China's Political and Strategic Marginalization - Term Paper Example

The Relationship between China and the Middle East Introduction Until the late 1970s, Chinas impact on the Middle East was negligible by almost any standard. Although the Chinese regarded the presence of foreign powers in the region as an indirect threat to their national security, there was very little they could have done to uproot such interventions. Excluded from international organizations (primarily the United Nations and its Security Council), and maintaining only a limited network of formal diplomatic relations with the regions governments, Beijing was unable to exert any significant political influence in the Middle East. This failure derived not only from Chinas political and strategic marginalization in the world but also from its relative military and economic backwardness. There was practically no way that China could have effectively competed with the Eastern bloc, led by the Soviet Union, let alone with the Western bloc, led by the US, in providing military and civilian goods to the Middle East. Crippled in diplomatic, economic and military terms, Maos China had no option but to cultivate nongovernmental unofficial actors, especially in the 1960s and 1970s, by backing a number of Middle Eastern national liberation and revolutionary movements. Despite its offers of ideological, doctrinal and limited material support, China was mostly an outsider in the Middle East, playing only a marginal role. During the Iran-Iraq War of 1980-1988, when Chinese arms sales to Iraq reached their peak, over half of Iraqs arms import (in terms of value) came from the Soviet Union, totalling (for 1982-1990) nearly US$14.4 billion. In those years, Chinas average share was no more than 17 %, totalling around US$4.8 billion (and that of France, consistently overlooked, almost 14.5 %, totalling nearly US$4.1 billion). Similarly, in the eleven years from 1994 to 2004, China was Irans number one conventional arms supplier only in 1994 and 1996 (52.4 and 57.4 % respectively). Chinas average share of Irans arms market in those years was 18.3 %, reflecting a steady decline since the late 1990s, while that of Russia was 68.2 %. In terms of types, the PRC share in the Middle East arms market in the 1980s and 1990s was the highest in anti-ship missiles (320 or 36 %); missile attack boats (21 or nearly 34 %); submarines (4 or nearly 29 %); and surface-to-surface missiles (260 or over 20 %). In other types of weapons the Chinese share was smaller, or even nil. At times, however, Beijing excelled. In 1982-1984 it supplied nearly twice the number of tanks to the Middle East as the US and 2.5 times the amount of field and anti-air artillery, and around 50 % more tanks and artillery than the Soviet Union and Russia. Yet on average China was still a small supplier and, as noted above, its arms supplies declined steadily in the late 1990s and the early twenty-first century. Indeed, the poor quality of Chinese weapons has probably been the main drawback in Beijings arms sale policy. A distinction, however, should be made between conventional weapons, missiles and non-conventional weapons. By the late 1970s Chinese conventional weapons were actually outdated versions of Soviet-based weapons acquired in the late 1950s. For twenty years, from around 1960 to around 1980, Beijing was cut off from any external source of military supply, recycling and upgrading its existing defence technologies, which lagged far behind those of the US and the Soviet Union. Why, under these circumstances, did Middle Eastern countries become suddenly interested in Chinese weapons in the 1980s? To begin with, there were no alternative suppliers. In addition, Chinese weapons enjoyed the reputation of Soviet weapons, offered at a lower cost with no strings attached. They were also familiar (in terms of models, training, tools, spare parts, and ammunition) and easy to incorporate, operate and maintain. Probably not intended to serve in the front line anyway, Chinese weapons were deployed to provide a second and third line backup and quantitative reserve. Indeed, as military confrontations in the Middle East over the last twenty-five years have shown, Chinese weapons, when used, have failed to make any difference, with one exception. Chinas HY-2 (Haying) tactical anti-ship missile, known as Silkworm, supplied to Iran during its war with Iraq, constituted an exception to the rule. Practically hand-made, this low-tech and short-range missile was deployed along the bend of the Hormuz Straits covering