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Xi's Middle East balancing act

Gabriel DomínguezJanuary 18, 2016

Closer economic ties will top the agenda during Chinese President Xi Jinping's visits to Egypt, Iran and Saudi Arabia this week. However, Chinese mediation in the feud between Tehran and Riyadh is unlikely, say experts.

Philippinen Apec Gipfel in Manila Xi Jinping
Image: picture alliance/AA/Stringer

President Xi is visiting the three Middle Eastern countries from January 19 to 24, said China's Foreign Ministry. The trip - the first by a Chinese head of state to Saudi Arabia since 2009, to Egypt since 2004, and to Iran since 2002 - comes just days after international sanctions on Iran were lifted following the UN nuclear agency's announcement that Tehran had scaled back its nuclear program.

But the three-nation tour also comes amid an intensifying rivalry between Tehran and Riyadh following Sunni-majority Saudi Arabia's execution in early January of Shiite cleric Nimr al-Nimr, which prompted outrage among Shiites. After Iranian protesters responded by storming Saudi diplomatic facilities in the country, Riyadh severed relations with Tehran, which, in turn, cut all commercial ties with Riyadh.

In light of the growing regional tensions, Chinese Vice Foreign Minister Zhang Ming recently told reporters China would not be taking sides. "Regarding some of the region's problems, China has always taken a balanced and just position," Zhang was quoted as saying. A few days later, Zhang added the Chinese have maintained thorough communication with countries in the Middle East through various channels "in a bid to ease regional tensions."

A diplomatic push?

The overlap of President Xi's visit with the deterioration of Iranian-Saudi relations has prompted speculation that China is trying to promote itself as a potential mediator. But analysts such as Flynt Leverett, a professor of international affairs at Penn State University, believes such speculation is "overblown" given that Xi's trip has been in the works for well over a year.

"Once in the region, Xi will undoubtedly affirm, at the highest levels, the message that both sides should show restraint and work to deescalate bilateral tensions. Beyond this, though, China is unlikely to seek an ongoing diplomatic role for itself," Leverett told DW.

Zhiqun Zhu, Director of The China Institute at Bucknell University, agrees. The expert points out that China's primary interests in the Middle East are economic and strategic, and that Xi's visit is therefore not intended to resolve the regional dispute.

"President Xi is likely to emphasize China's policy that disputes need to be resolved peacefully through dialogue. However, anyone hoping that China will serve as an honest broker to bring the disputants together will be disappointed," he told DW.

This view is shared by Andrew Small, a fellow with the Asia program of the German Marshall Fund of the United States. The expert in Chinese foreign policy argues that Beijing would have preferred not to be visiting Saudi Arabia and Iran on the same itinerary. "But it would have been even more problematic in the present circumstances to visit one country without the other, so the Chinese have bitten the bullet and gone ahead with this 'paired' trip," the expert told DW.

Nonetheless, Small added, China is still cautious about taking on a serious political role in the Middle East, and this is "neither a situation where the two parties involved in the feud are soliciting Beijing's help as a broker, nor one where it has much leverage to do so either."

The regional rivalry is also believed to be one of the main reasons why it has taken so long for a Chinese president to visit these three countries - all of which are founding members of the China-led Asian Infrastructure Investment Bank (AIIB). In fact, the Middle East has thus far been the missing region from President Xi's global diplomacy push, with visits to all three countries having been postponed since last year.

A window of opportunity

Xi was expected to visit Saudi Arabia and Egypt last spring, with Iran to follow on a subsequent trip, but the timing coincided with the Saudis launching their military campaign in Yemen, so the trip was postponed.

Saudi-Arabien Erdölraffinerie
China imports on average one million barrels of crude per day from Saudi ArabiaImage: picture-alliance/dpa

"The delays have become a political point of sensitivity, particularly with Iran, which has been actively soliciting a visit for some time. But there were additional reasons for holding off, as China waited for the nuclear deal to come into effect," said Small, adding that the fact that it has taken so long into Xi's term to embark on such a trip is indicative of how "politically challenging" the region is for the Chinese leadership.

It therefore seems that Beijing is still treading carefully in the Middle East. In fact, at five days, the tour will be a relatively short one - Xi spent almost as much time in the UK alone as he's spending in these three countries combined.

"President Xi is more about conflict avoidance than outright mediation, and he's is traveling to both Iran and Saudi Arabia to maintain a balance. So the decision to go now is probably because this is a window of opportunity before things get worse," Michal Meidan, a China expert at UK-based think tank Chatham House, told DW.

Not just oil

And with Iran poised to open to the world again, many argue there is also an imperative for the Chinese to take steps to consolidate their ties with the region. In fact, some of the areas where China wants to boost cooperation with the Middle East range from satellite technology to renewable energy and nuclear technology.

