China’s Belt and Road Initiative: Implications for the Middle East

Abstract

This article examines the geopolitical and economic implications of the Belt and Road Initiative for the Middle East. It locates the BRI within the region’s politics and examines the opportunities that the initiative offers for the region, as well as its inherent risks and challenges. It argues that the BRI is not merely an economic project as framed by Beijing, but that it represents a new stage in China’s engagement with the region, and—if fully implemented—could have wide geopolitical implications. The Middle East has the potential to contribute immensely to China’s sustained growth by addressing its energy security, supporting China’s role as a ‘megatrader’, and, more importantly, driving China’s efforts to become a global maritime power and monetary power by internationalizing the Renminbi (RMB). Thus, the BRI could have wide implications for the Middle East. Far from being a win-win project for all, the BRI will likely benefit some countries in the region more than others. Iran stands ready to benefit most. The BRI will likely increase the strategic importance of the Suez Canal and could potentially undermine the importance of some logistic hubs in the Middle East in favour of other trade hubs in Central Asia.

Notes

¹ According to Lin (2013), Beijing has decided to soften BRI from ‘strategy’ to initiative in order to avoid provoking unnecessary suspicion and so as to invite reciprocal engagement from other partners along the BRI. His views are based on personal communication with two senior Chinese academics.

² Although the US announced on 9 May 2018 withdrawal from the Joint Comprehensive Plan of Action (i.e. the nuclear deal) with Iran and initiating new sanctions, this does not mean that the deal is dead since there are other parties to the agreement including Britain, France, Russia, China and Germany. The parties have so far refrained from withdrawing from the deal. On 17 May 2018 the European Commission even announced its intention to implement the blocking statute of 1996 to declare the US sanctions against Iran illegal in Europe and ban European citizens and companies from complying with them. The Commission also instructed the European Investment Bank to facilitate European companies' investment in Iran (Reuters 2018a). More importantly, China (which has an inherent interest in lifting the sanctions in Iran particularly that it has imported third of its oil imports from Iran this year) has announced that all parties must continue to abide by the agreement (Egan 2018, Reuters 2018b).

³ On 9 May 2018 the US announced withdrawing from the Joint Comprehensive Plan of Action (i.e. the nuclear deal) with Iran and initiating new sanctions.

⁴ According to media sources, President Xi Jinping’s visit to the ME was originally planned for Egypt, Saudi Arabia and Pakistan and was postponed several times because of the tensions in Yemen. Yet, as soon as the sanctions were lifted, the visit was arranged, and President Xi was the first foreign leader to visit Iran.