all oil traffic passing through. After a couple of oil tankers were hit in 1987 by Silkworms, the US and other countries-that until then had declined to intervene in the conflict-quickly stepped in, leading to the termination of the war by 1988. This exceptional case, however, whetted the appetite of Middle Eastern customers, who became very interested in buying Chinese-made missiles and related technologies, as well as non-conventional weapons that other producers refused to supply. Although some Middle East governments had been interested in at least two of Chinas missiles that are capable of delivering non-conventional warheads (the M-9 and the M-11), and had even invested in their development, Beijing eventually refused to sell them. However, in 1988, in a drastic departure from this practice, the Chinese sold some DF-3 intermediate range ballistic missiles (IRBM) to Saudi Arabia. While of dubious military value (this outdated 1960s-vintage missile has never been used in order to deter an enemy, like Saddam Hussein, least of all to retaliate), the deal had substantial political value for both sides, as well as significant economic value for China. Defying Washington, which had earlier rejected Saudi requests for such weapons, Riyadh gained a symbol of independence as well as power, while Beijing paved the ground for diplomatic relations with an Arab government that was not only oil-rich but also the epicentre of Islam, and that had hitherto refused to have anything to do with the communist and atheist PRC. As a bonus for Beijing, Riyadh had to cut off diplomatic relations with Taipei-a long time ally (Yitzhak Shichor, 25). The deal also held economic value for China: in addition to actual payments and investments, Saudi oil supplies were opened to China on a scale previously unknown, precisely at a time when Beijing began to look for external oil resources (see below). Apparently caught by surprise, Washington failed to show much concern about the IRBM semi-conventional deal. Still, it has shown a good deal of concern about Chinas alleged attempts to provide some Middle Eastern countries with advanced missile technologies and even greater concern about its non-conventional adventures in the region (Jin Liangxiang, 5). Washington has consistently accused Beijing of supporting the nuclear programmes of some Middle Eastern governments, notably Iran. Yet Beijing has consistently denied selling any nuclear materials, know-how or technologies to Middle Eastern countries that are not for civilian or peaceful uses. While no clear-cut proof of Chinese involvement in Irans nuclear programme has ever been produced, in September 1995 Washington forced Beijing to scrap (officially to suspend) a deal to sell Tehran two 300-megawatt nuclear power reactors. Repeated media allegations of Chinese military nuclear cooperation with other Middle Eastern countries such as Algeria, Syria and Iraq have been likewise refuted. Nevertheless, post-Mao China has been perceived at least as a potential contributor to nuclear proliferation in the Middle East. Economics For Maos China, the Middle East was of marginal economic value, and vice versa. Primarily motivated by political, ideological and strategic considerations, Beijings foreign aid consistently failed to win the goodwill and support of Middle East governments. There was very little China could sell the Middle East except textiles, shoes, foods and basic tools-and even less that China could buy. Consequently, the share of the Middle East in Chinas total foreign trade was small (around 2.7-3.7 %) and Chinas share of total Middle East trade was even smaller. This began to change in the early 1980s, and even more in the 1990s, as Chinas economy began to grow and diversify. One new economic activity has been the export of labour and construction services. While its foreign aid policy has gradually evaporated, already in the late 1970s Beijing allowed individual workers, and then groups and companies, to undertake construction and other services in foreign countries. This new activity, that had begun on an experimental basis, not to say voluntarily, has gathered momentum and legitimacy. In the 1980s, most exported Chinese labour, now official, poured into the Middle East, primarily to Persian Gulf countries. These countries welcomed the Chinese workforce not only because of their shortage in skilled manpower but mainly because the Chinese were not Muslim, did not intend to settle down and were well organized, disciplined and industrious. By the late 1980s, about 70,000 Chinese