China as Middle East Matchmaker

While the central role that China recently played in renewing diplomatic relations between Iran and Saudi Arabia underscores the United States’ declining influence in the Middle East, the longer-term implications of its matchmaking initiative are not clear. Some analysts and regional leaders, including Saudi Arabia’s foreign minister, Faisal bin Farhan Al Saud, argue that Beijing’s efforts could foster more regional peacemaking, particularly between Riyadh and its Houthi enemies in Yemen. In sharp contrast, other analysts, as well as political leaders in Israel and Washington, hold that China’s activism is eroding or even wrecking the new regional security architecture provided by the US-brokered Abraham Accords, but without providing an adequate alternative. For its part, the Biden administration has cautiously welcomed the renewal of Saudi-Iranian relations, but behind the scenes, its foreign policy team is clearly worried.

What these responses miss are the contending forces at play in the Middle East, which, in whole or in part, could present opportunities and/or headaches for all the key players, including China. Tactically speaking, China’s matchmaking is surely a major success. Beijing has displayed its rising clout, partly rooted in the huge advantage it gets from its relations with all the key regional players, including Israel. But strategically speaking, China’s action speaks to a major—and perhaps growing—fault line in its global stance. On the one hand, it has expanded its military influence, not only in the Asia-Pacific region—where it has made great strides—but around the globe as well. Here, the key impetus is to push back against US “hegemony,” or what Chinese President Xi Jinping calls Washington’s policy of “containment, encirclement and suppression.” On the other hand, although it has run into headwinds, China still remains a global economic player whose domestic and international investments require peacemaking in conflict zones (such as the Gulf), not to mention diplomatic engagement with all powers, including the United States. China’s response to Russia’s invasion of Ukraine has underscored these frictions. Yet in different ways, these tensions are also at play in the Middle East. A smart response to China’s activism must therefore consider the multiple logics and interests animating Beijing’s diplomacy.

China, Israel, and the World

China’s role in securing a renewal of Iranian-Saudi ties has sparked a very public spat in Israel, with top leaders of both the current and previous governments trading accusations as to who “lost” Saudi Arabia. Still, it is worth noting that as early as 2014, Israeli Prime Minister Benjamin Netanyahu was a major advocate of expanding Israel-China ties. Echoing the pragmatism of other Middle East states, he and other leaders across the political spectrum argued that a more robust relationship with China would widen Israel’s room for diplomatic maneuver while providing significant inflows of foreign capital to its globalized technology hub. The trick was how to secure China’s support for, and even partnership with, the so-called “Startup Nation” without alarming the United States.

Israel and China began expanding their partnership in 2017, a development that was made more notable with the inauguration of a $1.7 billion transportation and industrial center in Haifa.

If alarm bells were not initially rung, this was because most western leaders still clung to the assumption that China’s expanding middle class and business sectors would anchor the country in the international economic order in ways that would constrain Beijing’s strategic and military ambitions. China’s investments in Israel seemed to confirm such expectations. Israel and China began expanding their partnership in 2017, a development that was made more notable in September 2021 with the inauguration of a $1.7 billion transportation and industrial center in the Port of Haifa that is operated by Shanghai International Port Group. Israel’s then minister of transport declared that the new port would strengthen Israel’s maritime trade, “not only for local prosperity, but for the realization of opportunities and a genuine contribution to our neighbors in the Middle East.” Chinese investment funds have flowed into a range of projects in Israel, with trade between the two countries having more than doubled from $10.9 billion in 2014 to nearly $23 billion in 2021. Using its growing presence in the Israeli media, China’s foreign policy officials have written articles and op-eds, including one written by Beijing’s ambassador to the UK titled, “China does not aspire to World Hegemony.”

Beyond trying to influence Israeli public opinion, articles like this are designed to deflect pressure from Washington, where concerns about China’s galloping military power have been growing in tandem with President Xi’s increasingly aggressive language. In March 2019, then Secretary of State Mike Pompeo called upon Israel to reassess its relationship with China and warned that absent such an effort the US might even reduce its intelligence sharing. The Biden administration has repeatedly delivered similar, if less abrasive signals, thus prompting Israel and the United States to initiate a high level dialogue on China’s role in Israel’s technology centers.

