China’s Middle Eastern Moment

In an interview, Abdullah Baabood discusses Beijing’s evolving role in the Gulf region, where its priority is stability.

Abdullah Baabood is a nonresident scholar at the Malcolm H. Kerr Carnegie Middle East Center. He holds the chair of the state of Qatar for Islamic area studies and is a visiting professor at the Faculty of International Research and Education at Waseda University in Tokyo. Recently, he wrote an article for Carnegie titled, “Why China Is Emerging as a Main Promoter of Stability in the Strait of Hormuz.” Diwan interviewed Baabood in late May to discuss his article, and more broadly to get his perspective on China’s changing role in the Middle East, particularly with regard to the Gulf countries.

MY: You recently wrote an article on China’s role in the Strait of Hormuz. What was your argument and your major conclusions?

Abdullah Baabood: I argued that due to China’s reliance on the Gulf region for a significant quantity of its oil and gas, it has a strong interest in preserving stability and security in this region, a clear example of which was its brokering of the recent Saudi-Iranian reconciliation agreement. The Gulf is an area of significant opportunity for China in its global geostrategic competition with the United States, as, unlike Washington, Beijing enjoys close bilateral relations with countries on both sides of the Strait of Hormuz. As its interests in the region have grown, China has become a principal stakeholder in the strait’s security. The Saudi-Iranian agreement only reaffirmed this, contributing to defusing strains in the Strait of Hormuz and the broader region.

The military presence of the United States and its allies in the strait has encouraged China to share the burden of security in the region to protect its commercial interests, particularly as Beijing is acutely vulnerable to disruptions in oil supplies. China’s facilitation of the Saudi-Iran agreement also demonstrates how Beijing’s expanding economic clout allows it to play a greater role in influencing regional security dynamics as well as building diplomatic bridges in areas of strategic importance, thereby protecting its commercial interests. It is longer a “free rider,” to use the terms of former U.S. president Barack Obama, acting under a U.S. and Western security umbrella.

MY: While China was the formal sponsor of the recent Saudi-Iranian reconciliation, can you tell us in practical terms what this means? How can Beijing influence implementation of the agreement, or lack thereof?

AB: China’s brokering of the agreement between Iran and Saudi Arabia is a significant breakthrough for the security outlook of the Gulf region. Although it was already evident that Iran and Saudi Arabia had been seeking to deescalate tensions, following several rounds of talks facilitated by Oman and Iraq, the restoration of diplomatic relations was not expected so soon, particularly while the conflict in Yemen remained unresolved.

China has long practiced a strategy of careful diplomatic balancing in the Middle East, maintaining good relations with all regional states. However, its sponsorship of the reconciliation agreement between Tehran and Riyadh marked a departure from this norm, with Beijing now playing more active a role in supporting a peace process between regional rivals. Having signed comprehensive strategic partnership agreements with Iran and Saudi Arabia in 2021 and 2022, repectively, as well as being the main trading partner of both countries, China is in a unique position to influence the outcome of the reconciliation agreement. It is the world’s top oil importer and the main consumer of Iranian and Saudi oil. Furthermore, the Chinese have invested heavily in major infrastructure projects in both countries.

Although the success of the reconciliation agreement will ultimately depend on the willingness of Tehran and Riyadh to make concessions, Beijing’s economic leverage could prove effective in driving forward implementation of the agreement. Saudi Arabia is undergoing a process of rapid economic reform to achieve its Vision 2030 goals, while Iran is facing worsening financial circumstances due to increasing sanctions from the United States and its allies. For both countries, the prospect of increased economic cooperation and foreign investment from China will undoubtedly make reconciliation more attractive.

MY: How does the wider Gulf region fit into China’s Belt and Road Initiative, and in what way does this threaten the U.S. role in the region?

AB: China’s interests in the Gulf have expanded beyond its energy requirements to encompass a wider range of economic activities, leading Beijing to increasingly view the region as an area of strategic importance. Growing Chinese regional investment, particularly in major infrastructural ventures such as telecommunications and logistics projects, demonstrates the significance of the wider Gulf region for China’s Belt and Road Initiative. Strategically placed at the crossroads of Africa, Asia, and Europe, the region is central to Beijing’s global ambitions as well as a key area of competition in the intensifying great-power rivalry between China and the United States. Despite the perceived U.S. military withdrawal from the Middle East, Washington is determined to prove its continuing commitment to the security of its allies in the region, where it still retains a notable military presence.

