China and an emerging new order in the Middle East

On March 10, two regional rivals, Iran and Saudi Arabia, reached a deal that lays out a step-by-step program on reinstating relations between the two nations. The deal, which was signed in Beijing, speaks volumes about China’s growing influence in the Middle East, especially amid the region’s traditional security guarantor’s – the United States’ – distractions in Ukraine and the Indo-Pacific region.

News of reconciliation between Iran and Saudi Arabia was well-received by the Biden administration. Spokesman for the White House National Security Council, John Kirby, said that they welcomed the deal,[1] while US Secretary of State Antony Blinken praised China for brokering the deal, stating that it would benefit the entire region.[2] Yet, many have warned about the geopolitical consequences the deal might have on Washington’s regional standing.[3] America’s positive stance on the deal, however, is driven more by the fact that the US would not have been able to negotiate such a deal because of its traditional rivalry with Iran.

The opening of the embassies is a critical element of the rapprochement between the two countries; however, there remain numerous issues to be addressed, such as the unfreezing of each other’s economic and financial assets in the oil and gas industry, the facilitation of bilateral trade, and even potential Saudi investment into Iran. Nonetheless, the Saudis will likely remain cautious for the time being, as it is not known how US sanctions on the Islamic Republic will impact financial activity between the two sides.[4]

Geopolitically, the deal will touch upon a vast geography from Lebanon, where Iran and Saudi Arabia have supported different political forces, to Jordan and Bahrain, which could likewise seek rapprochement with their long-time rival Iran. An additional dimension of the Iran-Saudi deal could be a rapprochement in Syria, where Saudi Arabia and Iran have opposed each other for more than a decade. Indeed, if we consider the latest rhetoric coming from the Saudis, there are indications that the Kingdom might no longer oppose Bashar al-Assad and his regime.[5] In fact, the Saudis could well drop their resistance to the al-Assad regime in exchange for Iranian concessions in either Yemen[6] or Lebanon.

The Iran-Saudi deal could also mean that the two sides will make efforts to reduce the enmity in the information sphere. For instance, one of the expected results of the deal is that the Saudis will decrease, or altogether change, the negative messaging through the Farsi-speaking news agency Iran International, allegedly funded by Riyadh. Similarly, the Saudi concession would pave the way for a similar change in anti-Saudi rhetoric in the Iranian state-controlled media.

Yet, despite all this progress, a major problem – Iran’s nuclear program – remains unresolved. The consensus in Saudi Arabia is that the Islamic Republic will, sooner or later, reach a point of no return in its nuclear program, which will destabilize the region and increase threats to the Kingdom. The latter also understands that Iran will not abandon its efforts to create a nuclear bomb. In January this year, Saudi Minister of State for Foreign Affairs Adel al-Jubeir argued that “Iran should relinquish its nuclear program, which violates international agreements.”[7] In December 2022, a joint statement between the Gulf States and China urged Iran to be more cooperative on its nuclear program.[8] Saudi Arabia has even reportedly asked the US to develop its own nuclear program as a balance to Iran.[9] Clearly, the nuclear issue remains unresolved and thus tensions between the two Middle East countries are bound to re-emerge.

Enter China

The Saudis and Iranians chose Beijing as a mediator as a part of their efforts to play a multi-vector foreign policy.[10] China was likely purposefully chosen as a mediator  to signal Iran and Saudi Arabia’s independence. It is symptomatic that the rapprochement takes place amid uncertainties around America’s position in the Middle East. Though the US has extended its presence in Iraq,[11] and has maintained its security cooperation with the Saudis and other Gulf states, China’s facilitation is notable and could be a harbinger of coming changes. For this reason, the US may have to reassess both Beijing’s intentions and the Gulf states’ anticipations. For instance, it would need to reconsider the idea that the Gulf States would solely rely on America when it came to security issues but would cooperate with China on economic and investment ties.

Moreover, the reconciliation takes place at a time when Middle Eastern countries are reaching rapprochements with one another without US involvement. For instance, Turkey’s normalization of ties with Saudi Arabia,[12] and Qatar’s steps to improve relations with its Gulf neighbors, are quite revealing. Indeed, critics argue that under the Trump leadership, just two and half years ago, the Middle East was still dominated by the US; its peace initiatives worked well and, under the Abraham Accords, Saudi Arabia may have been the next Arab country to normalize ties with Israel. In contrast, under the Biden administration, the US has lost its initiative in the region, and China is now gradually trying to fill the emerging geopolitical gap. The Saudis are no longer relying on Washington, and where they still do, uncertainties are growing.

