LILY HINDY
WHAT YOU SHOULD KNOW
China has historically played a minimal diplomatic and security role in the Middle East, and as a rising power today Beijing maintains the unique position of friend to all nations in the region and enemy to none.
China is now the largest importer of oil from the Middle East, and the largest exporter of goods to the region.
Construction is underway on China’s first overseas military base, strategically located in the tiny African nation of Djibouti on the Gulf of Aden just twenty miles across from the coast of Yemen.
The United States is the largest weapons supplier in the Middle East by far, but China is increasing sales of weapons the United States refuses to sell there, plans to build a drone factory in Saudi Arabia, and (along with Russia) provides arms to U.S. adversaries Syria and Iran.
China has stepped up joint counterterrorism drills in response to what it says is a growing threat from militants and separatists particularly from its Uyghur Muslim population, members of which have fought alongside ISIS, Al Qaeda, and the Taliban.
In a speech before the Arab League in Cairo last January, Chinese President Xi Jinping described his view of China’s role in the Middle East: “Instead of looking for a proxy in the Middle East, we promote peace talks; instead of seeking any sphere of influence, we call on all parties to join the circle of friends for the Belt and Road Initiative; instead of attempting to fill the “vacuum,” we build a cooperative partnership network for win-win outcomes.”1
Disdaining traditional great power politics in the Middle East, President Xi presented China as a viable new alternative: a sui generis great power in the region, employing fresh tactics to solve problems its peers have not. China’s economic reach in the Middle East is burgeoning through oil imports and machinery and textile exports, and its ambitious Belt and Road Initiative, touted as the most important feature of President Xi’s foreign policy, aims to gradually rebuild the legendary Silk Road network of trade routes that ran from China through Central Asia and the Middle East into Africa and Europe.2 The country has for decades maintained a policy of “non-interference” in the Middle East, a region in which the United States remains the major outside player, and today Beijing holds the unique position of friend to all Middle Eastern leaders and enemy to none.
But recent moves may signal a shift toward greater Chinese diplomatic and security engagement in the area. In 2016 alone, China began construction on its first foreign military base just off the tip of Yemen in Djibouti, publicly released its first “Arab Policy Paper,” and appointed a special envoy to the Syria crisis. It currently ranks fifteenth in a list of weapons suppliers to the region, but it is increasing sales and just signed an agreement to start manufacturing Chinese drones in Saudi Arabia—only the third such factory outside of China and the first in the Middle East. Ahead of a visit by Saudi Arabia’s King Salman to China on March 16, China’s foreign minister suggested that Beijing would venture so far in the diplomatic realm as to play the role of mediator in talks between Saudi Arabia and Iran, regional rivals with whom China has strong ties.3
Recent moves may signal a shift toward greater Chinese diplomatic and security engagement in the Middle East.
This report looks at China’s policies and commitments in the Middle East, including its regional alliances, role in regional conflicts, and trade relationships. It collates research on arms transfers to the Middle East and Chinese imports and foreign direct investment in the region. It also examines Beijing’s troubled relationship with its Muslim population at home, which is often cited as a complicating factor in diplomatic relations with the Middle East. Finally, it provides information on China’s overall military spending and international footprint, which sheds light on current and future involvement in the Middle East. It concludes with recommendations of issues to watch as China explores new engagements in the region.