China Walks a Thorny Path

While sparking a wider debate in Israel regarding relations with China, these developments have not dissuaded Beijing from strengthening its ties to both Gulf Arab countries and Iran in ways that are calculated to deflect US influence. If President Xi’s December 2022 visit to Saudi Arabia underscored this agenda, China’s role in renewing Saudi-Iran relations signaled a level of success that has alarmed both Israeli and American leaders. Still, with an ailing economy and growing behind-the-scenes pressures from China’s business community to limit the interference of the Communist Party and the military in the country’s private sector, Beijing has no interest in taking steps that might undercut its still vibrant global (and globalizing) role in advancing its massive Belt and Road Initiative, be it in Israel or in other countries.

It will not be easy for China to walk this thorny path, especially given the concern in Israel that Beijing’s matchmaking is threatening a newly crafted regional security order that, under the umbrella of the Abraham Accords, has presumably joined Israel and key Gulf Arab states together in a shared bid to contain Iran. To reassure Israel (and the US and its Gulf Arab allies), Beijing must show that Saudi-Iranian normalization will induce Tehran to back away from a range of policies, the most important of which is an expanded uranium enrichment program that, according to recent reports, has reached 84 percent purity.

Beijing must show that Saudi-Iranian normalization will induce Tehran to back away its expanded uranium enrichment program.

But it is not obvious that China can exercise this kind of influence over Iran’s hardline government; nor that progress in other arenas, such as the Yemen conflict, would prevent the kind of wider military conflict between Israel and Iran, and/or the US and Iran, that could erupt if the US relies on a “containment” policy that does not include an effective diplomatic strategy for addressing Iran’s nuclear program. Thus, even though China’s matchmaking has displayed its capacity to dent “US hegemony,” Beijing might be inadvertently inviting a wider regional conflict that, apart from its human costs, could jeopardize China’s vital economic interests in both Israel and the Arabian/Persian Gulf itself.

China and Israel’s Nemesis

The revival of Saudi-Iranian ties comes at a crucial moment for Iran. With its economy suffering under international sanctions, its leaders are looking to the country that brokered this agreement for economic support. Indeed, some three weeks prior to the announcement of the renewal of diplomatic ties with Saudi Arabia, Iranian President Ebrahim Raisi visited China, in what was the first such state visit by an Iranian president in two decades. Just before leaving for Beijing, Raisi asserted, “Unfortunately, we have seriously fallen behind in these relations.” Tehran’s unhappiness with Beijing extends far beyond the fact that over the last year China has looked to Russia rather than Iran—its traditional supplier—to purchase oil at significant discount, surely irritating Iran (and Venezuela as well). For China, this was apparently a small price to pay for the benefit it has received from propping up Russia’s economy while at the same time avoiding taking the far more drastic step of selling arms to Moscow.

But the deeper and far more long-term problem is that the transactional relationship between Beijing and Tehran is infused with suspicion. The much-heralded 25-year “China-Iran Strategic Partnership” that was signed in March 2021 set out an ambitious set of goals; but a year and a half later, the document remains largely a blueprint for programs yet to be realized. What is more, both reformists and some Iranian hardliners voiced concerns about the agreement from the very start, thus underscoring the enduring concern of Iranian elites that in its efforts to limit US influence, Tehran should still avoid falling into the lap of another superpower. But if Raisi’s February 2023 visit to China was meant to mitigate these worries, beyond making pledges of solidarity, little has been divulged in terms of concrete results or agreements.

China’s ability to leverage the renewal of Iranian-Saudi relations to push both sides (and Iran in particular) to build on this agreement will be severely tested.

