The Gulf and China: A Broadening Partnership?

The MED This Week newsletter provides expert analysis and informed insights on the most significant developments in the MENA region, bringing together unique opinions on the topic and reliable foresight on future scenarios. Today, we focus on the recent visits of Gulf representatives to China, in the attempt to enhance their respective bilateral relations with Beijing. At the core of this recent diplomatic activism, there are several vital economic and security issues, starting with the rising concerns over the stability of Central Asia and the ongoing negotiations in Vienna over the JCPOA.

On January 10th, Foreign Ministers from Bahrain, Saudi Arabia, Kuwait, Oman, and the Secretary-General of the Gulf Cooperation Council (GCC), arrived in China for a five-day visit to deepen their relations with Beijing. Here, the Gulf monarchies’ representatives are holding a series of bilateral meetings with their Chinese counterpart, Wang Yi, aimed at consolidating their bilateral partnerships in numerous fields. On the one hand, GCC states are seeking closer ties with Beijing, mainly to diversify their oil-dependent economies and encourage Chinese investments in the region. In this framework, the GCC’s unprecedented visit will likely pave the way for practical progress in negotiating a Free Trade Agreement (FTA) between the two sides, first tabled in 2004 and reopened last year during Wang Yi’s tour in the Gulf. On the other hand, China has sought to bolster its ties with GCC states, representing Beijing’s most significant trade partners and energy suppliers in the Middle East. In parallel with the GCC’s official tour, Iranian Foreign Minister, Hossein Amir-Abdollahian, is set to visit China on January 14th. The growing concerns over Central Asia are likely to be among the topics covered in the discussions the Iranian Foreign Minister will have in Beijing. Over the past years, China has reportedly bought an increasing volume of Iranian oil in spite of US sanctions. Furthermore, China has been supporting the talks currently ongoing in Vienna, aiming to revive the 2015 Iranian nuclear deal. Overall, this first-of-its-kind diplomatic activity may also signal China’s intentions to step up its role in the Middle East region, which is vital for the country’s strategic interests and an area where the United States has traditionally been a dominant power. At the same time, it manifests how Gulf-China relations are nowadays going beyond economic ties.

Experts from the ISPI MED network react to the deepening ties between GCC countries and China.

China is building a comprehensive strategic partnership with the Gulf

“The Gulf Cooperation Council (GCC) high-level delegation tour of China represents Beijing’s increasing attention to boosting regional trade and security cooperation. The key drivers of China’s policy towards the Gulf are not only rooted in the exploitation of energy resources. The meeting represents a renewed role for a comprehensive strategic partnership between Beijing and GCC to promote security and stability in the Middle East. Also, China and Gulf states’ cooperation has been accelerated by the Gulf monarchies’ diversification from being economies solely based on hydrocarbons towards a high-tech development and Beijing’s offer of comprehensive digital infrastructures. The US pivot to the Indo-Pacific amplified the Gulf monarchies’ perception of abandonment from Washington, and Beijing is rapidly filling the gap. At the same time as China’s GCC tour, in fact, Syria joined the Belt and Road Initiative, and the Iranian Foreign Minister Hossein Amir-Abdollahain is expected in Beijing in the coming days.”

Alessandro Arduino, Principal Research Fellow, Middle East Institute, National University of Singapore

The GCC in Beijing: a cohesive step towards China?

“Foreign ministers from Saudi Arabia, Kuwait, Oman and Bahrain along with the Secretary-General of the Gulf Cooperation Council (GCC) Nayef bin Falah al-Hajrah are in Beijing for a five-day visit. This is interesting because it is a (mostly) GCC foreign policy cohesive action, something we haven’t seen much of in the last five years. Second, the visit represents those GCC oil exporters most focused on Chinese buyers, and notably the UAE and Qatar are not there. The visit follows a Chinese outreach initiative, taking the lead from Beijing. The challenge for China will be broadening the relationships outside of energy needs, to strengthen ties to withstand pressure from any future geopolitical tensions.”

