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Thursday, August 22, 2013

China and America's battle over the Middle East


 Executive magazine - Special Report

           China's first aircraft carrier, the Liaoning, is not yet in active service

The consequences of China’s economic interests in the Middle East and North Africa involve a layer of investments on political and security levels. One such cost is in securing the safety of energy transports and another is in the provision of defense forces around the region with military hardware. An assessment of these investments reinforces the view that China is not yet playing a large role in the Middle East as either a naval policing force or supplier of arms, especially not when compared to the United States. 
There is a lot of talk as to whether this is an Asian century: that China is destined to knock the US off its pedestal at the top of the global order. When it comes to the Middle East and North Africa, will Beijing’s involvement in the region move beyond ensuring energy security? 

Greater Chinese involvement in the region beyond economics is in MENA interest, but politically it is more to Beijing’s advantage to have stronger economic ties as a booster for political connections. With political pundits suggesting the US is rolling back its MENA presence as it “pivots toward Asia,” this, some opine, has cracked open the door for China to get a foot in.  
“Until recently the Chinese thought MENA was the Americans’ [turf], who would use force and protect energy supplies; [the Chinese government is] a practical government that could live with the US’ effective leverage over oil supplies as long as it was getting the oil,” said Derek Scissors, an Asia Economist at the Heritage Foundation. “But if the US cannot ensure oil gets to the rest of the world, it is a problem for China.”

Straits and horizons

Currently, MENA accounts for around 50 percent of China’s energy imports, and the region is only set to become more crucial to Asian economies, with the International Energy Agency predicting that over the next decade more than 90 percent of the MENA region’s oil and gas trade will be heading to Asia. This requires stability in MENA, and that the Strait of Hormuz remains open for oil tankers. The US has been the dominant player in ensuring that this oil continues to flow, and has paid a lot to do so, with the costs of projecting military force in the Gulf estimated at $6.8 trillion between 1976 and 2007, according to research by Princeton University’s energy policy department.
“What if the US is only willing to spend $1 trillion and not $2 trillion; is that enough? Who will step in? If there is long-term partial US disengagement from the region, China needs to do something to offset that risk, and they are not making decisions for now, but for a world that will be radically different in 2020 than in 2013,” said Scissors.

China’s People’s Liberation Army Navy (PLAN) still has only limited military capacity. China is not yet up to the task, with two aircraft carriers yet to be seaworthy, and its long-range naval capabilities limited. 

More importantly, any attempt by China to assume a greater role in policing the international sea lanes could be met with suspicion and international resistance. Indeed, China has only recently been involved navally in the region, with the PLAN over the last four years deploying nearly 10,000 personnel on warships off the East African coast as part of multinational anti-piracy operations. Unilateral moves would likely not be so welcome, but if China were to seek expansion of its naval presence, it would be a different story. “An increased PLAN presence in MENA could be seen as a military intrusion in what is seen as Western territory. I don’t think many Western countries would like them roaming the Gulf, the Mediterranean and the Red Sea,” said Ghanem Nuseibeh, founder of Cornerstone Global Associates.

In the regional defense markets, China is a minor player and does not measure up to the arms-for-oil alliances that have cemented ties between the West and MENA countries. In terms of arms sales, China had a 4 percent stake between 2004-2007, dropping to 1 percent between 2008-2011, according to statistics released by the US Congressional Research Service. The US on the other hand accounted for 78.9 percent of all arms agreements with the Middle East between 2008-2011, at almost $92 billion.

A changing world

Yet in a fluctuating global order, anything is possible down the line. “If you asked people 15 years ago if China would be building power plants around the world, people would’ve said no. In 10 years time China may be selling drones. So you don’t extrapolate from the past. Maybe there will be a Chinese presence in MENA that is not currently anticipated,” said Scissors.

The drop in Arab willingness to sign weapons contracts with China shows that Beijing’s credibility is dwindling as a result of attempts to stay neutral in MENA politics “It is hard for Beijing to stay neutral. In Syria, they’re trying to do nothing, but in the MENA region people feel China is pro-Assad, which is hurting China’s image among the majority of Arabs that support the rebels. If Beijing doesn’t veto US sanctions on Syria, then Iran and Russia are mad at China. This is what happens when you become a global economic power — it is hard to stay in the middle,” said Jacob Zenn, an analyst of African and Eurasian affairs at the Jamestown Foundation.

This resonates with the view that China faces fundamental limits with regard to ascending to top dog in the geopolitical order. As US elder diplomat Henry Kissinger said in a debate two years ago, “I have enormous difficulty imagining a world dominated by China and I indeed believe that the concept that some country will dominate the world is in itself a misunderstanding of the world in which we now live.”

An indicator of the current state of play in how Arab governments see the Chinese question was given in a recent speech by Yahya bin Abdul-Kareem al-Zaid, Saudi Arabia’s ambassador to China: “To understand China’s relations with Gulf states, one must understand Sino-American relations.” 
“I think that statement is important, as the US is very cautious about remaining the number one power in the Gulf, and there is a clear goal on Iran,” said Zenn. “If China starts to upset that strategy or hegemony in the Gulf, then this will ultimately affect US-Chinese relations.” 

Scissors concurred. “I assume what the ambassador said is that the Chinese will not do anything to upset the US when it comes to Saudi Arabia, but we will see what happens, as maybe that is the old world.”

The future of China’s involvement in the region may – like in the past few decades – be decided in the halls of power in Washington as part of a greater game, as the US and Beijing vie for global supremacy.

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