These improvements in relations between Middle East countries are also taking place amid Eurasia-wide geopolitical disturbances, which are distracting the US. For instance, the war in Ukraine, in which the US has invested huge amounts of financial and political capital, and the competition with China in the Indo-Pacific region, which is now increasingly seen by Washington as an existential battle, have been major distractions for the US.

It is now increasingly clear that the greater the Chinese economic interests in the Middle East, the bigger the incentives for Beijing to become more geopolitically active in the region. In the longer term, this could make China a security actor as well, which would seriously curtail America’s traditional standing. Moreover, the propaganda effect of China’s involvement might have a much bigger impact. If China was able to broker a deal between such enemies as Iran and Saudi Arabia, other actors in the Middle East, too, might hope that China would one day help them find common ground with adversaries, settle disputes, stop wars, or perhaps something more.

China is also attractive because it promotes security via cooperation with all sides, while the US operates through a system of alliances. The latter might be a powerful military/security disincentive for a rival to go against America’s or its allies’ interests, but this approach nevertheless contains flaws and may deepen divisions, while the Chinese model is more about inclusivity without any major preconditions such as progress in democratic development or human rights. Though little is known about how China intends to reinforce the Saudi-Iran deal, much will depend on Tehran and Riyadh’s calculations. However, it is also possible that China is not seeking a complete rapprochement.

With its success in brokering the Iran-Saudi deal, China could indeed aim for bigger prizes such as helping to normalize relations between the Palestinians and Israelis. What could make this a possibility is the fact that all those involved regard Beijing as a reliable actor that does not take sides and is motivated by achieving real progress.

Given China’s recent success, it will likely push for the expansion of the Belt and Road Initiative (BRI). US politicians now fear that China will move forward with its ambitions to reshape the region’s railway and port infrastructure, which would deny the US and other Western countries access to the Middle East’s oil and gas resources, or at least limit their access. Another area of development is expected to be in the field of 5G and 6G networks.[13] China might also use its growing ties with Iran and the Saudis to expand its arms sales, especially military drones and missiles. Naval drills with Iran might also reach another level, while with the Saudis, Beijing will likely work on joint military exercises, greater intelligence sharing and satellite-communications. Helping the Saudis develop a domestic ballistic missile system is another possible area for cooperation.

More broadly, China might be laying the ground for more ambitious projects such as multilateral formats involving major actors in the Middle East. The transactional approach used by Beijing has so far been successful, but in order to become an actor that is truly regarded as a reliable partner, or in some cases an arbiter, China needs to adopt an element of multilateralism. It is unlikely that Chinese multilateralism will be anything like the Western one (with requirements relating to internal governance style or official alliances), but it could still serve as an umbrella for constructing a more secure Middle East. In comparison with the Western model, Chinese multilateralism is loose, devoid of alliance structure, and more focused on economic cooperation.

If China demands stark choices from Middle Eastern countries, this would most likely scare off its partners. In order for an ambitious agenda to be acceptable to a larger number of states, the new world order ideas should not be enforced on states, but rather presented to them in a less radical manner while striving to win their trust. Trust and prestige are hard to attain, but without these two components, constructing a viable Middle East order would be an impossible task. Trust and prestige are won, not by forcing limited options on other actors, but through the internal strength of a state which does not represent a threat but serves as an example for emulation.

Beijing is taking advantage of the fact that not all countries view the geopolitical order in the Middle East in stark terms. For many in the Global South, having to make a choice between Beijing and Washington is a non-starter. Rather, they seek their own agenda, which is influenced by what America and China want, but only partially. For the Middle East, the rise of China is bringing opportunities to balance foreign relations. Saudi Arabia and the Gulf states are unwilling to replace their reliance on the West (or America) with dependence on China, which means that multi-vectorism in foreign policy has become a fashionable and more workable approach. It allows greater room for maneuverability, something which has been absent in the Middle East over the past years.