China has historically played a minimal security and diplomatic role in the Middle East, but recent discussions in the Chinese foreign policy community reflect increasing interest in looking west. A widely publicized 2012 article by Wang Jisi, a prominent and highly respected Chinese political scientist, articulated a new strategy: “While the U.S. pivots east, and Europe, India, and Russia also eye the east, China should have a strategic plan of ‘Marching West.’”10 The article was the first of many on the same topic, with Chinese analysts and scholars reevaluating Beijing’s grand strategy, from a primary focus looking east toward a more balanced approach in both directions. The shift toward Central Asia and the Middle East may be in part an attempt to check and balance western actions in the far east. Indeed, just as the United States views China as a revisionist power, U.S. moves to strengthen allianceswith Australia, Japan, and the Philippines, as well as to court new partners in Malaysia, Singapore, and Vietnam, have unnerved China.11
Beijing publicly released its first “Arab Policy Paper” in January 2016 “to promote China-Arab relations to a new and higher level.”12 The paper states an intention to increase military cooperation and exchange with Arab countries, including personnel, weapons and technologies, and declares China’s desire to increase cooperation to “jointly address the threat of international and regional terrorism,” including intelligence sharing. It also reinforces China’s commitment to anti-piracy operations and says that it will continue to send warships to the Gulf of Aden and Somali waters. China has cited its extensive anti-piracy operations in the Gulf of Aden as one of the main reasons behind its decision to build its first overseas naval base in Djibouti.13
China’s “One Belt One Road” Project (OBOR; also known as the “Belt and Road Initiative”) is an ambitious plan to rebuild the old network of trade routes that ran westward from China through Central Asia and the Middle East into Africa and Europe, known as the Silk Road. Beijing launched OBOR in 2014 with $40 billion in investment, and it has been largely focused on developing infrastructure and gas and oil pipelines throughout Central Asia.14As part of the project,15 in 2015 China took control of Pakistan’s strategically located Gwadar port, giving the Chinese access to the Strait of Hormuz (through which 20 percent of the world’s crude oil is transported) and the Arabian Gulf.16 OBOR is now beginning to show its reach into the Middle East as well with important connectivity points in Iran, Egypt, and Israel.THE CHINESE MILITARY PARTICIPATES IN A MULTINATIONAL JOINT MARITIME BLOCKADE DRILL ON FEBRUARY 13, 2017, IN WATERS OFF KARACHI, PAKISTAN. SOURCE: CHINA MILITARY.

Regional Relationships
As the world’s top oil importer, China has tight relations with top oil exporter Saudi Arabia. Saudi oil exports to China have grown exponentially over the past two decades to satisfy China’s increasing demand, and Saudi Arabia had been China’s top source of imported crude oil since 2002 until Russia outpaced it for the first time last year (Saudi Arabia remained a close second).25 Reports surfaced during King Salman’s trip to Beijing in March that China may become the principal investor in the planned initial public offering (IPO) of state-owned oil company Saudi Aramco.26 There is historic weight to this news for the United States, seen by many27 (including its current president) as a superpower in decline—while all the while, China is rising.28 “Aramco” is derived from the original “Arabian-American Oil Company,” named when the company was founded in 1933 as a joint venture with the old American oil tycoons.29 The Americans took home most of the profits until Saudi Arabia gradually nationalized the company throughout the 1970s, taking full control in 1980. Deputy Crown Prince Mohammed bin Salman, who is leading an economic reform program30 that aims to reduce the kingdom’s reliance on oil, has said the IPO will value Aramco at a minimum of $2 trillion.31 If confirmed, that would make Aramco by far the highest valued company in the world. The IPO would sell up to 5 percent of it.32
Saudi Arabia has also long relied on China for weapons sales, a business relationship that has grown over time. Riyadh began purchasing Chinese intermediate range ballistic missiles (IRBMs) in the 1980s—weapons its number one arms supplier, the United States, was unwilling to provide because of opposition from Israel. Today, China continues to supply Saudi Arabia with weapons it cannot buy from the United States, including drones that can carry cameras and missiles.33 At a ceremony this January, Saudi Arabia unveiled one of its Chinese CH-4 drones armed with at least two Chinese-made missiles,34 confirming press reports that China had indeed armed the drones it sold to Saudi Arabia (imagery of the drones on display carrying missiles was analyzed for TCF by Senior Researcher Pieter Wezeman at the Stockholm International Peace Institute (SIPRI)).35 China recently boasted that its new Wing-Loong II armed drone had secured the biggest overseas purchase order in the history of Chinese UAV sales,36 although the quantity and recipient were not disclosed (an unconfirmed report37 suggested it was Saudi Arabia with a purchase of 300 drones).
China is also Egypt’s largest trading partner, with bilateral trade in 2014reaching $11.6 billion, and a large trade imbalance favoring Beijing.50 As part of the bilateral support Egypt recently needed to secure a $12 billion IMF loan, the two countries signed a currency swap deal for $2.6 billion in December 2016.51 This was the first time the yuan was showcased as a reserve currency; it joined the U.S. dollar, euro, yen, and British pound in the IMF’s officially recognized basket of reserve currencies just a month earlier. China is a big investor in the Suez Canal and, until recently, a plan to build a new Egyptian capital city east of Cairo.52 The China State Construction Engineering Corporation pulled out of the deal in February after price disagreements.53
Role in Regional Conflicts
China’s “Five Principles of Peaceful Coexistence,” first put forth by Prime Minister Zhou Enlai in 1953 in a meeting with the Indian government, continue to form the official basis of China’s foreign policy and help to explain their approach to conflicts in the Middle East.54 The principles are: mutual respect for sovereignty and territorial integrity, mutual non-aggression, mutual non-interference in each other’s internal affairs, equality and mutual benefit, and peaceful co-existence.
