Strange Bedfellows: China and the US in the Middle East

Egypt, a major ally of the US since at least 1976, teeters on the brink of democracy or disorder (it seems undecided which).  Commentators have cited the experiences of both Iran in 1979 and Russia in 1917 by way of comparison, but most seem to agree on the inappropriateness of looking to the Warsaw Pact countries in 1989.  Some coverage has dwelled on the resemblance with the unrest in China in 1989.


Perhaps of most interest for this blog, though, is that events in Egypt have also thrown light on China’s reliance on the US provision of security in the region.  This scenario is ironic given that China is rapidly emerging as a "strategic competitor” to the US. 


China is a major importer of the region’s oil, a situation which renders the country’s economy vulnerable to price shocks, such as those which might derive from regional unrest and associated disruptions in supply. Taking Egypt’s neighbour Saudi Arabia as an example, the kingdom provided about 28% of Chinese oil imports in 2010.  Indeed, China is now a bigger importer of Saudi oil than the US (although not bigger than Japan or South Korea).  The bilateral relationship is also of growing importance; in May 2010 Aramco, the Saudi state owned oil producer, held a board meeting in Beijing, an event symbolising the emergence of a key commercial and diplomatic partnership.  Saudi Arabia seems at present not to have the same difficulties with its underemployed and angry young as Egypt, but the regime’s frailty has become a much repeated truism of Middle Eastern commentaries.  


China’s reliance on Saudi Arabia and the US security system has come about in part owing to Washington’s single minded policy towards Iran.  China sought links with Iran in the 1990s and early years of this century; by 2007 China had become Iran’s pre-eminent partner in the oil business, accounting for about US$50 billion in investment.   However, Washington (and partners such as Israel, France and the UK) pressed Beijing to scale back this involvement owing to concerns about regional security.  China in turn sought to balance its commercial and diplomatic links with Tehran against a broad (if at times grudging) willingness to cooperate with Washington.  Saudi Arabia, whose king has called on the US to cut the head off the Iranian snake, has played a key part in this drama. Indeed, in March 2010, US Secretary of State Hilary Clinton and Secretary of Defense Robert Gates stated in Riyadh that Saudi Arabia was able to supply any of China's Iranian oil requirements.   


A different, if related, aspect of China’s reliance on US favour is that its oil imports depend on the US provision of security in the Middle East and throughout the world’s oceans.  In this context, any movement by Egypt away from Washington may weaken US hegemony, perhaps by raising the risk of a conflict involving Israel or by facilitating Iran’s efforts to expand its influence through proxies such as Hezbollah or Hamas.  In relation to maritime security, the foreign policy community in Beijing has made noises about expanding its definition of core interests to include sea lines of communication, a move which would alleviate this vulnerability.  It has seemingly not yet done so, though, and it does not have the naval capacity to enforce any such policy. 


Strangely, though, this alignment of interests does not necessarily mean that China is a status quo power in the Middle East.  Some figures on Chinese oil consumption are illustrative.  China’s oil consumption rested at about 373 million tonnes in 2008, and will rise to as much as 530 million tonnes by 2015.  China’s oil production is stagnant, though, and so imports are increasing (to about 60% of oil used in 2008).  This increase is dramatic, and derives in great part from demand in the transport sector, because no sustainable alternative to oil as a transport fuel yet exists.  Transport consumed about 14.7% of oil used in 1990, but this share had risen to 41.8% in 2008.  The sector is still expanding rapidly: China overtook the US in car sales in 2009, when its people bought 13.7 million cars (a 50% increase on 2008), rising to 17 million in 2010 and projected to rise to about 19 million in 2011.  As such, demand is sure to rise.


This situation could create an environment pregnant with the risks of misunderstanding.  Washington has already issued statements raising concerns about China’s desire to “lock up” resources in order to ensure energy security.  In this context, China’s increasing importance as a customer for Saudi Arabia may come to strain that state’s relations with its American security guarantor.   Of course, much will relate to US perceptions of China’s engagement with Riyadh, but it is hard to see US planners taking such concerns lightly, unless Beijing and Washington take dramatic steps to build confidence.   Any loss of bilateral confidence might subsequently compel China to take new steps to protect its sea lanes of communication, as perceptions of their vulnerability to interdiction increase, or to develop power projection capabilities in the Middle East.  This situation risks propelling both countries into a confrontational scenario akin to that between Japan and the US in the 1930s (a dispute based primarily on Japanese concerns about lack of access to resources).  


This already delicate situation now also has to contend with a wave of unrest in Egypt which threatens to sweep across the Middle East and risk changing its character for good.  What will follow in the region is hard to predict, but given the difficult relationship between China and the US, it could well make bilateral relations harder to manage.    


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This article draws heavily and gratefully on discussions and papers delivered at the conference ‘Resource Diplomacy under Hegemony’ at the Centre for China’s Transnational Relations at the Hong Kong University of Science and Technology.  Names associated with contributions have been excluded in accordance with Chatham House rules.