workers were employed in the Middle East, mostly in Iraq and Kuwait. Thus, by 1987, Iraq had become Chinas number one market for labour export (known also as labour service cooperation), valued at close to US$658 million, or nearly 70 % of the total. Iraq had also become Chinas primary market for contracted projects (construction services), valued at over US$670 million, or over 18 % of the total. Following Saddam Husseins invasion of Kuwait in 1990, approximately 60 Chinese companies and 4,000 Chinese workers were stranded in Iraq. Kuwait itself also absorbed a good deal of PRC labour and contracted projects, valued at nearly US$125 and US$364 million respectively (Xu Derong, 30). Gradually, however, as Chinas international economic relations continued to expand, labour export was directed to other countries and regions. Consequently, the share of the Middle East in Chinas total foreign economic activities declined from a little over 56 % of the total turnover in 1976-1987, to an annual average of nearly 13 % in 1998-2004. Nevertheless, Chinas foreign economic activities in the Middle East continued to grow. Within five years (2000-2004) the value of Chinas economic cooperation with the Middle East more than tripled from US$1.058 billion to US$3.214 billion. In 2004, four countries accounted for over 71 % of this total: Algeria, Sudan, Iran and the United Arab Emirates. One of the consequences of these developments is that in 2002 Israel became Chinas sixth largest market in the world (in terms of value) for labour exports, following Singapore, Japan, South Korea, Hong Kong and almost equal to the US. Chinas increased activities in the Middle East in 2003 and 2004 have pushed Israel to the seventh and eighth place respectively. Chinese workers in Israel are mostly engaged in construction (Jin Liangxiang, 9). At the same time, the Middle Easts share in Chinas foreign trade has increased quite dramatically owing to unprecedented Chinese arms exports in the 1980s and even greater oil imports in the 1990s and 2000s. Indeed, Sino-Middle Eastern trade turnover multiplied nearly five times over the course of five years: from nearly US$10.7 billion in 1999 to over US$20 billion in 2000 (an 87.3 % increase), to US$24.4 billion in 2002 (over a 20 % increase), to US$35.5 billion in 2003 (a 45.7 % increase) and US$49.6 billion in 2004 (nearly a 40 % increase). The share of the Middle East in Chinas total foreign trade also increased from nearly 3 % in the late 1990s to over 4 % in 2004 (Zev Sufott, 120). For much of this period China used increased exports so as to maintain its traditional surplus in its foreign trade balance with the Middle East, despite its increased oil imports. The Chinese began to import small quantities of oil from the Middle East as early as the 1980s-when China was still self-sufficient and still a net oil exporter. At that time most of Chinas imported oil came from Southeast Asia, and some from Arab countries, mainly Oman and Yemen. Yet, as domestic production could no longer keep pace with Chinas growing energy demands, Beijing gradually increased its oil imports, primarily from the Middle East, becoming a net oil importer in 1993. Shortly afterwards, in 1996, the Middle East provided more than half of Chinas crude oil imports for the first time ever. Since 1996, evidently concerned about the countrys growing dependence on the Middle East, perceived as unstable and unpredictable, the Chinese have been trying to diversify their sources of oil. One indication is that, ten years later, the share of the Middle East oil imports is still below 60 %. However, despite these efforts, the share of oil imported from the Middle East is growing slowly and is bound to increase even further in the future. One reason is that the Middle East contains more oil reserves than any other region in the world. Another is that shipping oil from the Middle East is relatively inexpensive and easy. And, finally, the PRC can offset much of its oil costs by increasing its export of construction and labour services; by offering both conventional and even non-conventional arms and military technologies; and by attracting Persian Gulf investments. Put differently, in the long run there is simply no substitute for Middle Eastern oil. As much as they dislike this dependence, the Chinese have no choice (Liang Guoshi, 28). Over the years Beijing has attempted to diversify its Middle Eastern oil suppliers. For example, Oman, which provided over 25 % of Chinas oil imports in 1997 and over 22 % in 2000, supplied only 13 % in 2004 