China has also consistently supported the Yemeni government of President Abd-Rabbu Mansour Hadi in its ongoing war against the Houthis, citing non-intervention and respect for sovereignty. Efforts to gain support by a Houthi delegation that visited Beijing late last year were rebuffed. China’s official news agency Xinhua stated that “China’s concern over the Houthi-GPC government and reiteration of its support to the internationally recognized government signaled its intention to play a greater role in bringing peace back to [Yemen].”68 This has seemingly created tension with Iran, which expresses strong public support for the Houthis and has likely provided them with some weapons and training. In April 2015, Chinese naval forces engaged in anti-piracy patrolling missions in the Gulf of Aden were diverted to evacuate almost 600 Chinese citizens and 225 foreign nationals from Yemen amid fierce fighting. A government spokesperson said it was the first time China had helped to evacuate non-Chinese citizens from a conflict zone (including citizens of Pakistan, Ethiopia, Singapore, the UK, Italy, and Germany)—and only the second time it had evacuated its own (more on the first time, in Libya, below).69
On the region’s most incendiary conflict, China has managed to carve a neutral place for itself and has offered help with negotiations multiple times. China was one of the first countries to recognize Palestine, in 1988. It did not establish official diplomatic relations with Israel until 1992, mainly for fear of harming its close relationship with Arab countries.75 The relationship between China and Israel is largely based on extensive economic interdependence, but China continues to tread carefully in its public support of Israel because of its relationships throughout the Arab world.76 During a visit by Israeli Prime Minister Benjamin Netanyahu to Beijing on March 21 this year, President Xi told Netanyahu that peace with the Palestinians would be good for both sides, adding that China “appreciates Israel’s continuing to take the ‘two state proposal’ as the basis for handling the Israel-Palestine issue.”77 Beijing has advocated for a two-state solution with East Jerusalem as the capital of Palestine, a position it reiterated in the 2016 “Arab Policy Paper,” along with its support of a two-state solution in Israel/Palestine based on the pre-1967 borders. In 2013, Palestinian President Mahmoud Abbas and Netanyahu visited China in quick succession, though they did not overlap, and President Xi presented a four-point plan to bring the conflict to an end.78 In 2014, China produced a five-point plan.79 Neither have moved forward.
Difficulties with a Muslim Population at Home
China’s difficult relationship with the Muslim population inside its borders is often cited as a complicating factor in moves to expand Chinese influence in the Middle East, although few Middle Eastern leaders have spoken publicly about China’s difficulties. Most attention is focused on the Xinjiang autonomous ethnic region, which is populated by around 11 million Muslims from the Uyghur ethnicity. The oil-rich region is strategically located on China’s far-west border at the gateway to Central Asia and thus pivotal for the OBOR project.80 The Uyghur movement to secede from China is based on the fact that Uyghurs are not Chinese but Turks from Central Asia (Uyghur nationalists refer to their region as “East Turkestan”).81 The region only really fell under Chinese control in 1949 when the People’s Liberation Army defeated Uyghur and Kazakh “rebels” and introduced the majority Han ethnic group to the area.82 Today, Han-Uyghur relations are contentious and the government restricts many forms of Uyghur cultural and religious identification.83 Unsanctioned traditional male gatherings are forbidden, fasting for Ramadan is discouraged and even prevented in some cases, and the language is frowned upon. Uyghurs are discriminated against by employers and hotels in Central and Eastern China rarely accept them as guests. The Chinese government says it is concerned that the region is under the influence of the “three evil forces”: terrorism, religious extremism, and separatism. Sporadic ethnic violence erupts both within and outside of the region.84
Military Spending & International Footprint
A look at China’s overall military spending and international footprint helps to contextualize its actions in the Middle East. China’s military budget in 2016 was $145 billion, second only to the United States (which dwarfed all other countries with a budget of $600 billion).93 Despite an economic slowdown, China remains committed to developing and modernizing its defense capabilities.94 The People’s Liberation Army (PLA) has stepped up military exercises with Russia as part of an overall increase in defense cooperation between the two countries.95 China is also engaging in more joint counterterrorism drills in Central Asia.