Given this recent history, China’s ability to leverage the renewal of Iranian-Saudi relations to push both sides (and Iran in particular) to build on this agreement will be severely tested. The joint statement issued by Riyadh, Tehran, and Beijing on the new agreement hinted at the challenges to come. While declaring their desire to develop “good neighborly relations,” the statement also reiterated the three countries’ “respect for the sovereignty of states and the non-interference in internal affairs of states,” likely signaling Saudi Arabia’s concerns about the role of Iran-backed non-state actors such as Yemen’s Houthi forces, which have repeatedly used drones to attack Saudi oil facilities, with the last such assault having taken place in March 2022. Saudi leaders simply do not trust any promises from Iran to suspend its military support of the Houthis, much less to push them to make real concessions at the negotiating table. For their part, Iranian leaders have not forgotten the key role that Saudi Arabia played in supporting jihadist forces in both Iraq and Syria, thus helping to feed a wider sectarian conflict. A renewal of Saudi-Iranian relations will provide a useful but very insufficient condition for transcending the legacy of this conflict and animosity, much less for producing the kind of trust and guarantees that will be required for securing a viable and sustained agreement between Saudi Arabia and Houthi forces.

Having served as a diplomatic midwife, China will now be under considerable pressure to use its presumed diplomatic and economic leverage to push all the key players toward an agreement. It tried to lay the groundwork for such an effort back in March 2021, when then Chinese Foreign Minister Wang Yi set out a five-point initiative for Middle East security and peace. China’s UN ambassador subsequently praised Saudi Arabia’s ongoing efforts to push for a diplomatic solution, while President Xi Jinping himself held a meeting in December 2022 with Chair of Yemen’s Presidential Leadership Council Rashad al-Alimi, during which Xi pledged aid for Yemen’s reconstruction. China may be somewhat far better positioned now to push the parties to Yemen’s ongoing conflict toward peace, but it could risk its own diplomatic capital by offering to arbitrate a peace—or even a cease-fire—that has thus far proven elusive.

Getting Iran to play ball will be especially hard, not only because of the history of distrust between all the key players, but also because Iran will surely demand a very high price for agreeing to get its Houthi allies to make concessions.

Getting Iran to play ball will be especially hard, not only because of the history of distrust between all the key players, but also because Iran will surely demand a very high price for agreeing to get its Houthi allies to make concessions. This could include China’s readiness to back Tehran’s position in the United Nations regarding expanding its uranium enrichment program, which for Beijing could be a very dangerous position if it precludes a diplomatic solution to Iran’s nuclear program. Moreover, there is no guarantee that Houthi leaders will follow through on any commitment they make to Iran; and they might instead depend on Iranian hardliners in the Islamic Revolutionary Guard Corps to sabotage any deal. Either scenario would leave China walking through a diplomatic minefield that could explode at any moment, sending tremors far and wide. Indeed, with a new ultra-hardline government in Israel and the prospects for a third Intifada looming on the horizon, China’s diplomatic efforts in the Gulf arena may ultimately prove irrelevant to deeper and far more dangerous conflicts that could set the entire region ablaze.

China’s New “Steel Wall”

In a closing speech before the National People’s Congress—which not surprisingly handed him an unprecedented third term—Xi pledged to defend his country’s military and economic interests abroad by turning China’s military into a “great wall of steel.” But his growing ambition to counter US influence has only accentuated the tension between China’s desire to act as the world’s leading “anti-hegemonic” force and its wider global economic and financial interests. These contradictions are glaring in the case of Russia’s invasion of Ukraine, and are also manifest in Middle East diplomacy. In both regions, China’s leaders are taking risks that they may one day regret.

Some have argued that the Biden administration has fanned the flames by exaggerating the nature of the “global Chinese threat” in ways that have created a kind of self-fulfilling prophecy. Whether China is indeed the “most serious long-term challenge to the international order,” as Secretary of State Antony Blinken has claimed, is a debatable proposition. But what does seem clear is that a new US-China cold war will make it harder to resolve regional conflicts in ways that could undermine the vital interests of both countries. In the Middle East, Beijing is shaping a diplomacy based on the assumption that it can counter US power rather than find ways to engage with Washington or to repair what could be a growing breach with Israel. President Xi should thus be careful what he wishes for.

The views expressed in this publication are the author’s own and do not necessarily reflect the position of Arab Center Washington DC, its staff, or its Board of Directors.

Featured image credit: Chinese Foreign Ministry