Beijing’s Strategy for Building Bridges with Arab Countries

In November 2019, the New York Times disclosed 400 documents regarding China’s education camps in the Xinjiang Autonomous Region, built-in 2017 for the specific purpose of indoctrinating the Uyghurs, a Turkic Muslim ethnic group. Although part of the International community recognized the Uyghurs’ “reeducation” as a thinly-disguised mass detention operation, the most influential Arab countries, such as the UAE and Saudi Arabia, did not adopt a firm position on the issue nor condemn it.

Deng Xiaoping’s Economic Plan

What might appear as a bizarre attitude from the Gulf Countries, has in truth an economic explanation dating back to the second half of the 20th century, when China established diplomatic relations with all 22 Arab countries. At that time, China’s newfound interest in Arab countries matched with its intent of turning itself into a global economic power. By the end of the ‘70s, Deng Xiaoping’s strategy to open up China’s economy to the rest of the world by enhancing foreign investments and international import export trade played a key role in country’s economic development. Deng’s financial policy demonstrated itself to be more efficient than that of his predecessors as he de-collectivized agriculture previously managed by the Communist Party and enabled the household responsibility system. Between 1952 to 1978, China’s annual GDP growth grew to a rating of 6.1, proving the economically positive effects of Deng’s reforms on the real economy.

The Open door policy began in 1978, and membership to the WTO in 2005 significantly shaped China’s economy shifting it from a monopolized State economy to a liberalized free market system, which allowed foreign enterprises to set up in China and operate in Special Economic Zones (SEZs). Since the beginning of the reforms, China’s GDP has risen tenfold, boosting annual growth of a total factor productivity by 3.8% between 1978-2005. A year before China joined the WTO, the China-Arab State Cooperation Forum (CASCF) was created. No surprise then that on the wave of the economic revival, Beijing sought out new partnerships across the Middle East. The CASCF, strongly supported by the then-Chinese President Hu Jintao, followed four essential principles including fostering economic and trade exchanges between China and the Arab League. In just four years, the trade volume between Beijing and Arab nations rocketed, reaching $ 132.9 billion in 2008.

By 2016 Arab Countries Made Up One of China’s Top Trading Partners

The economic alliance comprised of annual official meetings to strengthen diplomatic relations between both blocks, as well as Entrepreneurs Conferences and dialogue seminars. The main purpose of China’s investment policy in Arab countries was engendered by the supplies of crude oil and natural gas available in those countries. In 2016 China superseded the US as the world’s largest importer of crude oil, and by September 2019, China imported roughly 10 million barrels per day. As domestic production was not sufficient to meet internal demand, China started to import crude oil by the of the ‘90s, addressing its needs in South East Asia and neighbouring countries. In 2016, Arab countries became the seventh-largest trading partners of China, as Beijing established a strategic tie with Gulf countries as part of the dialogue with the Gulf Cooperation Council.

However, China always appeared to be the most advantaged partner in international trades, as the overall Saudi Arabia imports from China in 2015 were worth US$ 24,655 million in 2015, slightly below Saudi Arabia exports to China in the same year, accounting for US$ 5,729 million. There were similar stories for other Gulf countries, such as Oman and UAE. Oman’s exports to China in 2015 accounted for US$ 1,330 million, while its imports from China came to US$ 3,739 million. China is not even included among the top five countries in terms of UAE exports, yet the UAE imports from China in 2015 accounted for US$ 22,845 million. Currently, Saudi Arabia is the second-largest provider of crude oil to China, with a value of $29.7 billion in trade exchange.

China’s Arab Policy Paper

The CASCF later evolved into what is known as China’s Arab Policy Paper, issued by the Chinese Government in 2016. Like the CASCF, the Arab Policy Paper followed the principle of mutual non-interference in domestic affairs, as an explicit act of rupture from US foreign policy. Yet other economic investments are linking Beijing to the Gulf Countries, apart from the crude oil imports, such as the Chinese railway construction built by the China Railway Construction Corporation Limited in Saudi Arabia, and the clean coal power plant in Dubai, partly built by China’s Harbin Electric International. While it is widely understood that the economic relationship between China and the Arab States is anchored in energy, it also true that the Belt and Road initiative (BRI), launched in 2013, has enhanced Chinese investments in 70 countries, involving many Arab countries in the project. The BRI considers the Middle East as a key junction between Asia and Europe, much like the 21st-Century Maritime Silk Road (MSR), which established pivotal hubs in Saudi Arabia (Jeddah) and in Egypt by passing through the Red Sea.

The economic interest China has shown towards the Arab countries has, therefore, a dual purpose: firstly, to grant itself a steady supply of crude oil and gas and, secondly, to establish critical locations in the Middle East to ensure the success of both the Silk Road Economic Belt and 21st-Century Maritime Silk Road. Although China’s geopolitical narrative aims at avoiding any involvement in the domestic policies of Arab countries, it also has a vested interest in maintaining a peaceful situation in those countries through its military presence (Djibouti) and because of its investments. This was proven by the announcement of the Chinese ambassador to the United Arab Emirates in the summer of 2019 about the likely participation of China in the security operations of the Strait of Hormuz. Moreover, Gulf Countries took advantage of their relationship with China, gaining more room to maneuver, in deciding future relationships with the US and Europe. The US incapacity in dealing with the last summer turmoil in The Strait of Hormuz, stoked a new distrust against Washington and its military force.

Beijing Deliberately Avoids Involvement in Arab Nations’ Domestic Policies

However, Washington’s interference was felt in 2018, when US sanctions on Iran affected the trade exchanges between China and Tehran as the US desire to isolate Tehran resulted in a 34% decrease in commercial exchanges with Beijing. Before that, Iran consistently supplied China with crude oil and hostilities between the US and Iran were seen as both an opportunity for economic growth and trade exchanges for China. Back then, when Beijing and Tehran had prolific trade exchanges, China considered Iran as a critical geographic area for the development of the BRI, only to then focus its interests in the UAE and Saudi Arabia. The change of plan provides an example of the policy China is pursuing while establishing relevant relationships with Arab countries: as long as the political situation is untroubled the economic benefits are significantly worth it. That explains why China has no intention of being involved in Arab countries’ domestic policies, leaving the US to deal with them.

Although China’s geopolitical relationship with Arab countries stems from its view of itself as a global political power- especially in light of international contention regarding Taiwan and Hong Kong and its desire to show its strength on a vast worldwide scale- its financial intents are predominant over any other aims, making the BRI the most ambitious and complex project for Beijing. It is not surprising then that the major projects China has developed in the Middle East include ports and industrial parks given the importance of the Arabian Sea, the Mediterranean Sea and the Red Sea as the leading connecting corridors of the 21st-Century Maritime Silk Road. This was made possible thanks to manifold factors, such as the longstanding action of diplomacy carried out by China throughout the last seventy years and the progressive lack of interest the US has displayed toward the Middle East since the beginning of Donald Trump’s Presidency back in 2016. In terms of diplomacy, China approached the ongoing conflicts in the Middle East through the action of special envoys appointed in relation to the Sudanese situation, the Israel-Palestine war, and the Syrian war.

In 2018 the trade volume between China and Arab League nations reached 244.3 billion US dollars, while the direct investment of Chinese firms in Arab countries accounted for 1.2 billion US dollars. These sums give an insight into the role Beijing is willing to play on the world stage, thereby redefining the playing field for major world players. The Arab countries’ lack of reaction to the news of the Uyghurs detention in the education camps should be interpreted against this background, where economic ties are being put on the fast track and human rights are being relegated to secondary importance.