China is building its first foreign base in the tiny African nation of Djibouti, strategically located in the Horn of Africa just twenty miles across from Yemen’s coast. Beijing, which has a longstanding policy of no foreign military bases,96 calls it a “logistics facility” and says it is set to install “a few thousand” troops97 there but is pledging not to engage in military expansion.98 The Chinese government also says the base will mainly serve as a rest and relaxation post for the upwards of 2,400 Chinese troops helping with anti-piracy, U.N. peacekeeping and humanitarian rescue missions in the area.99The Chinese People’s Liberation Army Navy (PLAN) has been conducting anti-piracy operations in the Gulf of Aden and off the Horn of Africa since December 2008, along with ships from several other nations.100 More than a fifth of Chinese-owned, -cargoed, or -crewed ships faced piracy while transiting Somali waters, and seven were attacked. Although the piracy threat has faded since 2012, China has not reduced its involvement.
Nearly one-third of the world’s shipping, including most of China’s $1 billion in daily exports and half of its oil imports, passes by Djibouti’s coast through the Bab-el-Mandeb on the way to the Suez Canal. The United States, Japan, Italy, and France all have bases there as well, and Saudi Arabia announced its intentions to build soon after China. The United States’ Camp Lemonnier is a vital part of AFRICOM, housing some 4,000 military and civilian personnel and serving as a drone launching pad for drone attacks on Al-Shabab in Somalia, Boko Haram in Nigeria, and Yemeni-based Al-Qaeda in the Arabian Peninsula.101
China has assigned more peacekeepers to Africa than any other permanent member of the UN Security Council, with more than 2,600 troops, police and experts participating in seven of the nine UN missions on the continent.
China has assigned more peacekeepers to Africa than any other permanent member of the UN Security Council, with more than 2,600 troops, police and experts participating in seven of the nine UN missions on the continent.102 In 2015, President Xi announced a series of measures to increase China’s participation in the missions in Africa.103 This included a pledge to set up a permanent peacekeeping police squad, build a standby force of 8,000 troops, increase Chinese training of foreign peacekeepers, carry out ten minesweeping assistance programs over the next five years, and deploy its first helicopter detachment.LU HUIYING, THE CHINESE AMBASSADOR TO MALI, PRESENTS THE UNITED NATIONS PEACE MEDAL OF HONOR TO PEACEKEEPERS FROM THE 4TH CHINESE PEACEKEEPING ENGINEERING DETACHMENT TO MALI ON FEB. 2, 2017. SOURCE: CHINA MILITARY.
China currently ranks fifteenth on a list of arms suppliers to the Middle East, but retired Lieutenant Colonel James Dickey, of defense and security intelligence firm IHS Jane’s, said that he expects them to move up in coming years. “The Chinese have been making a concerted effort to make inroads into the Middle East arms sales market,” Dickey said in a phone interview.104According to a report by the Stockholm International Peace Research Institute (SIPRI), China’s exports of major arms nearly doubled over the past five years.105 The majority go to states in Asia and Oceania, with Pakistan the main recipient followed by Bangladesh and Myanmar (sales to the Middle East make up less than 2 percent of total sales). In the same period, China’s arms imports decreased by 25 percent, signifying that it is increasingly capable of producing its own advanced weapons. In the early 2000s, China was by far the largest importer.
A Boon for the Middle East
China’s “pivot west” may not materialize entirely as some analysts have predicted, but it is clear today that the rising power’s economic bounty is seen as a boon by many in the Middle East. It may be criticized for its mercantilist policies, but it has proven more willing to participate in economic initiatives in the region, such as in Egypt, and it has shown greater interest in doing so in the future in countries currently racked by war, like Syria.106 It also provided a market for Iran while U.S. and European sanctions were in place, and continues to be its largest trading partner. On the other end of the regional spectrum wealth-wise, China’s already robust economic interdependence with oil giant Saudi Arabia appears to be on the rise, as are its relations with other Gulf nations.107 Many more opportunities for investment are likely in the region, particularly if the ambitious plans for OBOR begin to be translated into reality.
