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Reviving the Silk Road: Understanding the Middle East’s Role in China’s Belt and Road Initiative

The Communist Party of China (CPC) incorporated the Belt and Road Initiative (B&R), an ambitious, multi-national development strategy originally proposed by President Xi Jinping in 2013, into its constitution during the 19th CPC National Congress. On Tuesday, party officials pledged to create an amendment upholding “the principle of achieving shared growth through discussion and collaboration, and pursuing the Belt and Road Initiative” in conjunction with “Xi Jinping Thought,” the president’s manifesto on contemporary Chinese socialism.

The initiative aims to expand Chinese hegemony through two economic corridors, the “Silk Road Economic Belt” and the “21st-Century Maritime Silk Road,” which link 68 countries from New Zealand to Poland. In the future, Beijing’s network of bilateral development agreements will increase China’s political and financial clout abroad, but in the present, as domestic demand for construction stalls, the plan will provide alternative markets for China’s oversaturated steel, cement, and aluminum industries.

 Outline of the Belt and Road Initiative  Photo Courtesy: McKinsey&Company (July 2016)  

Outline of the Belt and Road Initiative

Photo Courtesy: McKinsey&Company (July 2016)
 

From a geopolitical perspective, the Middle East and North Africa region will prove critical to China’s plans and will function as a median point, of sorts, on Xi’s land-based and oceanic “Silk Roads.” China already enjoys productive trade relations with numerous MENA nations, and during his opening address at the 2014 China-Arab States Cooperation Forum, Xi pledged to increase China’s trade volume with Arab countries to $600 billion over the ensuing 10 years (from $240 billion in 2013).

However, if petrol prices continue to falter, then rentier states seeking to procure foreign investment will increasingly look to China, the world’s largest importer of oil and natural gas, for aid within and beyond their borders. In March, Saudi Arabia’s King Salman bin Abdulaziz al-Saud, in line with his son’s economic diversification platform, Saudi Vision 2030, agreed to a memorandum of understanding with Xi that secured 35 large-scale investment projects valued collectively at $65 billion dollars.

Similarly, Egypt has agreed to infrastructure deals with private Chinese companies worth an estimated $20 billion while the UAE, in addition to supplying critical ports along the 21st-Century Maritime Silk Road, is a founding member of the Asian Investment Infrastructure Bank—a multilateral, pan-Asian development firm.

In addition, investing in MENA private industry and infrastructure constitutes more than prudent business for Beijing, because by bolstering its allies’ economies, China can mitigate its political risk and exposure to economic shocks along both B&R routes. Poverty, extremism, and regime instability could all derail Xi’s efforts to create an efficient, streamlined Eurasian economy, and powerful GCC states—given their position as regional powers—will be depended upon to maintain the integrity of MENA borders.

China appreciates stability, both domestically and within its international sphere of influence, and, in all likelihood, will eventually call on Saudi Arabia to cease its embargo of Qatar and its proxy war with Iran in Yemen.

It remains to be seen, however, if China can preserve its political neutrality while simultaneously maintaining economic agreements with states such as Saudi Arabia, Iran, and Israel—countries with nonexistent, if not outright hostile, relations. Predictably, as Beijing extends its web of alliances, its hierarchy of obligations will increase proportionately. China has already chosen a side in the Syrian Civil War by siding with President Bashar al-Assad, an Iranian puppet, and vetoing UN sanctions against the regime over its use of chemical weapons.

Assad has promised China a prominent role in post-war Syrian reconstruction, which demonstrates that, from the outset, the B&R Initiative has always been less about philanthropy and more about spreading Chinese soft power throughout the world. For the foreseeable future, the Saudi-Iranian “cold war” will test Beijing’s diplomatic prowess as a hegemonic force.

Xi’s desire for a cohesive, Chinese-centric Eurasian economy starkly contrasts US President Donald Trump’s isolationist, America-first approach to international affairs. Ironically, many political economists have liked the B&R Initiative to the United States’ post-WWII Marshall Plan (albeit on a much larger scale) and are attuned to the the reality that, should the plan proceed without significant impediments, China could usurp the United States’ de facto status as the preeminent global power.

  President Xi meets President Rouhani in Tehran.   Photo Courtesy: STR/AFP/Getty Images (January 2016)

 President Xi meets President Rouhani in Tehran. 

Photo Courtesy: STR/AFP/Getty Images (January 2016)

“Pursuing protectionism is like locking oneself in a dark room,” Xi said in his January speech at the World Economic Forum. “Wind and rain may be kept outside, but so are light and air.”

Trump could learn from Xi’s poetic critique of isolationism. Instead of pulling out of multilateral organizations like UNESCO to please a singular MENA ally or implementing travel bans to appease a domestic base (in comparison, China is inviting Middle Eastern students en masse to study in Chinese universities), the US should invest broadly in foreign development and capacity building, lest it falls behind its legitimate, ambitious rival in the East.