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Ma Xiaolin
Impetus for Peace & Development
What can China offer the Middle East?
By Ma Xiaolin | NO. 5-6 FEBRUARY 4, 2016

 

Chinese President Xi Jinping kicked-off his 2016 diplomatic schedule with state visits to Saudi Arabia, Egypt and Iran on January 19-23. It was his first trip to these countries since taking office in March 2013.

While the Middle East has witnessed continuous turbulence over the last five years, China's policy toward the region remains distinct from other major countries in the world, being constructive without interfering. Countries in the Middle East have valued China's positive role in the region.

In addition, China's initiative of building the Silk Road Economic Belt and the 21st-Century Maritime Silk Road (Belt and Road Initiative) is winning over countries in the region due to its future benefits for their own development. Personnel, cultural and trade exchanges between China and the Middle East have a long history, flourishing more than 2,000 years ago after the ancient Silk Road was opened as an important trade route between the East and West.

Economic cooperation 

As the world's largest energy consumer, China will continue to be a huge market for petroleum-exporting countries in the Middle East, the region that has the largest oil and natural gas reserves in the world. Most local economies there are heavily dependent on oil and gas resources and related industries, so maintaining a huge and stable oil-consuming market is vital to sustain revenue. Local leaders therefore appreciate that the Chinese represent a major and reliable buyer.

Meanwhile, China continues to undergo robust growth and change in regards to industrialization, urbanization and modernization. Oil and natural gas account for an increasingly high proportion of China's strong energy demand, especially until clean energy alternatives become a larger proportion of its energy mix.

Chinese Foreign Minister Wang Yi (third right) attends a foreign ministers’ meeting of the P5+1 countries (China, France, Russia, the United Kingdom, the United States, plus Germany) on the Iranian nuclear issue in Lausanne, Switzerland, on March 29, 2015 (XINHUA)

China has been a net oil importer since 1993, and 50 percent of its imports are bought from the Middle East. For a long time, many oil-exporting countries in the region have benefited from China's stable energy demand. In 2014, there were four Middle Eastern countries among China's top six oil trading partners--Saudi Arabia, Oman, Iran and Iraq. Since October 2014, oil prices have plummeted, and China is increasing its oil imports to create a strategic stockpile. According to the latest statistics released by the General Administration of Customs of China, the country imported a record high of 335.5 million tons of crude oil throughout 2015, an 8.8-percent increase from a year earlier.

Though Russia's oil exports to China have increased following the signing of a series of energy cooperation deals between the two countries, Saudi Arabia and Iran remain as China's two leading oil suppliers.

Apart from oil trade, there is huge market potential for China and countries in the Middle East to jointly tap into fields such as infrastructure construction, industrial development and investment. China has been promoting the Belt and Road Initiative since Xi first proposed it in 2013, aiming to enhance infrastructure connectivity and pursue common prosperity in Asia and beyond. It also proposed establishing the Asian Infrastructure Investment Bank and launched the Silk Road Fund. The bank and the fund are now in operation.

The Middle East has a strong demand for infrastructure construction. In recent years, Chinese companies have witnessed steady growth in the fields of project contracting and the export of labor services in the region.

 
Reporters visit an economic development project in Egypt on November 11, 2014. The project is operated by Egypt TEDA Investment Co., a subsidiary of China’s Tianjin TEDA Investment Holding Co. Ltd. (XINHUA) 

Industrial upgrading is also a key priority for many Middle Eastern countries. In Egypt and Iran, their population has reached nearly 100 million, and their younger generations have become the majority in the composition of their demographics. Therefore, developing industries and manufacturing in these countries is not only a necessary approach to boost economic growth but also an effective way to create jobs. So, it will be mutually beneficial to conjoin their development strategies with the Belt and Road Initiative and focus on cooperation on infrastructure construction as well as the transfer of industrial capacity and technology.

China's largest trading partner in the Middle East, Saudi Arabia, is preparing approaches for large-scale economic reform. The country plans to restructure its largest oil company, appeal for additional foreign investment, cut down energy subsidies and encourage innovation in order to stimulate the economy. China should take the chance to expand its investment in Saudi Arabia, in particular with more active participation in oil production in the country. For example, Chinese companies should improve their positions in the value chain and no longer be sub-contractors who only do business in construction. Chinese investors should expand their business to more fields, such as oil exploration, refinery and transport. Moreover, China and Saudi Arabia should enhance bilateral cooperation on a wider range including defense, nuclear energy, aerospace and new energy.

