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Tue 1 Mar 2011 07:39 PM

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China to stay a low-key gambler in Middle East

Beijing is reluctant to gamble its economic chips for uncertain political gains

China to stay a low-key gambler in Middle East
China will stay a restrained regional player in the Middle East, say analysts

Even with Middle Eastern tumult tearing down governments and
pushing up oil prices, China will stay a restrained regional player, reluctant
to gamble a growing pile of economic chips for uncertain political gains.

The Middle East is one part of the world where giddy talk
about China converting its mercantile strength and energy needs into diplomatic
activism runs up against ingrained Chinese caution and deep-rooted US

The weekend brought a telling signal of China's approach.

China briskly dropped its traditional caveats about
"non-interference" in other nations' domestic problems to back UN Security Council sanctions on Libyan leader Muammar Gaddafi and his closest

"China's big bet is on maintaining comity with the
United States," said John Garver, a professor at the Georgia Institute of
Technology in Atlanta who studies China's ties with the Middle East and nearby regions.

China wants to avoid messy entanglements with often rival
Middle East countries and has no appetite for turning the regional upheaval
into a point of confrontation with the United States, said Yin Gang, an expert
on the region at the Chinese Academy of Social Sciences, a government think
tank in Beijing.

"Chinese military and ideological influence doesn't
amount to anything that the West has to worry about. China shows no signs of
seeking to expand that influence in a major way," said Yin.

"China will remain focused on doing business in the
Middle East after the region settles down," he said.

China will focus on buying oil and gas, selling manufactured
goods, and sometimes acting as a diplomatic spoiler to protect energy
interests, especially against possible sanctions on Iran, and hedge against
US influence.

But it will leave guarding the shipping lanes vital for oil
to the United States.

Beijing will also want to ensure Islamic countries that have
overthrown authoritarian governments do not become more sympathetic to the
ethnic Uighur Muslim minority in China's far west Xinjiang region, the site of
bloody ethnic unrest in 2009.

China's energy stakes in the Middle East could eventually
draw it into a more assertive role there, and longer-term even a firm naval
presence, building on its forays into anti-piracy patrols in the Gulf of Aden,
say some analysts.

But that day is far off.

"Middle Eastern authoritarian regimes that survive the
upheaval -- especially Saudi Arabia -- may well look upon China as a more
reliable supporter than the US," said Garver, in emailed answers to
questions. China is already Saudi Arabia's biggest oil customer.

"But the problem is that China is simply not prepared,
materially or psychologically, to meet the security needs of those

The scale of China's commercial links across the Middle East
and north Africa is clear in the tens of thousands of Chinese workers fleeing
Libya. Chinese building, energy, and trading companies have been expanding
throughout the region, sometimes in places too low-paying or hostile for
Western companies.

Chinese trade with Libya grew to $6.6bn last year, a
rise of 27 percent on 2009 levels, according to Chinese statistics. China's
trade with Egypt grew by 19.1 percent.

In many Arab countries, China is "viewed positively in
part due to either the backlash against European colonial powers or perceived
American intervention", said Ben Simpfendorfer, managing director of China
Insider, a Hong Kong-based consultancy, who specialises on China-Middle East

Above all, there is oil. About half of China's crude imports
last year came from the Middle East and North Africa, according to Chinese
data. China wants to diversify supplies, but Arab countries and Iran hold so
much of global reserves that there will be no escaping heavy purchases from

Middle Eastern countries that have overthrown authoritarian
governments are unlikely to dwell on China's reluctance to condemn their fallen
leaders, said John Calabrese, a scholar at the Middle East Institute in

"To the extent that they need customers for their
commodities and foreign direct investment in their economies, memories of
China's position (or lack of one) in the political upheaval could prove
short," he said in emailed comments.

Some Chinese scholars, former diplomats and military
officers have urged Beijing to secure its energy stake by becoming more
assertive in the Middle East, pushing against US influence and building
firmer friendships with Arab countries.

Certainly, wariness of US intentions runs deep in China's
ruling circles, and that has surely been magnified by suspicion that Washington
backs calls for copy-cat protests against one-party rule in Chinese cities.
Police have smothered any efforts to act on those calls.

But China's diplomatic line appears more nuanced. In a
recent briefing, a senior foreign policy official steered clear of conspiracy
views for the Middle Eastern unrest, instead citing economic malaise and tardy

Some aloofness from Middle Eastern politics suits China,
which has no desire to be pulled deep into regional disputes, especially
between Israel and the Palestinians, said a Western diplomat in Beijing who
closely follows Middle Eastern affairs.

"Policy-makers would be scared to make big moves in the
Middle East and get stuck in some quagmire," he said. He spoke on
condition his name was not used. "Even if they recognise a strategic
opportunity, they don't really have the instruments."

China may find it harder to stay entirely above the messy
Middle Eastern fray as its economic interests and international profile grow.

If mishandled, Chinese exports and labour could become a
source of friction, especially with new governments striving to create more
jobs for their own young people, said Simpfendorfer.

"It has provided cheap consumer goods to the region,
but can it provide jobs? ... That will be critical going forward."

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