28.01.2016 Author: Vladimir Terehov

Chinese President’s Tour of Greater Middle East

1453557396339From January 19 to January 22, 2016, Chinese President Xi Jinping visited the Kingdom of Saudi Arabia (KSA), Egypt and Iran, that is, the three leading countries in the Greater Middle East (GME).

It was the first visit of the leader of one of the major world powers to the extremely important and troubled region of the GME since his coming to power in early 2013. It coincided with the 60th anniversary of the establishment of official relations between China and the Arab League. Speaking at the headquarters of the Arab League in Cairo, Xi Jinping stressed the reliable and trust-based nature of China-Arab relations that “cannot be bought for money”.

The special importance of Saudi Arabia for China is mainly due to its role of one of the world’s largest suppliers of hydrocarbons. Up until 2015, the KSA was the leading exporter of crude oil to China. Now it is Russia.

Since the establishment of Sino-Saudi diplomatic relations in 1990, the bilateral trade turnover has increased by 230 times, reaching about $70 billion in 2014. About 160 Chinese companies specializing in rail transport, communication systems and energy operate in the KSA today. In recent years, China has become one of the major partners of the Kingdom to address the “oil dependency” problem that is quite familiar to Russia.

In particular, the project symbolizing the future shape of the country’s economy is the YARSEEF oil refinery plant worth $10 billion that is implemented by Saudi and Chinese firms (Aramco and Sinopec) with shares of costs at 62.5% and 32.5%, respectively. After the plant has reached its full production, it will be able to provide about 6,000 jobs. The first place visited by the high-standing Chinese guest was the city of Yanbu’ al Bahr on the Red Sea coast where YARSEEF is located. Speaking here, Xi Jinping also stressed a broader context of China’s participation in the development of the industrial region of the KSA on the Red Sea coast recalling the concept put forward in 2013 of reviving the land and sea routes of the ancient “Silk Road”.

During the meeting, Xi Jinping and King Salman Al Saud announced the intention of China and the Cooperation Council of (six) Gulf Arab Countries to conclude an agreement in 2016 in order to establish a free trade zone.

During the visit of President Abdel Fattah al-Sisi to China in December 2014, China established the format of a “comprehensive strategic partnership” with Egypt, the second country visited by Xi Jinping. Currently, 15 projects totaling $15 billion primarily in the same areas of transport infrastructure and energy are in the planning stage or in construction in Egypt with different levels of collaboration with China.

21 more agreements were signed during the current Sino-Egyptian summit. In particular, China intends to grant low-interest loans totaling $1.7 billion to two Egyptian banks.

Taking into account the recent difficult situation in the Egyptian economy (in particular, its tourism business), the Chinese aid is very timely. It is no coincidence that the leading Egyptian newspaper Al-Ahram noted that “China’s support for Egypt allows its population to feel independent when choosing their country’s future.

The growth in importance of the largest Arab country for China is evidenced by the invitation by Xi Jinping of his Egyptian counterpart to take part (as a guest) in the next summit of the “Big Twenty” that would be held in China in September of this year.

The last country visited by Xi Jinping during his tour of the GME was Iran. It had not been visited by Chinese leaders since 2002although mutual visits of government officials of a lower rank had been held regularly, and in May 2014 Beijing was visited by Iranian President Hassan Rouhani.

Comments of Bloomberg’s expert on this visit drew special attention to the fact that the Chinese leader was the first head of one of the world’s major players to visit Iran since the international sanctions were lifted, which “cleared the way for its reemergence in the global economy. It is important to note that during the economic boycott of Tehran by Western countries, Beijing continued to expand economic ties with Iran. Over the past seven years, China has become the main trading partner of Iran and removed Germany from this position. In 2014, the volume of bilateral trade amounted to $50 billion. As suggested by the author of the above comment by Bloomberg, Xi went to Tehran primarily with a view of further strengthening the positions won in Iran during the years of its blockade conducted by China’s key geopolitical opponent together with its European allies.

The success of Xi Jinping’s mission to Iran was promoted by Tehran’s high appraisal of the fact that, along with Russia, China had been among the few major world powers that did not stop their relations with Iran during its time of difficulty. According to H. Rouhani, “Iran will never forget the friends who kept good relations with it when it was subject to sanctions”.

The bilateral agreements signed in Tehran provide for the participation of China in strengthening the banking and financial system of Iran, the construction of high-speed railways and, of course, the further development of cooperation in the development of gas fields in the country.

Chinese columnists also have noted the fact that the visit of the Chinese leader in Iran after his visit to the KSA took place against the background of sharp aggravation of relations between the two leading countries in the GME, the immediate reason for which was the execution of a group of Shiite clerical leaders headed by Sheikh Nimr al-Nimr in early January this year. In this regard, it is quite possible that the Chinese leader, among other things, carried out a mediation and peace-making mission in the region that is very important for him.

Naturally, the course and the outcome of the visit of the Chinese leader in the three leading countries in the GME were under the spotlight of the United States, China’s main geopolitical opponent. In particular, Senator John McCain considered it as a manifestation of “the global expansion of the political influence of China” and commented harshly on Xi Jinping’s visit. It is noteworthy that he made the above statement immediately after the meeting of the Senate Committee on Armed Forces of the United States headed by him that was held on the subject of American strategy in the GME.

The immediate response of Chinese Global Times to the statement by John McCain suspected the prominent American politician of a “conspiratorial mindset” in evaluating the foreign policy goals of the Chinese leadership. The publication of the Chinese edition noted a counterproductive impact of such statements on the public opinion in the United States in an extremely important aspect of the relations between the two major world powers.

Finally, it is fundamentally important once again to note tools which China (as well as Japan and India) uses quite successfully to strengthen its position in the GME, as well as in all other regions of the world. These tools are reflected by the illustration to the article in Chinese Global Times titled “Iran Important Outpost for Belt and Road.” The picture shows a typical Iranian shaking hands with a Chinese construction engineer wearing a protective helmet and holding a briefcase under his arm (probably with technical documentation) and a rolled sheet of drawing paper with drawings in his hand.

But crucial industrial projects cannot be implemented without financial support. And China is providing such support. Speaking in Cairo at the headquarters of the Arab League, Xi Jinping said that the total amount of various Chinese loans granted to countries in the region came to about $55 billion.

China also promotes training of local human resources. In particular, in the aforementioned speech delivered by Xi Jinping at the headquarters of the Arab League, he announced that 10 thousand scholarships would be granted to Arab youth to study in Chinese universities.

We cannot, however, exclude the possibility that in the future (but on no account right now) China will employ military instruments to ensure its presence in the GME. However, the motivation for such a step is unlikely to be due to internal “infighting” in the anthill” that the region has always seen. It will be primarily due to a quite possible increased military presence there of China’s main Asian opponents, that is, Japan and India.

The current format of strengthening China’s position in the region, the inner life of which is characterized by an increased turbulence, gives reason to remember the conventional wisdom that asserts that it is not necessary to stir an anthill with a stick to influence events there.

China undoubtedly knows this ancient wisdom. This fact is once again evidenced by the outcome of the visit of Chinese leader Xi Jinping to three leading countries in the GME.

Vladimir Terekhov, expert on the issues of the Asia-Pacific region, exclusively for the online magazine “New Eastern Outlook”.

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