Egyptian President Abdel-Fattahal-Sisi has put forward an impressive plan to boost the domestic economy, including a number of key infrastructure construction projects, such as the development of the Suez Canal Corridor and the construction of a new administrative capital. In light of Egypt's need for economic development, Chinese investors could open factories manufacturing garments, toys, metal ware and consumer goods in the country, which would be helpful in creating jobs for Egyptian people and increase Egypt's exports to neighboring and European markets. Additionally, Chinese companies could participate in Egypt's infrastructure construction, supplying reliable and affordable equipment, machines as well as metro and railway systems.

Iran also needs to enhance infrastructure construction and develop industries, as the country has suffered from tough economic and trade sanctions for over three decades. As nuclear-related sanctions were lifted in mid-January after Iran had completed necessary steps to restrict its nuclear program, the Iranian Government is shifting its priority to economic development. Under such circumstances, Iran will embrace more opportunities of economic cooperation with China.

Over the past 20 years, China and Middle Eastern countries have enjoyed rapid trade growth, marking a 60-time increase from $5.2 billion in 1993 to $300 billion in 2013. The region as a whole has become China's fourth largest trading partner, and in 2014, their trade volume was worth $341 trillion, according to statistics from the General Administration of Customs of China.

Through joining the Belt and Road Initiative with the domestic development strategies of countries in the region, particularly Saudi Arabia, Egypt and Iran, the aggregate imports and exports between China and the Middle East are expected to exceed $600 billion in the next 10 years.

 
Employees of China’s oil producer Sinopec Corp. and Saudi Arabian Oil Co. pose for a group photo in an oil field in Saudi Arabia on August 14, 2015 (XINHUA)

Efforts for peace  

Since the First Asian-African Conference (Bandung Conference) was held in Indonesia in 1955, China has established close bilateral relationships with many countries in the Middle East. These parties have since reached a consensus on safeguarding national independence, defending sovereignty and territorial integrity as well as opposing hegemony and foreign interference, which all serve as strong bonds in their ongoing relationships.

Today, in spite of great changes in the international situation, China and many Middle Eastern countries often uphold and express support for each other in defending their core interests. For example, the China-Arab States Cooperation Forum and the Forum on China-Africa Cooperation are two important frameworks under the joint efforts of China and relevant countries, and have become major platforms for deepening relations between China and countries in the Middle East and Africa. These days, many countries are calling on China to play a larger role in the region.

China is committed to safeguarding the international nuclear non-proliferation regime, and actively promotes peace, security and stability in the Middle East. It has tried to persuade all involved parties to settle disputes through peaceful means. When there is conflict or civil war in a country, China never interferes in that country's internal affairs. Furthermore, China is willing to mediate and offer peaceful approaches to conflicts in the Middle East. Since 2002, China has appointed four special envoys to the Middle East for mediating the Israeli-Palestinian conflict.

China has opposed any solution through the use of force or resorting to the threat of force in regards to the Iranian nuclear issue. Meanwhile, it also firmly stood by sanctions and resolutions approved by the UN Security Council that called on Iran to follow the Treaty on the Non-Proliferation of Nuclear Weapons.

Most importantly, China played an important role in the multilateral negotiations for an international deal to impose restrictions on Iran's nuclear program, conducting arduous mediation with patience between the United States and Iran. China also helped narrow the divide between the two sides, offering compromised approaches and technical support. Finally, an agreement was reached in July 2015 after 12 years of prolonged efforts. The commitment by China has been appreciated by both Iran and the United States, and the international community speaks highly of China's contributions in solving the issue.

In the Syrian conflict, China is also playing a constructive role. In 2013, the alleged use of chemical weapons in war-torn Syria became an international concern. In support of a UN Security Council resolution, China and Russia sent naval fleets to escort the ships that transported chemical weapons out of Syria for disarmament. The destruction of Syria's chemical weapons under international surveillance prevented terrorism groups from getting their hands on these dangerous weapons and materials.

So far, China has cast opposing votes four times in the UN Security Council on draft resolutions that tried to allow foreign military intervention in Syria. After five years of fighting, China's adherence to a peaceful settlement of the Syrian crisis has been acknowledged by more and more countries. Syrian Foreign Minister Walid al-Moallem visited China in December 2015, followed by opposition leader Alptekin Hocaoglu, President of the National Coalition for Syrian Revolutionary and Opposition Forces, in early January. During their stay in Beijing, they announced their acceptance of the Resolution 2554 adopted by the UN Security Council on December 18, 2015, and agreed to participate in peace talks. The peace process in Syria has since been initiated, and shows that China's role as a mediator in the Syrian conflict has been accepted by both sides, and with the utmost respect.

With both growing strength and international reputation, China can and should make more contributions to the peaceful settlements of conflicts in the Middle East for the benefit of all those involved.

The author is an op-ed contributor to Beijing Review  and a professor at Beijing Foreign Studies University 

Copyedited by Mara Lee Durrell 

Comments to liuyunyun@bjreview.com 

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