Date :Tuesday, October 16th, 2018 | Time : 07:38 |ID: 74182 | Print

Beijing is launching a mini-Marshall Plan for the Middle East

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en shafaqna BEIJING IS LAUNCHING A MINI-MARSHALL PLAN FOR THE MIDDLE EAST

SHAFAQNA- As President Xi Jinping impels China to take a more active role internationally, the Middle East is becoming one of its key staging grounds. Beijing is launching a mini-Marshall Plan for the Middle East and North Africa. China and the Middle East have mutual interests and their economic relationship is expanding beyond oil, which Arab nations have long supplied to China. The Chinese tend to slowly consolidate their relations with the Persian Gulf countries and improve their strategic relations in this area.

The question is that what are the main factors on China’s Middle East policy and its competition with the U.S? “China’s energy dependency” on the Middle East, “economy” and support for “stability” in the Middle East are the main factors.

A key message conveyed by the China-Arab State Cooperation Forum is that China sees economic development as key to resolving many of the security and humanitarian issues in the region.

And China seeks to be a world model for combining successful economic growth with an authoritarian regime – a model that holds some appeal in this part of the world.

Chinese companies are actively pursuing infrastructure projects in the Arab region

Chinese companies are actively pursuing major infrastructure projects in the Arab region as part of Xi’s Belt and Road initiative (BRI) – with many more to come as economies in the region recover after the Arab Spring.

The Chinese institutions created to support the BRI are gearing up to provide financing for much-needed infrastructure.

Arab region is welcoming China

In the Middle East, demand is increasing for renewable energy, fin tech, artificial intelligence, and electric cars – all sectors where China is playing a leading role. In fact, much of China’s financing will go toward supporting projects and sectors where China is a global leader, And the Arab region is welcoming it.

Arab countries, eager to reduce their dependency on oil exports and diversify their economies through creating new industries, are welcoming Chinese investment.

Key areas of focus will be promoting cooperation on oil and gas, nuclear, and clean energy. China is also using this financing – as well as access to its own market – to set key standards in the region.

Middle East is a core goal of the Belt and Road Initiative

China announced that it will “green” the Belt and Road: in order to receive financing, BRI projects must be in line with Chinese green lending standards. China is also establishing green pilot zones along BRI, which will require that those participating in the zone comply with Chinese standards on green development. While it is a positive model to use market mechanisms and markets for encouraging green development, it is also a subtle way of ensuring that the “Chinese way” is adopted in other countries, the diplomat reported.

For Xi, capturing the resource-rich Middle East is a core goal of the Belt and Road Initiative, so expect to see more developments in this new strategic partnership.

Belt and Road is China’s trade policy, it is a trading bloc to counter the TPP which was supposed to be the US Pacific trade bloc which excluded and contained China.

China’s political interests follow its global economic goals

While it is no surprise that China’s political interests follow its global economic goals, it remains to be seen if its economic incentives result in the political ties that China seeks, particularly with the often fraught Middle East.

China’s burgeoning ties with the Middle East — though still primarily economic — are not limited to commercial and financial activity. A close look at Xi’s July speech or China’s 2016 policy statement on the Middle East reveals a detailed discussion of economic statecraft, but the barest minimum of boilerplate on politics, diplomacy, and security in the region, foreign policy reported.

China developing its ties with Saudi Arabia

Just as it seeks to accomplish its strategic objectives in the Middle East by developing its ties with Saudi Arabia, arguably the premier Middle Eastern power, Beijing appears to wish to leave nothing to chance.

In the case of Saudi Arabia, this alignment of strategic visions has translated into a strong commercial signing package during King Salman’s March 2017 state visit to Beijing, totaling $65 billion of bilateral agreements in the oil, space, and renewable energy sectors.

Egyptian collaboration with China on a new Suez Canal cooperation zone

Additionally, Egyptian collaboration with China on a new Suez Canal cooperation zone is underway. In Egypt alone, the Chinese have already pledged almost $50 billion to help support development of the new administrative capital.

Chinese capital inflows transformed a backwater fishing village into a $10.7 billion

In Duqm, Oman, Chinese capital inflows transformed a backwater fishing village into a $10.7 billion “Sino-Oman Industrial City” featuring an oil refinery capable of processing 235,000 barrels per day.

China also seeks to draw the UAE into its Belt and Road Initiative

In keeping with its overall “Arab Policy”, and as it has done with Saudi Arabia, China has nurtured and expanded its ties with the United Arab Emirates. China became the UAE’s largest trading partner in 2011 and of Dubai in 2014. Bilateral trade between the two countries reached US$45 billion (approx. $63.4 billion in 2018 exchange rates) last year. The number of Chinese tourists travelling to the UAE has risen.

Thirteen Chinese cities, including Beijing, Guangzhou, Hong Kong, Shanghai and Shenzhen are connected to Dubai by more than one hundred weekly flights. For China, the world’s largest trading country, Dubai offers much economic and strategic potential, thus making it a strong focal point in its overall Arab Policy. China also seeks to draw the UAE into its Belt and Road Initiative (BRI).

Iran holds a key position in China’s Belt and Road Initiative

China’s economic relationship with Iran, for which it is the No. 1 trading partner, has continued to deepen. Iran and China signed a Comprehensive Strategic Partnership in 2016. As European firms fretted last year about a return of U.S. sanctions under President Donald Trump, Chinese state-owned investment arm CITIC Group established a $10 billion credit line for Iran.

In 2017, China-Iran trade exceeded $37 billion, with year-on-year growth of 19 percent. Whether and how US will try to punish China for deepening ties with Iran and not following the US suit remains to be seen. Besides oil, Iran holds a key position in China’s Belt and Road Initiative or the Silk Road Economic Belt and the 21st-century Maritime Silk Road. As a matter of fact, some believe that Iranian oil sanctions could give China leverage in a trade war with the US.

China and Jordan harmonize their development plans

Jordan is in discussions with Beijing to harmonize their development plans with the Belt and Road Initiative.

China prefers win-win relations with US

Tensions between the United States and China seem to be defining the bilateral relationship between the two countries these days. From a growing trade war to the Trump administration’s characterization of China as a “strategic competitor seeking to undermine U.S. power and influence” in its 2017 National Security Strategy, political and economic relations appear to have settled at a recent nadir, national interest.

But great power competition between the two most powerful militaries and economies is not geographically limited. China is indicating its intent to shape the Middle East’s regional and military landscape through trade relationships with regional states as well as through projection of its own military.

As a matter of fact, some believe that Iranian oil sanctions could give China leverage in a trade war with the US.

But Victoria (Xiaoli) Guo from the Centre for Arab and Islamic Studies at the Australian National University, believes that while the gap between China and the US is narrowing, it does not mean that China would like to contest with the US for the sphere of influence in the Middle East.

Instead, China prefers win-win relations with any other countries, including the US and Iran. So, according to her, it is hard to say that China would use one against the other, in other words, use the Iranian oil sanction leverage the negotiations with the US.

 

Read more from Shafaqna:

The US-China Trade War will have implication in The Middle East

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