CHINESE leader Xi Jinping’s recent visit to Saudi Arabia and his meetings in Riyadh with Saudi crown prince Mohammed bin Salman (MBS) seemed to have raised a lot of concern, if not hysteria, in Washington.
There has been some talk about Riyadh abandoning its traditional relationship with Washington and pivoting to Beijing, leading to an evolving Chinese-Saudi axis, and about the prospects for a rising China replacing a declining America as the global hegemon in the Persian Gulf and the Middle East. Some pundits have compared the cold shoulder that US President Joe Biden received from MBS during his trip to Saudi Arabia in July with the pomp and ceremony with which President Xi was welcomed by the Saudi crown prince a few weeks ago.
Indeed, the Saudi-led decision from the Organization of the Petroleum Exporting Countries to sharply cut oil production in October – driving up pump prices in the midst of mounting inflation and just weeks before the US midterm elections – was seen as a slap in the face of the Biden administration. The Americans were counting on the Saudis to boost the supply of oil through the end of the year to help the US and its Western allies to offset the energy shortages resulting from the economic sanctions on Russia.
But the nightmare scenarios being drawn up in Washington these days reflect the foreign policy axiom that the Middle East has been and should be in the future of an American sphere of influence, and that any attempt by outside powers to challenge that reality would devastate US strategic and economic interests and in the process destabilise the region that has been a major source of energy supplies to the Western economies.
It is important to note that the global power that has been destabilising the Middle East in recent decades has not been China, but the United States. Through a series of military interventions supposedly aimed at “regime change” and “democracy promotion” in the region, it helped ignite civil wars in Iraq, Syria and Libya, among other places. That in turn has enhanced the influence of Iran, the leading anti-status-quo power in the region, and its allies.
Ironically, those US-led wars in the Middle East have eroded American power in the region. China, meanwhile, had the opportunity and the time to increase its economic and military strength – and, thanks to America’s policies, it also has had access to the region’s oil resources. And in parentheses, no, the US did not bring democracy to the Middle East.
Would
Chinese intervention in the Middle East actually make things worse in
the region where Saudi Arabia and its Arab-Sunni allies are fearful of a
radical Shi’ite Iran getting access to nuclear weapons, and American
diplomacy has failed to bring about peace between the Israelis and the
Palestinians.
Moreover, the fact that the US sees the Middle East within its sphere of influence does not mean that it controls the region, and that therefore any global power that is establishing a foothold there is, by definition, trying to “replace” it.
The bottom line is, the US is continuing to operate from at least 20 military bases and air and naval facilities throughout the Middle East, with 10 of them located in Saudi Arabia and other Arab Gulf states. At the same time, China has one military base in the periphery of the Middle East – in Djibouti – and, like many other outside powers, maintains a naval presence in the region.
Chinese interests in the region remain mostly economic in nature. As the largest annual gross crude oil importer in the world, China’s efforts to strengthen its ties with the Saudis and other Arab Gulf states make sense from the perspective of its economic interests as opposed to an effort to challenge US hegemony.
In 2019, China’s import of Saudi Arabia crude oil increased by 43 per cent, with the Saudi kingdom emerging as China’s largest source of oil. In fact, Saudi oil exports to China have exceeded those to the US.
Saudi Arabia has emerged as China’s largest trading partner in Western Asia at a time when under Riyadh’s “look East” trade policy, more than half of Saudi oil as well as that of the United Arab Emirates goes to Asia, while the Chinese have become major investors in Saudi Arabia, especially in oil-related projects.
At the same time, Saudi crude oil exports to the US have been falling in the recent decade, with the Americans receiving only 5 per cent of Saudi oil in 2021.
During their recent meetings in Riyadh, President Xi and Crown Prince Salman signed a China-Saudi partnership pact that pledged “cooperation” in finance and investment, innovation, science and technology, aerospace, oil, gas, and renewable energy, and language and culture.
And a Chinese trade agreement with the Gulf Cooperation Council was announced that could help facilitate economic ties with its members Saudi Arabia, Kuwait, Oman, and Bahrain.
One of the arguments made in Washington has been that the Chinese goal of moving away from the core US dollar pricing of the energy markets and using the yuan instead is part of Beijing’s effort to replace the US as a geopolitical and economic power, in general, and in the Middle East in particular.
But from the Chinese perspective, this policy comes in response to concerns over America’s use of its strong dollar as a political weapon, in dealing with rivals such as Iran, and, most recently, with Russia. China recognises that as a gross crude oil importer, it is subject to the whims of US foreign policy through the oil pricing system of the US dollar.
The Saudis – whose borrowing is mostly in US dollars – have been considering the idea of replacing the greenback with the Chinese yuan for its energy dealings with China. But before doing that, the Saudis would have to assess the costs of interfering with their peg to the US currency.
It is true that the ties between the US and Saudi Arabia have been facing serious challenges, with the Americans moving in the direction of energy independence and reassessing their strategic interests in the Middle East and declaring their “pivot to Asia”.
The decision by the US to sign a nuclear deal with Iran, Saudi Arabia’s archenemy; American failure to respond to Iranian attacks on Saudi oil installations; and most recently, President Biden’s attempts to punish the Saudis for their alleged involvement in the murder of an American-Saudi journalist; explain the Saudi reluctance to accede to the Biden administration’s request to increase its oil supplies – a move that also reflected its own economic interests.
But while asserting independence from US policy, the Saudis recognise that when it comes to their strategic interests, they remain militarily dependent on American military presence in the region and the supply of US military hardware.
In any case, it is clear that China, with its limited projection of military power, cannot replace the US as the Saudis’ key political-military power. And there are no signs that China is even interested in playing that role at this stage.
If anything, while asserting their leading position in East Asia, the Chinese continue to project strong reluctance to getting involved with Middle Eastern domestic and regional politics. They are expanding their relationship with Iran while continuing to strengthen ties with the Saudis or, for that matter, with Israel.
The Chinese certainly have no plans to promote peace between the Israelis and the Palestinians or to take sides in the struggle between the Arab Sunni states and Shi’ite Iran, not to mention their lack of concern about human rights violations in Saudi Arabia and other Middle Eastern countries.
To put it in other terms: policymakers in Beijing have learned the lessons of US military interventions in the Middle East and the efforts to establish and protect American hegemony there – and they don’t want to play in a similar movie.