Although China’s military influence in the region is limited, Washington is concerned about the increasing participation of Chinese companies in ports and technology partnerships, including major telecommunications infrastructure projects such as the establishment of 5G networks, in which China’s Huawei has been involved. Washington has warned its allies that cooperating with such companies could risk future security cooperation with the United States. Nevertheless, despite their growing rivalry, both Beijing and Washington have an interest in the security and stability of the region, which could provide a potential area of cooperation for the two countries.

MY: You point out that the U.S. response to China’s progress in the Gulf is likely to be to push forward with the Abraham Accords and bring about a normalization of relations between Saudi Arabia and Israel. How realistic is this, and indeed might this undermine China’s strategy, given that Riyadh is unlikely to break with Beijing?

AB: Israeli Prime Minister Benjamin Netanyahu has made a normalization of relations with Saudi Arabia one of his key foreign policy goals. For the United States, the Abraham Accords represent an opportunity to advance greater cooperation between Israel and the Arab Gulf states. This would allow for deeper security cooperation between these countries, all of which regard Iran as a major regional threat. Such a scenario would benefit Washington by better safeguarding Israel’s national security vis-à-vis Iran while simultaneously strengthening the U.S.-allied axis in the region.

While it is unlikely that this would obstruct the Chinese-brokered reconciliation agreement between Saudi Arabia and Iran, it could present some obstacles to Beijing’s regional interests. Closer relations between Israel and the Arab Gulf countries could affect Beijing’s interests by politically isolating Iran from the regional security architecture. Although Saudi Arabia is determined to deescalate regional tensions with Iran, Riyadh still views Tehran as a primary adversary. An alignment of interests between Saudi Arabia and Israel, by sidelining Iran and inhibiting its economic integration into the region, could disrupt China’s ambitions to carve out its own sphere of influence in the Gulf region, weakening China’s Belt and Road Initiative.

However, Saudi Arabia reportedly has certain conditions for normalizing relations with Israel—closer U.S. defense cooperation, U.S. security guarantees, fewer restrictions on U.S. arms sales to the kingdom, and U.S. assistance to establish a civilian nuclear project—which are likely to face Congressional opposition in Washington. Moreover, intensified violence in the Israeli-Palestinian conflict since Netanyahu’s hard-right government took office last December has made a deal with Israel less palatable for Saudi Arabia and the broader Muslim world.

MY: On the security level, it appears that China cannot compete with the United States. Why does this matter, and how do you expect the Chinese to address this?

AB: Despite boasting the world’s largest military in terms of active personnel, China’s military expertise and naval and aerial capabilities lag far behind those of the United States. With its vast network of overseas bases, the power projection of the U.S. military is unrivaled, whereas China’s military base in Djibouti is its only overseas base. Furthermore, China cannot yet compete with Washington’s domination of the global arms market, accounting for 40 percent of total global arms trade between 2018 and 2022, in comparison to China’s 5.2 percent.

Nevertheless, Beijing has made notable inroads into the Middle East arms market over the past decade, including concluding major defense agreements with key U.S. allies such as Egypt and Saudi Arabia. As several Gulf Arab countries are seeking to diversify their arms suppliers and reduce their dependency on U.S. arms, China will certainly aim to increase its market share in the region’s lucrative arms market. Simultaneously, Beijing will seek to establish a network of overseas military bases, with the Middle East representing an area of key focus, as demonstrated by the controversy surrounding the alleged construction of a Chinese military base at Abu Dhabi’s Khalifa Port.

China doesn’t seem to be in a hurry to replace the United States and probably doesn’t aim to do that. However, the combination of its economic and political power and its growing security and strategic interests will lead to its further involvement in regional security. Notwithstanding great-power competition, China’s expanding security involvement in the Gulf can be beneficial for regional and global security.