Thursday, June 20, 2024

Growing Chinese Influence Over MENA Countries

Washington, DC – Going by Chinese overtures toward the Middle East and North Africa (MENA) countries in recent years, the region seems to be becoming the latest fixation for China. These include many high-profile visits and signing agreements with several of these countries during 2022. The endeavors make it clear that the region has become the next focus for Chinese ambitions.

This year has witnessed a flurry of diplomatic activities, which started with the visit of the foreign ministers of Bahrain, Kuwait, Oman, and Saudi Arabia to Beijing in January. It was followed by a visit to China by the Foreign Minister of financially strained Turkey, who allegedly pledged to prevent Uighur militants from setting up cells in his country. Notably, China has deepened engagement with many important countries in the region by signing strategic cooperation agreements, as with Algeria, Egypt, Iran, Saudi Arabia, and the UAE.

Chinese intent to strengthen ties with MENA countries was further emphasized by the unprecedented presence of Foreign Minister Wang Yi at the 48th session of Foreign Ministers of the Organization of Islamic Cooperation in Islamabad in March 2022. Wang’s attendance as a “special guest” of host country Pakistan highlighted the importance China accords to OIC members. Many of these countries are either part of the Belt and Road Initiative (BRI) or intend to join it. Significantly, the gathering skipped a reference to the Uighur issue in the 70-point “Islamabad Declaration” despite a significant focus on Islamophobia. Overall, China has roped over 20 Arab countries into the BRI, its multi-trillion dollar project to transport and sell its goods in the European and African markets. 

In recent years, China has emerged as the main source of foreign investment in the Middle East countries. Beijing is engaging most actively with Saudi Arabia amidst reports of a possible visit of Xi Jinping to the Kingdom later this year. Saudi firm M/s Aramco Asia has entered into an agreement with China Petroleum and Chemical Corporation for potential downstream collaboration. In the defense sector, Chinese firms displayed their weapons at the ‘World Defense Show’ held in Riyadh in March 2022. In the same month, Saudi Advanced Communications and Electronics Systems Company signed (March 5) an agreement with China Electronics Technology Group Corporation to build military drones in Saudi Arabia. Further, a Chinese firm, Avic International, is believed to be collaborating with Riyadh on the development of drone technology. While Washington has distanced itself from Saudi Arabia over human rights issues, Beijing has maintained a studied silence on these matters.

China is also aiming to strengthen trade and investment ties with the UAE. Over the last few years, the Emirates has been building and upgrading port infrastructure for the BRI, with Abu Dhabi Ports and Dubai DP World cooperating with major Chinese companies. Dubai Chamber of Commerce and the China Council for Promotion of International Trade (CCPIT) jointly organized an event in Dubai in January 2022 displaying high-tech products of Shenzhen-based companies. Etihad Airways of UAE had also agreed in 2021 to create an ‘Air Silk Road’ for air cargo services. 

Chinese influence continues to grow in Iraq, where Beijing invested around $10.5 billion in BRI-related energy projects in 2021. Iraq is the third-largest oil supplier to China after Saudi Arabia and Russia. Chinese Oil and Gas Company SINOPEC signed a 25-year contract in January 2022 with the Iraqi Ministry of Oil to develop Iraq’s second largest gas field. The project aims to generate 1000 MW of electricity in Iraq. According to the Iraqi Foreign Ministry, the two countries are also working for cooperation and joint coordination at the UN and other international organizations.

Beijing is also making its presence felt in Oman, Qatar, and Algeria. Oman is keen to develop its space program with the assistance of China’s Shenzhou Training Centre. Qatari Foreign Minister Mohammed bin Abdulrahman Al Thani also met Wang Yi on the sidelines of the “Neighbouring Countries of Afghanistan Plus Afghanistan” Foreign Ministers’ Dialogue in March 2022. Promising that Doha would continue to facilitate Chinese investment in the country, Thani expressed support for FTA between China and GCC bloc. Algerian Foreign Minister Ramtane Lamamra met Wang Yi during a visit to China and affirmed Algeria’s willingness to sign agreements on the BRI cooperation with China. Furthermore, China is involved in the reconstruction of Syria, which is in line to join the BRI, for which it signed an agreement in January 2022.  

In Africa, Morocco has emerged as an important destination for Chinese investments, with more than 80 projects across the country. It was the first North African country to sign the BRI cooperation plan. Morocco also signed the ‘Joint Belt and Road Implementation Plan’ in January 2022. 

China is increasing collaboration with Israel with an eye on augmenting its Artificial Intelligence (AI) capability. The two countries held the 5th round of the ‘Joint Committee on Innovation Cooperation’ meeting in January 2022. China has also invested heavily in Israeli infrastructure projects, including the Tel Aviv light rail system and the country’s main ports. The state-owned China Harbor Engineering Company won a tender in 2014 to construct a private terminal in Ashdod. Similarly, in 2015, the Shanghai International Port Group won the rights to operate a new port terminal in Haifa Bay for 25 years. 

The last few years have witnessed China’s initial moves to cover the MENA region through its investment blanket. The next few years will be crucial to determine the pace and extent of these countries getting into the Chinese fold. Though the financially sound countries in the region should not be under immediate threat of Chinese dominance, Beijing’s well-known policy of gradually laying the debt trap may lead to long-term consequences, as in Sri Lanka. The policy has to go through the usual cycle of a rise in debt to turn the same into equity and eventually make the target economy heavily dependent on China. However, nations currently facing financial crises are likely to get encircled much earlier. Such countries (mainly in Africa), who find the incoming investment to be an easy way out of their present problems, may turn into Chinese economic colonies sooner than later.  

 

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