Is China ‘Unseating’ the US in the Middle East in a New Energy Landscape?

China has long been one of the world’s largest oil importers. Although President Xi Jinping has called for a ‘new normal’ developmental approach (tolerance for slower aggregate economic growth) and an ‘energy revolution’ to reduce the pace of growth in fossil fuel consumption, overall oil demand in China is still set to rise. It is expected that the proportion of China’s crude oil imports from the Middle East will reach 70 percent by 2020 and continue to grow until 2035, according to the International Energy Agency. This oil will be supplied by a limited number of Middle Eastern and African states, including Saudi Arabia, Angola, Iraq, Iran, Russia, and Oman. The oversupply in the global oil markets indicates a greater availability of oil at lower prices, which is undoubtedly good news for China.

The rapid success of the ‘tight oil’ revolution in the United States, where US producers exploited technological advances to extract oil and gas from inside rock formations which were previously considered inaccessible, has evoked mixed feelings in Beijing. It has helped to lower global energy prices, but China cannot directly import oil from the United States. Chinese reliance on Middle Eastern oil is unalterable, determined largely by the fact that Chinese refineries are set up to process the specific type of oil that comes from there. China’s decision makers still view the country’s high dependency on imported oil as a source of vulnerability.

These shifting energy and geopolitical dynamics have prompted decision makers in China to review their country’s involvement in the Middle East. In the article “China and the Middle East in a New Energy Landscape,” Zha Daojiong and Dr. Michal Meidan argue that there are preliminary signs of change in China’s attitude toward the Middle East as a result of the shifts in global oil markets and of Beijing’s more active foreign policy following President Xi Jinping’s accession to power.

Before Henry Kissinger’s secret visit and engagement with China in 1971, the US led an embargo against trade in all ‘strategic materials’ with China, including access to Middle Eastern or other foreign sources of oil. Now that the United States is less reliant on foreign oil, it may again disrupt the energy supply to China by exploiting its influence in the Gulf.

China has had significant economic relations with the Middle East going back to the historic Silk Road time. In September 2013, Beijing announced its new developmental policy, abbreviated One Belt, One Road, which is a framework that focuses on cooperation among Eurasian countries with both a land-based and an oceangoing economic belt. In reaction to the shifting energy scenario and its ‘New Silk Road’ policy, China has rapidly expanded its economic ties with the Middle East through trade and investment (energy, metals, real estate, transportation, etc.). Furthermore, China has a significant Muslim population. Cultural, personnel, and religious exchange offer additional channels for interactions between China and the Middle East.

However, according to the authors, it is not likely that China would seek to fill a ‘geopolitical vacuum’ that could result from the United States’ partial withdrawal from the Middle East in the future. China has long maintained a pragmatic or neutral stance in the Palestinian-Israeli conflict, adopting a moderate position and advocating humanitarian reactions. China can hardly diverge from its non-interventionist foreign policy, and a more robust military presence in the region remains low on its list of strategic priorities.

Chinese leaders’ top diplomatic concerns will remain in regions geographically closer to home, on matters ranging from maritime disputes in the East and South China seas to potential instability in Central Asia (especially Afghanistan) to shifting dynamics in northeast Asia. Although China seeks to deepen its economic and cultural influence in this region, there is no prospect of China ‘unseating’ the United States in the Middle East.

Article Source: Meidan, Dr. Michal, and Zha Daojiong. “China and the Middle East in a New Energy Landscape.” Chatham House, 2015.

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