Since the 1990s, China has cultivated both Iran and Saudi Arabia as two of its most important oil suppliers. The growth of those links has also spurred broader expansion of economic ties, with China becoming a leading source of exports and investment for both Iran and Saudi Arabia.

Moreover, as Professor Leverett points out, China has come to appreciate the need for an at least minimally balanced distribution of power in the Persian Gulf in order to "forestall open-ended American hegemony" and prevent Washington from using the region's hydrocarbons as leverage against China. "This makes Iran, in particular, increasingly critical in Beijing's strategic calculations," said Leverett, who is also author of "Going to Tehran: Why America Must Accept the Islamic Republic of Iran."

As a result, analysts such as Small believe Beijing will try to move quickly to become one of the first nations to take full advantage of Iran's opening - a development China's state-run news agency Xinhua already hinted at.

Infografik Chinas neue Seidenstraße Englisch
Iran is one of the main locations where the continental transit routes for China's One Belt, One Road initiative converge

"China-Iran relations are facing important opportunities as interactions between Iran and the international community have grown markedly since the sealing of a comprehensive deal on the Iranian nuclear issue in 2015. The Chinese side will work with Iran to turn Xi's visit into a milestone in the development of bilateral ties."

China expert Meidan explains that the timing of Xi's visit - following the lifting of international sanctions - is indeed fortunate, and that Xi will come with a big business delegation as companies hope to gain or expand market share in Iran.

In this context, Rajiv Biswas, Asia-Pacific Chief Economist at the analytics firm IHS, points out that "if there is a strong Iranian economic recovery now that sanctions have been lifted, this could create a fast-growing market for Chinese manufactures in a wide range of sectors, such as automobiles, power infrastructure as well as consumer goods."

Iran and OBOR

Iran's importance also stems from its key position on China's One Belt, One Road (OBOR) initiative, given that it is one of the main locations where the continental transit routes and the maritime routes converge.

In fact, Iran is among a handful of countries in the OBOR scheme - a major avenue through which China is seeking to diversify its energy supplies - and one of the few countries in the region where, according to analyst Small, Chinese military and intelligence services have a relationship that isn't "overshadowed by their counterparts' ties with the United States."

As a result, infrastructure projects and Chinese investment will be a major focus during Xi's visit. And one of the things to watch will be how big a package Beijing will be able to announce with Iran, which should, in theory, be one of the countries where Beijing is able to step in on a very large scale with new investments.

This is why analysts reckon there will probably be more concrete "deliverables" from Xi's visit to Tehran than from his stop in Riyadh. Many are keen to see whether an agreement is reached on the development of a high-speed rail link between Urumqi in China and Iran's capital city of Tehran. But as analyst Small points out, Iran also knows that it will have other suitors in the coming period and doesn't want to cast its lot in too far with China.

Infografik Geplante Seidenstraßen-Zugverbindung Asien Englisch
Many are keen to see whether a deal is reached on the development of a high-speed rail link between Urumqi and Tehran

In this context, Xi's balancing act will involve not upsetting Saudi Arabia while he seeks to deepen ties with Iran. During his visit to Riyadh, Xi is set to hold talks with the Saudi King to discuss lifting bilateral ties to a comprehensive strategic partnership. Xi will also hold separate meetings with the Gulf Cooperation Council (GCC) and the Organization of the Islamic Cooperation (OIC). The two sides will exchange views on promoting China's cooperation with the GCC and Islamic nations, according to Xinhua.

Riyadh plays a key role in China's energy security strategy as a source of oil supply, with Chinese imports of Saudi crude averaging around one million barrels per day during the first 11 months of 2015. "With Saudi Arabia being the largest global supplier of oil to China, the long-term bilateral relationship remains very important to China's long-term energy security," said economist Biswas.

As for Egypt, the country is one of the crucial focal points of Chinese diplomacy in the Arab world. With the 60th anniversary of diplomatic relations, Xi's visit to Cairo will also be a celebratory one. And given that Cairo is also notably enthusiastic about OBOR, experts believe some announcements will be made in this regard.

It is therefore economic gains which will be the chief outcome of the trip, as analyst Zhiqun Zhu stressed. "Having friendly relations with countries in the Middle East is crucial for the success of OBOR. So cooperation will be the main theme of Xi's visit."

China Uiguren
China is worried about radicalization of the Muslim Uighur people who live in the far western region of XinjiangImage: picture-alliance/dpa/H. W. Young

Security concerns

Last but not least, the ongoing crisis in Syria and China's counter-terrorism efforts are two issues which are also likely to feature high on Xi's Middle East agenda. China is worried about radicalization of the Muslim Uighur people who live in China's far western region of Xinjiang, and Beijing is looking to work more closely with the countries that have influence over the situation on the ground.

"While tacitly supporting the military strikes on 'Islamic State,' China believes that progress there will require a political settlement in Syria, and will be encouraging the Saudis and Iranians to help facilitate that," said Small.