and only 9 % in 2005. Similarly Yemen, which provided nearly 15 % of Chinas oil in 1998, supplied only around 3 % in the early 2000s. Instead, China began to rely more on other Middle Eastern suppliers, notably Iran and Saudi Arabia. Iran provided less than 8 % of Chinas imported oil in 1997, but became Chinas number one supplier, providing 18 % of the countrys imported oil by 2001. Irans share, however, began to decline, reaching 15.3 % in 2002, 13.8 % in 2003 and 11 % in December 2005. Saudi Arabia has evidently taken the lead. Its share, 1.4 % in 1997, began to grow consistently, reaching over 16 % in 2002 and 2003, and nearly 18 % in 2005. This growth reflects a strategic Chinese decision to form an oil alliance with Saudi Arabia. King Abdullahs visit to China in January 2006 contributed to cementing these relations. It may also reflect Chinas disillusionment with Ahmadinejads Iran, an unstable and unpredictable element in the Middle East (and the world), contrary to Chinese interests. Still, these two countries have been supplying over 30 % of Chinas crude oil imports since the beginning of the century (Li Weijian, 27). To reduce and offset its growing dependence on Middle Eastern oil, the Chinese have tried not only to diversify their oil suppliers worldwide but also to invest, often heavily, in energy infrastructure, all over the world, including the Middle East. Launched in the mid-1990s, this policy has led to Chinas acquisition of concessions and oil production sharing agreements (PSAs), as well as oilfields, pipelines, refineries and other oil facilities in order to guarantee a steady supply of energy in the future to feed its accelerated economic growth. Chinese involvement in energy exploration, production and transportation has now spread throughout the Middle East as Beijing has become an important player in the regions energy industry. Sudan is a noteworthy example. Since 1996, China-the predominant investor among several partners-has become Sudans most important oil producer and, at the same time, also Sudans most important oil exporter and importer. While in 1999 Sudan supplied 0.73 % of Chinas oil imports, in 2002 it became Chinas number four supplier with 9.26 %. In 2004, 64.3 % of Sudans oil exports went to China and in 2005 China imported some 50 % of Sudans oil production (Said Ukasha, 104). In addition to the energy sector (where China not only controls a number of oilfields but has also built refineries, pipelines, petrochemical projects and an oil terminal), Beijing is also heavily involved in the construction of power stations, hydropower plants and dams, conference halls, hospitals, etc. Chinas total investment in Sudan is estimated at US$15 billion. Beijing has managed to achieve this predominance not only because of its urge to reach energy resources but also because of the vacuum created in Sudan by the withdrawal of US and other Western companies in response to the deterioration of the security conditions and the violation of human rights in the country (Yitzhak, 189). Indeed, most of Chinas efforts in pursuit of energy have-by necessity rather than by choice taken place in such pariah countries. Iraq is another example. As early as 1997 China signed oil PSAs with Saddam Husseins Iraq, pledging to invest US$1.26 billion in a 22-year contract, expecting a steady supply of oil once the UN-imposed sanctions were removed. If implemented, these concessions could have provided for a substantial part of Chinas oil needs. This is why Beijing was so eager to see the sanctions removed as soon as possible. Yet Washingtons 2003 offensive has undermined Chinas plans (Shu Xianlin, 77). Since Saddams defeat, Iraqs oil has been practically monopolized by the US, which immediately suspended Chinas (and Russias) oil concessions (Peter, 5). Looking elsewhere, Beijing began to cultivate its relations with Tehran in the 1980s. On the one hand, Beijing is concerned about Irans fundamentalist Islamism and potential influence over Chinas oppressed Muslim minorities while, on the other, Iran constitutes a solid anti American base in the Middle East and a source of energy and money. Relations between the two countries improved after Beijing must have discreetly warned the Iranians not to interfere in Chinas internal religious affairs. Chinese companies are already heavily involved in Irans economy, expanding Tehrans subway system for US$680 million and building a car assembly line to turn out some 50,000 cars a year. But since Iran usually strictly limits foreign involvement in its energy industry, China