Why China is investing differently in the Middle East

It seemed to be the prologue of a political fiction novel what the world has witnessed from the 17th to the 20th of January. The scene opens in a small town in the Swiss Alps, Davos, where the global business elite gathered together at the World Economic Forum. The General Secretary of the world’s largest Communist Party and president of the People’s Republic of China stood up and delivered a solid, comprehensive and – in some parts -poetic defence of globalization and free trade. Xi Jinping first described the global economy as “the big ocean that you cannot escape from” and then condemned any attempt of isolationism as a coward, egoist and counter-productive “retreat to the harbour”. Afterwards, he presented China as the sheriff of opening-up strategies and common development, proposing “the building of the Free Trade Area of the Asia Pacific and negotiations of the Regional Comprehensive Economic Partnership to form a global network of free trade arrangements” and committed himself to “concluding open, transparent and win-win regional free trade arrangements”.

Three days later, Donald Trump has been sworn in as 45th President of the United States of America. In his inauguration speech, he made a clear point in vowing for America First. The United States, once glorious champion of opened borders for trade, capital and mobility, took the oath of retreating within its borders and overtly blamed the development of other countries as the cause of its own decay. “For many decades, we’ve enriched foreign industry at the expense of American industry” and “the wealth of our middle class has been ripped from their homes and then redistributed all across the world” are only two examples of the many statements used by the new president to take distance from the model of global economy and policy, whose foundations were built by his predecessors.

Donald Trump, one of the greatest beneficiary of the liberal order, turned his back to his own past and his head towards a future of protectionism and isolationism. He clearly promised to revise “Every decision on trade, on taxes, on immigration, on foreign affairs”, “to benefit American workers and American families”, and to protect American borders from “the ravages of other countries making our product, stealing our companies and destroying our jobs”. In his vision: “Protection will lead to great prosperity and strength”.

And, coherently with his promise that “the time for empty talk is over, now arrives the hour of action”, from the White House, the first concrete steps of this strategic retreat have been actually moved. While Beijing is fostering and building up Free-Trade Agreements, Washington announces a withdrawal from the Trans-Pacific Partnership (TPP) and threats the same treatment to the North American Free Trade Agreement (NAFTA), should its partners refuse a renegotiation.

In the same document, the brand-new political centre of world’s power defined its vision of America First Foreign Policy, aiming at “peace through strength”, inevitably revoking the shady and ruinous decade of George W. Bush. And, while regretting the many decades of subsidies of army to other countries and defence of other countries’ borders in his inauguration speech, the new president has announced that “defeating ISIS and other radical Islamic terror groups will be our highest priority” and that this goal will be achieved through “aggressive joint and coalition military operations when necessary”. Not a word has been spent on the reconstruction of a region destroyed by years of war, neither on peacekeeping plans nor on prevention of future tensions. On the contrary, the commitment taken by the new president is to stop seeking to impose American way of life on anyone.

Hearing from the East, the issue sounds in a more melodic harmony. The Chinese path to global influence has always been based on its similarities to the non-western world, through what they call “South-South cooperation”. So far, an often-cited example of a region where China’s influence has replaced that of former colonial empires is Sub-Saharan Africa. Now that China has stressed its interest in the MENA region, it would be unwise to ignore the development of its strategy.

In January 2016, Beijing released the China’s Arab Policy Paper, a document aimed to explain China’s approach to the region. After an introductory outline of the history of China-Arab relations, from the peaceful coexistence of trade powers through the ancient Silk Road to the founding of the China-Arab State Cooperation Forum in 2004, the paper describes China’s plan for a future, increasing cooperation. A strong emphasis is given to “the principle of mutual benefit, win-win and common development”, a mantra in Chinese view of diplomacy. In this paper, though, this concept assumes a more important meaning, as it aims to promote the “formation of a new type of international relations” in the area. It is also a new approach to security and counter-terrorism, as it recognises that “counter-terrorism needs comprehensive measures to address both the symptoms and root causes”. Economic development is here posed at the basis of peacebuilding and peacekeeping. Along with minor military measures, China committed itself to providing financial aid in support of regional militaries and capacity building, rather than an increased Chinese military presence, in order to fight terrorism.

Unsurprisingly, the focus of the paper lays on cooperation in trade and investments. As the document notes, “Arab countries as a whole have become China’s biggest supplier of crude oil”. Admitting the self-serving side of China’s win-win cooperation model, energy cooperation is given the preeminent feature in the pattern. This pattern is explained in detail in the document as a 1+2+3 cooperation pattern, with energy cooperation as the core, infrastructure construction and trade and investment facilitation as the two wings, and three high and new tech fields of nuclear energy, space satellite and new energy as the three breakthroughs.

As in any fair win-win cooperation, benefits have been promised to the counterpart too. As for trade, in the paper, China promises to complete negotiations for, and to sign at an early date, the China-Gulf Cooperation Council Free Trade Agreement, to include also “the entry of more non-oil products from Arab states into the Chinese market”, addressing a complaint often moved to China by its trading partners in the region. The main focus remains on investment cooperation and infrastructure construction, though.

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