Will China be the Middle East’s next hegemon?
21 Apr 2021|

President Joe Biden has announced that he will withdraw US troops from Afghanistan by 11 September, finally ending America’s longest war ever. The move was indicative of a broader shift by the United States away from the Middle East—one that has been a long time coming. Will anyone take its place in the region?

China seems to hope so. Just a couple of weeks before Biden’s announcement, Chinese Foreign Minister Wang Yi was in Tehran to sign a 25-year ‘comprehensive strategic partnership’ (CSP) deal with Iran, which will include economic, political and security cooperation. The move has the US concerned—and for good reason.

Yes, CSPs are a standard foreign-policy tool for China, which has already established them with other countries in the region, including Iraq and Saudi Arabia. And some have most likely exaggerated the scope of the CSP with Iran, such as by reporting that it includes US$400 billion of Chinese investment in Iran. (Neither party has confirmed any specific figure.)

But even if the CSP doesn’t elevate the China–Iran relationship to new heights, it is the first such partnership China has concluded with a long-established adversary of the US. At the same time, China is deepening ties with America’s closest allies in the Middle East, including the United Arab Emirates, Egypt and even Israel.

For now, China’s motivation seems primarily economic. Aside from gaining access to the region’s energy resources, China can boost its profile in cutting-edge sectors by cooperating with Israel’s high-tech industries. That’s why—much to the annoyance of the US—it has sharply increased its investment in Israel in recent years.

China has also looked to Israel to advance its connectivity ambitions, encompassed by the Belt and Road Initiative. Just as China has already taken control of seaports elsewhere across Asia and Europe, it has established itself at the Israeli port of Haifa. Similarly, anticipating reliance on Iranian oil, China has developed a direct shipping route to the port of Bandar Abbas on the Strait of Hormuz.

One thing the US doesn’t have to worry about—at least for now—is China stoking conflict in the Middle East. Yes, the CSP with Iran mentions security cooperation, but it’s no military alliance—and China isn’t taking sides in any military conflict. After all, China also conducts military drills with Iran’s archrival, Saudi Arabia.

The last thing China wants is for a regional conflagration to disrupt oil exports or destroy its investments in the region. This makes China a responsible stakeholder in regional peace. But it doesn’t signal China’s willingness to underwrite security in the Middle East. Military alliances are not China’s preferred tool in its global competition with the US.

China has also been careful not to be drawn into the region’s long-running conflicts. While China recently suggested that it would host direct talks between Israeli and Palestinian leaders, this should not be given too much credence. China is well aware that it was only because of America’s massive expenditure of blood and treasure that China has been able to expand its economic influence in Afghanistan and Iraq. That is not the kind of investment it’s interested in making.

Ultimately, China’s economic interests are best served by keeping the Middle East’s established US-led security system intact. This partly explains why China’s main partners in the Middle East are mostly US allies. China made an exception when it signed the CSP with Iran, but that, too, was an economic calculation: it wants to revive bilateral trade, which has suffered mightily since the US withdrew from the 2015 Iran nuclear deal and reinstated sanctions in 2018.

In fact, it was only after sanctions were reintroduced that the idea of the CSP was born. The timing of its signing—just as the Biden administration tries to renegotiate and rejoin the nuclear deal—was a calculated decision by China to strengthen Iran’s bargaining position, thereby, it is hoped, hastening the lifting of sanctions.

Iran will, however, pay a high price for its partnership with China, which has taken advantage of its economic travails to lay claim to a heavily discounted supply of oil. During earlier phases of the CSP negotiations, some Iranians warned that China was seeking an exploitative deal, much like the agreements that ended with it wresting control of Sri Lanka’s Hambantota Port.

Iran’s powerful Lebanese proxy, Hezbollah, should also be wary of China. In particular, Hezbollah will need to reconsider its threat to launch a ballistic-missile attack on Israel’s Haifa port, given that China now all but owns it.

As for the US, its military superiority in the Middle East will probably remain undisputed for some time. But military power won’t be enough to stem China’s strategic rise in the region (and beyond). For that, the US will also need to boost its political clout, economic engagement and cultural influence. Otherwise, as Biden put it in February, China will ‘eat our lunch’.