has been only marginally involved in that area (Feiler, 700). Since the 1990s, Chinese companies have been engaged in oil and gas exploration and in the construction of a pipeline from Neka (on Irans southern coast of the Caspian Sea) to the refineries in Tehran and Tabriz, yet on a relatively small scale. However, since May 2004, when the China National Petroleum Corporation (CNPC) acquired the 49 % Canadian share in the Masjed-i-Suleyman oilfield (Irans oldest) project development and operation rights, China has become involved in Iranian oil production. More impressive was the US$70 billion oil and gas deal signed in late October by the China Petroleum and Chemical Corporation (SINOPEC) to buy 250 million tons of liquefied natural gas (LNG) over thirty years and to develop the giant Yad Avaran field-Chinas largest deal with Iran ever. After commissioning the field, Iran is committed to provide China with 150,000 b/d of crude oil for twenty-five years at market prices (Gerald Steinberg, 145) In 2003, 13.8 % of Chinas oil imports came from Iran (China Daily, Press). Thus, left with few alternatives, the PRC is becoming an important player in Irans energy production and wider economy (Borzou, 5). Moreover, Beijing has apparently become the supporter of Irans nuclear programme in the UN Security Council, though it is unlikely to veto any proposal to impose sanctions on Iran. As mentioned above, China, which has no desire to see a nuclear Iran, has become concerned about Ahmadinejads irresponsible behaviour and has already cultivated Saudi Arabia as a substitute to Irans oil. It should be mentioned that Irans share in Chinas total foreign trade declined from 0.7 % in 2003 to 0.6 % in 2004 (Feiler, 698). China is also involved in the energy sector of other Middle Eastern countries to ensure future energy supplies, though in a more limited way. These include Algeria, Tunisia, Libya, Egypt, Syria, Oman, Kuwait and Saudi Arabia.30 Even Israel could be linked to Chinas pursuit of energy. In early March 2005, a CNPC delegation visited Israel to explore the possibility of shipping oil by reverse flow through the 254km 1.2 million b/d (30 million tons per year) Eilat-Ashkelon oil pipeline. Russian and Central Asian oil (some of it from Chinese oilfields in Kazakhstan) coming to Turkeys Mediterranean coast through the Baku-Tbilisi Ceyhan pipeline, could flow to the Red Sea Port of Eilat and then be shipped to Asia. This option is 10 % cheaper than going around Africa (the Suez Canal cannot accommodate big oil tankers) (Liang Guoshi, 30). Incorporating Israel into Beijings international energy network could somewhat offset potential pressure entailed by Chinas growing dependence on Persian Gulf oil. Although so far there has been no sign of it, this dependence may harm Chinas relations with Israel. While a purely commercial transaction, oil trade has political and strategic implications. Even without being asked to do so, Beijing may reflexively modify its Israel policy. Conclusion Over the past twenty-five years, the implications of Chinas upsurge for the Middle East have undergone three stages. First, in the 1980s, Chinas sudden emergence from the isolation of the Mao era led to an immediate exploitation of opportunities that existed in the Middle East (but not elsewhere), accompanied by an unprecedented surge in extensive arms sales and labour export as well as arms acquisitions. It was as if Beijing had become intoxicated with the dramatic change it had undergone, quickly backing away from time-honoured Maoist legacies. While it took the international community almost a decade to realize, and internalize, this dramatic change, its impact on the Middle East was instant. For a decade the Middle East became more important to China than ever before (and vice versa), and, underwritten by an unwritten Sino-US alliance, China now mattered. The 1990s, however, signalled a retreat and disillusionment on all sides, primarily and most significantly by Washington but also by Beijing. Chinese arms exports and imports declined substantially, the former due to their inefficiency, the latter due to US pressure, and both because of the emergence of alternative markets and suppliers elsewhere. In addition, reflecting its Open Door policy, Chinas international economic relations began to diversify at the expense of its Middle East presence. Consequently, Sino-Middle Eastern relations returned to their normal and traditional proportions while Beijing adopted, or was forced to adopt, a less active policy. By the early 1990s, Beijing