On the military front, U.S. policymakers are likely keeping an eye on China’s increasing weapons sales to the region, and their latest decision to open a drone factory in Saudi Arabia. U.S. arms sales to the region far exceed those of China, but while the United States has only sold its armed drones to the U.K. and Italy, China has supplied them (both armed and unarmed) to Saudi Arabia, Iraq, the United Arab Emirates, and Egypt.108 China is also filling the gaps for countries who cannot purchase arms from the United States—it is in the top three suppliers, behind Russia in each case, to Iran, Syria, and Algeria. China’s promise to step up military cooperation with Russia in Syria should be watched. On the other hand, the United States and China may eventually cooperate militarily on counterterrorism campaigns in the region. Even before the recent ISIS video that showcased Uyghurs vowing to retaliate against their oppressors in China, Beijing had stepped up joint counterterrorism operations in its Western provinces and in Central Asia. It recently staged its first such operations with Saudi Arabia,109 and claimed that it was doing the same in Afghanistan110 last month after reports surfaced that Chinese troops had been spotted in the country.CHINESE HIGH-SPEED RAIL PRODUCTS ON DISPLAY AT THE CHINA-ARAB STATES EXPO 2015 IN YINCHUAN, THE CAPITAL OF THE NINGXIA HUI AUTONOMOUS REGION. SOURCE: XINHUA/WANG PENG.

Finally, as China’s economic and military engagement grows with countries throughout the region, it could soon gain the standing and desire to try its hand diplomatically. A new arbiter is likely to be welcomed in some of the region’s conflicts. So far, the only test was its role in the P5+1 negotiations that led to the Iran nuclear deal, for which it was widely praised but hardly the driving force. China’s good relations with both Israeli and Palestinian leaders may eventually leave Beijing in a position to play a negotiating role in one of the region’s most intractable conflicts. And China is also well-placed, and apparently interested, in mediating the simmering rivalry between two of its closest allies in the region, Iran and Saudi Arabia.
If the experiences of past superpowers are any predictor, China will have a difficult time maintaining a neutral position in the Middle East while stepping up its diplomatic and security engagement there.
If the experiences of past superpowers are any predictor, China will have a difficult time maintaining a neutral position in the Middle East while stepping up its diplomatic and security engagement there. But President Xi’s stated intention is to distinguish China from others, so perhaps measuring Chinese actions in the region through the lens of the U.S. experience, or that of Russia during the Cold War, or the U.K. or France during colonial times, is misleading. As of now Chinese involvement is nowhere near such levels or ambitions and it remains to be seen whether it will evolve in that direction. A more realistic predictor of what is to come in the Middle East may be China’s relentless economic and development activities in Africa and Latin America—which have been heavily criticized in each case as exploitative, even a “new form of colonialism,” but continue apace nonetheless.111 The Chinese have dramatically changed landscapes in many African and Latin American countries112 through investment that benefits their own economy, primarily,113but has also created local jobs and improved infrastructure. They have acknowledged “growing pains” in their relationships with African countries and tried to reassure them that they were not following in the footsteps of “Western colonists.”114 In a region similarly sensitive to the vestiges of colonialism and Western meddling, it will be interesting to see how China’s increasing role is received.
Notes
Shannon Tiezzi, “The Belt and Road and Suez Canal: China-Egypt Relations Under Xi Jinping,” China Policy Institute, School of Politics and International Relations, University of Nottingham, February 16, 2016, https://cpianalysis.org/2016/02/16/87681/.
Peter Wezeman, email to the author, March 14, 2017.
Binnie, “Saudi Arabia to build Chinese UAVs.”
Motevalli, “China, Iran Agree to Expand Trade to $600 Billion in a Decade.”
“Security Council Fails to Adopt Two Draft Resolutions on Syria, Despite Appeals for Action Preventing Impending Humanitarian Catastrophe in Aleppo,” United Nations Security Council, October 8, 2016, https://www.un.org/press/en/2016/sc12545.doc.htm.
Ibid.
Palmer, “The Uighurs, China’s Embattled Muslim Minority, Are Still Seeking an Identity.”
International Institute for Strategic Studies, The Military Balance 2017 (London: Routledge, 2017), 19.
Ibid, 278.
Jacobs and Perlez, “U.S. Wary of Its New Neighbor in Djibouti: A Chinese Naval Base.”
Braude and Jiang, “Djibouti is Jumping.”
Shinn, “Africa: China’s Laboratory for Third World Security Cooperation.”
LTC (Ret.) James Dickey, phone interview with the author, March 27, 2017.
Aude Fleurant, Sam Perlo-Freeman, Pieter D. Wezeman and Siemon T. Wezeman, “Trends in International Arms Transfers, 2015,” Stockholm International Peace Research Institute, February 2016, http://books.sipri.org/files/FS/SIPRIFS1602.pdf.
“China and Saudi Arabia hold joint anti-terrorism drills,” The New Arab.
Lily Hindy is a foreign policy associate at The Century Foundation, focusing on the Middle East. Lily has a Master's in International Affairs from Columbia University's School of International and Public Affairs (SIPA) and a Bachelor's in Government from Smith College.
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