The Chinese will remain pragmatic when it comes to Middle East politics, especially in terms of its relations with the Islamic Republic. They see that the country is under heavy sanctions and that overall it is a risky market. Chinese companies are simply not willing to put their interests at risk and come under American sanctions. Around the time of Iranian President Ebrahim Raisi’s trip to China in February, Sinopec, China’s energy giant, ceased its operations in Iran’s Yadaravan oil field.[14] Though later denied by Iranian officials on the ground that negotiations were still ongoing, the move indicates how sensitive China is to the sanctions imposed on the Islamic Republic. And this is not the first time Chinese companies have withdrawn from Iran’s gas and oil industry.[15]

Chinese pragmatism can also be observed within a nuanced understanding of Iran’s limited choices. Beijing knows that the Islamic Republic needs China, especially to balance the pressure from the collective West. And though Tehran harbors no illusion about Beijing’s aspirations in the Middle East and especially the Gulf area, it also cannot allow for rupture or even a slight downgrade in bilateral ties with China. The problem is that Iran now wants more than just rhetorical cooperation on the need to curb US power in Eurasia. Investments and support in practical matters is what Iran now truly wants and expects to receive from China.

Most importantly, Beijing will most certainly seek to grow its profile, if not supplant the role of the US in the region. This could include building a peacemaking role and presenting various political formats to opposing sides so that they at least engage in talks with each other despite their disagreements. Nevertheless, Beijing will act with caution as too much responsibility could be counterproductive. At this stage, it is critical for Beijing to manage both expectations from local actors and its own interests.

References 

[1] “U.S. Welcomes Iran-Saudi Deal, But Voices Skepticism,” RFERL, March 10, 2023, http://bitly.ws/BLWZ.

[2] “Xi Mediation Offer Spurred Iran Deal Talks: Saudi Official,” France 24, March 15, 2023, http://bitly.ws/BQ6f.

[3] Natasha Turak, “The China-brokered Saudi-Iran Deal Has Big Repercussions for the Middle East – and the U.S,” CNBC, March 15, 2023, http://bitly.ws/BLXa.

[4] Natasha Turak, “Saudi Arabia Could Start Investing in Iran ‘Very Quickly,’ Finance Minister Mohammed Al-Jadaan Says,” CNBC, March 15, 2023, http://bitly.ws/BLXh.

[5] Benoit Faucon, “Arab Nations Seek to Bring Syria in from the Cold amid Broad Middle East Realignment,” WSJ, March 15, 2023, http://bitly.ws/BLXp.

[6] Dion Nissenbaum, Summer Said, and Benoit Faucon, “Iran Agrees to Stop Arming Houthis in Yemen as Part of Pact with Saudi Arabia,” WSJ, March 16, 2023, http://bitly.ws/BLXw.

[7] Natasha Turak, “Iran Has an Obligation to Give Up Its Nuclear Program, Saudi Minister Says,” CNBC, January 18, 2023, http://bitly.ws/BSjy.

[8] “Statement of the Riyadh Summit for Cooperation and Development between the GCC and the People's Republic of China,” Saudi Press Agency, December 9, 2022, http://bitly.ws/BSkL.

[9] Dion Nissenbaum, Dov Lieber, and Stephen Kalin, “Saudi Arabia Seeks U.S. Security Pledges, Nuclear Help for Peace with Israel,” WSJ, March 9, 2023, http://bitly.ws/BuCT.

[10] “Symposium on the Chinese-brokered Iran-Saudi Deal,” Institute for Peace & Diplomacy, March 16, 2023, http://bitly.ws/BLXM.

[11] Idrees Ali and Amina Ismail, “Pentagon Chief, in Unannounced Visit to Iraq, Pledges Continued U.S. Troop Presence,” Reuters, March 8, 2023, http://bitly.ws/BLXY.

[12] “‘A New Era’: Saudi Arabia’s MBS in Turkey as Nations Mend Ties,” Al Jazeera, June 22, 2022, http://bitly.ws/BLY9.

[13] Claude Barfield, “Biden Touts Saudi 5G Open Radio Access Network Deal, but Huawei Still Dominates the Middle East,” AEI, August 1, 2022, http://bitly.ws/BLYd.

[14] “Chinese Are No Longer Willing to Work on Iran Oil Projects,” Iran International, February 15, 2023, http://bitly.ws/BVuz.

[15] Emil Avdaliani, “Straightening Out China-Iran Ties,” China Observers, February 28, 2023, http://bitly.ws/BLYo.