Karen Young, Senior Fellow and Director, Program on Economics and Energy, MEI

Building a partnership that goes beyond the energy sector

“The recent China-GCC meetings can be viewed along two broad lines. Firstly, the more the US focuses on Indo-Pacific to contain China and retreat from the Middle East, the more China is increasing its role in the latter region and becoming its most significant global partner. Secondly, in terms of GCC-China relations per se, the recent meetings can be viewed in terms of: a) China preparing GCC countries for the Iranian nuclear deal developments (JCPOA is likely to be revived soon); b) Speeding up the China-GCC Free Trade Agreement for which both sides are enthusiastic (likely to happen in mid-term, if not the short-term, future); c) Enhancing cooperation in new booming fields such as green energy, fin-tech, and the like, which enhance both Chinese interests and GCC countries’ economic diversification strategies and national visions; and finally: d) Boosting security, military, and intelligence cooperation with the GCC countries.”

Mohammadbagher Forough, Research Fellow, GIGA; and Research Associate, Clingendael

Riyadh bets on parallel partnerships with Washington and Beijing

“For the Kingdom, Saudi Arabia’s relationship with China has represented a big opportunity so far, driven by the structural interdependence between Vision 2030 and the Belt and Road Initiative: energy, investments, technology, infrastructures and sea lanes. However, from that moment on, things began to get more complicated than before, due to the “security node”. In fact, the word “security” widely appears in recent Saudi-Chinese meetings’ accounts. After years of economic-oriented partnership, this highlights that a new, post-American geopolitical season in the Gulf has already become a reality (see the Saudi Arabia-China cooperation on ballistic missiles production in the kingdom). Saudi Arabia continues to bet on parallel partnerships with Washington and Beijing, hoping to navigate through the regional fallouts of this systemic rivalry. For Riyadh and the neighbouring monarchies, this is the only – although perilous – way to preserve their national interest”.

Eleonora Ardemagni, Associate Research Fellow, ISPI

Abu Dhabi: the great absentee in Beijing

“The UAE and China have a comprehensive strategic partnership – the highest form of diplomatic relationship and cooperation that China can offer other countries. But the absence of the UAE from the Gulf delegation in Beijing this week may indicate a strategy of hedging as it tries to reduce tensions with its other main security partner, the US. There have been differences between the two in recent months, following Washington’s claims that the Chinese have been building at a military facility at a port near Abu Dhabi, American opposition towards Huawei’s developing the UAE’s 5G network and the Emiratis’ decision to cancel a planned purchase of 50 Lockheed F-35 fighter jets.”

Guy Burton, Adjunct Professor, Vesalius College; and Visiting Fellow, Sectarianism, Proxies and De-sectarianism Project, Lancaster University

The ongoing recalibration of Sino-Iranian relations

“The Iranian foreign minister’s upcoming visit to Beijing is part of an ongoing recalibration of the China-Iran relationship. For the past three years, the China-Iran relationship was strained by Iran’s perception that China was underdelivering on a promised economic partnership, having scaled back both oil and non-oil trade in the face of U.S. secondary sanctions. China, for its part, considered Iranian-supported attacks on oil infrastructure and tankers in Saudi Arabia and the UAE—critical parts of China’s energy supply chain—to be dangerous provocations. It appears that Iran’s efforts to engage in talks with its Arab neighbours have helped reduce some of the strain on relations between Tehran and Beijing, in part by preserving Chinese energy security. Chinese oil imports from Iran have risen in turn. If this regional dialogue continues and if the JCPOA can be restored, Iran may finally catch up to its neighbours and begin to see the fruits of a more functional political and economic relationship with China.”

Esfandyar Batmanghelidj, CEO, Bourse & Bazaar Foundation; and Visiting Fellow, ECFR

Biden is becoming more cautious of China

“The Biden administration is becoming more circumspect of China as it is deemed the only competitor able to combine economic, diplomatic, military, and technological power to challenge an open international system. Chinese support for major infrastructure projects might be welcome by the US in principle, but the import of Huawei 5G equipment and armed drones are perceived to be problematic. Recent analysis from US Central Command (CENTCOM) is that China is expanding its military presence to secure vital routes of energy and trade. An alleged Chinese military facility in the UAE highlighted these concerns, although there was some dispute about its function. The White House was quick to act because a hybrid model of port operations coupled with military use could set a precedent in the region and undermine US hegemony. Washington is responding with enhanced economic and strategic cooperation, such as the new Quad consisting of the US, India, Israel and the UAE, building on the Abraham Accords. Greater conditionality is also being introduced on major arms sales to the UAE such as the F-35.”

Robert Mason, Non-Resident Fellow, AGSIW; and Fellow, Sectarianism, Proxies and De-sectarianisation Project, Lancaster University