by the Senate Foreign Relations Committee having a provision for USD 300 million to combat malign Chinese influence and promote accountability and transparency in the projects associate with China’s debt-trap diplomacy and the Belt and Road Initiative. In the short term, the increased influence in the trade and economic development of the region may be beneficial but in the long run, the countries in the region must be careful to not fall into the trap and lose control over the region. The region must ensure to have relationships with the other parts of the world as well so that in the event China threatens the region must not find itself in a position where there is no other region to support them.

Our Correspondent

Our Correspondent

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