had resumed its usual passivity, reacting to regional events rather than initiating its own moves. This cautious policy was underlined by Chinas growing dependence on Middle Eastern oil that limited its political options. Since 2000, however, there have been signs that Beijing is trying to restore the balance between its negative and positive roles in the Middle East. While Beijing is still careful not to tread on Washingtons toes (as in the case of the 2003 offensive in Iraq or non-conventional arms proliferation issues including Irans nuclearization), the Chinese have consolidated their relations with governments such as Sudan and Iran and have especially used their huge foreign exchange reserves and newly acquired economic power to gain a solid foothold in the Middle East and erode Western, in particular US, interests. For example, Chinas belated decision finally to build the oil pipeline connecting its Kazakhstan concessions near the Caspian Sea with Xinjiang could have been aimed at the combined goal of increasing oil shipments to the east and decreasing oil shipments to the west. For a while, precisely when its traditional arms markets in Iran and South Africa collapsed, Israel penetrated the PRC arms market. Soon, however, this led to friction and controversy with the US blocking this part of Israels arms sales policy. Chinas alleged supply of missiles and non-conventional weapons to Israels enemies, primarily Iran, has also been an occasionally overdone cause for concern. Beijings supposed intention to become more involved in the Middle East peace process has remained just that: an intention (Zhang Xiaodong, 155). The pro Arab and pro-Palestinian attitudes of Maos China have by and large gone. Although Chinese rhetoric still tends to identify with the Arabs and the Palestinians, this is not always so and it is not necessarily done at Israels expense. Post-Mao Chinas main impact on the Middle East, Israel included, has been economic-as in many other parts of the world. Thus, while Beijings politics in the Middle East still tend to be passive, economically it has become very active. As Chinas power grows, so will its interests in the region. It is not only that China needs the Middle East but, at least from Beijings perspective, the Middle East needs China not only in economic and political terms but also, and perhaps primarily, as a model of fast economic development without democratization. The Chinese model could become a welcome substitute to the American model. References Borzou Daragahi, China Goes Beyond Oil in Forging Ties to Persian Gulf, New York Times, 14 January 2005, pp. 4-9. China Daily, 31 October 2004; Kaveh Afrasiabi, China Rocks the Geopolitical Boat, Asia Times, 14 November 2004. E. Zev Sufott, A China Diary: Towards the Establishment of China-Israel Diplomatic Relations, London, 1997, pp. 119-126. Feiler, Gil. ‘Global Oil Trends and Their. Effect on the Middle East.’ IsA 12, no. 4 (2005): pp. 698–714 Gerald Steinberg, Chinese Policies on Arms Control and Proliferation in the Middle East, in P.R. Kumaraswamy (ed.), China and the Middle East: The Quest for Influence, New Delhi, 1999, pp. 142-161. Li Weijian, Middle East Energy and Chinas Peaceful Rise, Petroleum and Petrochemical Today, Vol. 12, No. 9 (2004), pp. 26-28, 38. Liang Guoshi, Egypts Oil and Gas Resources and China-Egypt Trade, Arab World, Vol. 3 (2003), pp. 28-31. Jin Liangxiang, ‘China and the Middle East: Energy First’ Published in the Middle East Quarterly, Spring 2005, pp. 3-10. Peter S. Goodman, Big Shift in Chinas Oil Policy: With Iraq Deal Dissolved by War, Beijing Looks Elsewhere, Washington Post, 13 July 2005, pp. 1-8. Said Ukasha, The Future of China-Israel Relations, Al-Siya¯sah al-Dawliyyah, Vol. 145 (2001), pp. 102-105. Shu Xianlin, Great Power Competition for Middle Eastern Oil after the Cold War and Chinas Oil Security, Journal of Yangtze University, Social Sciences Edition, Vol. 28, No. 2 (2005), pp. 74-78 Xu Derong and Xiang Dongmei, A Political and Military Analysis of the Iraq War, Journal of Harbin University, Vol. 2, No. 5 (2004), pp. 28-33 Yitzhak Shichor, Decision-Making in Triplicate: China and the Three Iraqi Wars, in Andrew Scobell and Larry M. Wortzel (eds.), Chinese Decision-Making under Stress, Carlisle, PA, 2005, pp. 185-222. Yitzhak Shichor, East Wind over Arabia: Origins and Implications of the Sino-Saudi Missile Deal, Berkeley, CA, 1999, pp. 24-25. Zhang Xiaodong, Chinas Interests in the Middle East: Present and Future, Middle East Policy, Vol. 6, No. 3 (1999), pp. 150-159. Read More