China’s long game in West Asia

Iran’s strategic location connecting West Asia and Central Asia is key to President Xi’s One Belt, One Road initiative.

Updated - September 23, 2016 11:20 pm IST

Published - January 29, 2016 12:13 am IST

Chinese President Xi Jinping, right, shakes hands with Iranian President Hassan Rouhani in an official arrival ceremony, at the Saadabad Palace in Tehran, Iran, Saturday, Jan. 23, 2016. (AP Photo/Ebrahim Noroozi)

Chinese President Xi Jinping, right, shakes hands with Iranian President Hassan Rouhani in an official arrival ceremony, at the Saadabad Palace in Tehran, Iran, Saturday, Jan. 23, 2016. (AP Photo/Ebrahim Noroozi)

For decades China remained on the sidelines of West Asia’s stormy waters. Even when the country was rising as an economic powerhouse and stepped up cooperation with the major powers in West Asia, the cornerstone of this engagement was non-interference: be it the Israeli-Palestinian conflict or the Saudi-Iran rivalry, the Chinese would continue to sit on the fence. Beijing looked at the region through its own prism. It didn’t want to get swamped in the complex geopolitics of the region at a time when its primary focus was on economic development. So it built ties with West Asian nations based on three principles — secure energy supplies, expand markets for finished goods and find investment opportunities — while leaving the U.S.’s primacy in the region unchallenged.

The principles of China’s economic engagement remain more or less the same even today. But a close look at the contemporary Chinese foreign policy would reveal that its overall approach to West Asia has started changing. In recent years, Beijing has been more active in global diplomacy concerning the region (Iran nuclear deal); has started taking strong positions at the UN (Syria vetoes); and has even begun flexing its military muscles (naval exercise with Russia in the Mediterranean). This increased willingness to act as a regional power in West Asia is in line with the larger changes >President Xi Jinping is effecting in China’s foreign policy . There’s a growing consensus in Beijing that the passive foreign policy of the rising years has to be upgraded to a pro-active approach that suits the country’s big power ambitions. Mr. Xi’s recent visit to West Asia is the loudest statement yet that China is ready to play a more active role in the region.

Pivot to Persia Beijing continues to claim its ‘equidistance principle’ remains intact in its West Asia policy. Mr. Xi chose to visit the three most powerful Muslim nations in the region >in his first trip to West Asia as president — Iran, Saudi Arabia and Egypt. These countries are important for China from an economic point of view. China is the world’s largest oil importer. Its demand for imported oil is expected to grow from 6 million barrels a day in 2014 to 13 million barrels a day by 2035. Much of this demand will be met by imports from West Asia. In 2015, Saudi Arabia was China’s largest source of oil. Beijing has also sold intermediate range ballistic missiles and DF-21 ballistic missile system to Riyadh. > Iran is important for the same reason. China would not like to be heavily reliant on Saudi Arabia for energy supplies and an immediate alternative is Iran. Both countries also have strong defence cooperation. Egypt is a major market for China’s machines and electronics industries. Bilateral trade jumped close to 14 per cent in 2014 to $11.62 billion.

While Mr. Xi said during the trip that China would prefer to keep its economic cooperation with these countries intact, the real focus of the visit was not lost on anyone. He was the first world leader to visit Iran after sanctions were lifted following the nuclear deal. In Tehran, he talked about a “new season” of Sino-Iranian ties and a 25-year strategic cooperation plan, committing to increase two-way trade to $600 billion over the next decade. Both countries have agreed to enhance security cooperation through intelligence sharing, counter-terror measures, military exchanges and coordination. Beijing would also support Iran’s full membership in the Shanghai Cooperation Organisation, a China-led regional security framework.

Why Iran Iran is vital for China’s continued rise. Its strategic location connecting West Asia and Central Asia is >key to President Xi’s One Belt, One Road initiative . Announced in 2013, the project proposes to build a chain of energy, infrastructure and maritime links from China to Europe through West and Central Asia. Iran offers immense investment opportunities for Chinese companies in several areas, particularly in energy and infrastructure. Needless to say, Iran’s energy resources help China diversify its import basket. Moreover, the geopolitical value of Iran is immense for any power that seeks an ambitious role in West Asia. Even the U.S., at the height of the Cold War, had a client-state relationship with Iran. Only after losing Iran following the 1979 Islamic Revolution did it pivot towards the Gulf kingdoms. From China’s point of view, Iran is among the most stable countries in the region. And it’s the only major country in West Asia where the U.S. has practically no influence. So it’s natural for China to see Tehran as a vehicle entry into West Asia, historically a region of U.S. influence, at a time when the U.S. is pivoting to the Chinese backyard in East Asia. This calculated approach had dictated China’s Iran policy for a long time. During Iran’s isolation era, China adopted a dual approach: it supported UN resolutions against Iran’s nuclear programme while expanding economic and security cooperation with Tehran. During this period, China overtook the European Union as Iran’s largest trading partner. Chinese-Iranian trade increased from about $3 billion in 2001 to over $50 billion in 2014.

Security ties also flourished at a time when international negotiations on Iran’s nuclear programme were going on. In 2010, Chinese fighter jets refuelled in Iran, the first foreign military units permitted on Iranian soil since the Islamic Republic was established. Chinese warships paid a visit to the Iranian port of Bandar Abbas in 2014, another first. Besides, China took a favourable view of Iran’s regional policies. It repeatedly vetoed the resolutions prepared by Western powers demanding the ouster of Syrian President Bashar al-Assad, an ally of Tehran.

So China is actually playing a long game in West Asia. Even when complying with international sanctions, it expanded ties with Iran so that it would be better placed than any other power in a post-sanctions Iran. (India did the opposite, and failed to retain the balance between Western pressure and ties with Iran during the sanctions era.) But the Chinese position also bears challenges. First, after the nuclear deal, European companies are keen to do business with Iran. President Hassan Rouhani is now on an expansive European visit doing deals. Iran will be less reliant on China for economic benefits in coming years. Second, China will be forced to take stronger positions in West Asian conflicts such as the Iran-Saudi rift if it wants to play a larger role in the region. But the evolution of China’s foreign policy over the past few years shows that its risk appetite is growing, commensurate with its global position — something that’s a must for involvement in West Asia.

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