When China became a player in the Middle East less than four decades ago, Beijing adopted a smart policy of “balanced neutrality” to which it has remained faithful to this day. At the time, China’s dealings with Middle Eastern countries were limited to arms sales. During the eight-year long Iran-Iraq war, this balanced policy helped China sell six billion USD worth of weapons to both opposing parties Iran and Iraq.
However, the tide is changing for China with respect to the Middle East. Following its weapons sales in the 1980s, China became an importer of energy from Saudi Arabia and Iran in the 1990s, and then traded goods, invested, and later transferred modern technologies to both countries.
Saudi Arabia and Iran, two powerful rivals in the Middle East, are China’s main partners, and Beijing still maintains its initial balanced approach to them. It tries not to get involved in conflicts and disputes between the two and does not explicitly support either.
A Friend of All and An Enemy of None
China’s main goal in the Middle East is to trade and complement its Belt and Road Initiative (BRI) to maximize economic benefits. Unlike the US and the European Union, China does not condition its trade and technology transfer upon actions or inactions related to political conflict or human rights. Rather, it seeks an economic foothold without conflict over political problems and geopolitical rivalries between Middle Eastern countries. That is why Beijing has not involved itself in the rivalry between two long-time adversaries, Saudi Arabia and Iran. It has avoided alienating one in favor of the other, as Iran and Saudi Arabia severed their diplomatic relations.
In 2016, Iran-Saudi relations soured following the execution of a Shiite cleric, Sheikh Nimr Al-Nimr. Riyadh severed ties with Tehran on January 3, 2016, after angry Iranians attacked the Saudi embassy in Tehran. China defended neither side and maintained a neutral position as it urged restraint on the parties.
Chinese Foreign Ministry Spokesperson Hua Chunying said at a regular Press Conference, “Both Iran and Saudi Arabia are important and influential countries in the Middle East. The Chinese side would like to develop friendly and cooperative relations with the two in accordance with the Five Principles of Peaceful Co-existence, and jointly safeguard peace and stability of the region and beyond.”
China maintained its neutral position in tactical collaborations with the two opponents. On November 17, 2019, China held a joint naval exercise called “Blue Sword” with Saudi Arabia in Jeddah. It HYPERLINK “https://www.reuters.com/article/uk-china-saudi-military-idAFKBN1XU0AW”came as tensions in the Persian Gulf rose over recent attacks on oil tankers and a major drone assault on Saudi energy facilities. A few weeks later on December 27, China avoided the political controversy and launched a four-day joint military exercise with Russia and Iran in the Indian Ocean and the Gulf of Oman.
In terms of financial relations, China is trying to strike a relative balance vis-à-vis the two countries, insofar as sanctions on Iran will allow, based on its own interests. China accepted both Saudi Arabia and Iran as founding members of China’s new Asian Infrastructure Investment Bank in April 2015.Despite Iran being subject to US sanctions and six UN Security Council resolutions under Chapter VII of the United Nations Charter, Beijing made no distinction between the rivals and accepted both as founding members.
One of the most sensitive common concerns of Iran and Saudi Arabia is military capability, especially having access to both light and heavy weaponry. China has tried to strike a relatively delicate balance between the two countries so as not to be accused of militarily supporting one country to the detriment of the other. This military balance is very important from the standpoint of Middle Eastern countries, a factor of which China is well aware.
China played a significant role in the localization of Iranian weapons. Beijing provided its military technology to the Iranians, who were able to use it to build short-range missiles such as the Nazeat, Oghab, and even the long-range Shahab 3. In addition, in 2010, China helped Iran establish a plant to build Nasr anti-ship cruise missiles. These missiles are reported to be almost identical to the Chinese C-740.
Because Iran’s missile development might be challenged by its longtime rival, China desires to maintain its neutrality. It does not want to be accused of upsetting the military balance among the Middle East countries. In addition, the transfer of military technology could help strengthen Beijing’s presence in the Middle East.
On December 23, 2021, US intelligence agencies announced that Saudi Arabia, with the help of China, was producing solid-propellant ballistic missiles. This news was published by CNN with the help of satellite maps showing the missile factory constructed in the city of Ad Dawadimi near the capital, Riyadh.
Middle Eastern countries are in fierce competition for economic prosperity and hegemony. The United Arab Emirates (UAE) and Saudi Arabia, for example, are preparing for a post-oil economy. Iran has high hopes of investing in technology transfer and economic prosperity after the resumption of the nuclear deal (JCPOA). In this regard, China can play a significant role for Saudi Arabia and Iran, as long as Beijing can maintain its balancing act between the two rivals.
China has invested in the development of the 5G network. After Trump’s withdrawal from the JCPOA in 2018, the Swedish telecommunications company Ericsson was forced to leave Iran. Tehran and Ericsson had collaborated on the development of the country’s 5G network. Following Ericsson’s departure, Huawei, the Chinese telecommunications giant accused by the US and the UK of spying for the Chinese government, replaced Ericsson with a green light from the Chinese government in its 5G network development project. China’s network of advanced 5G technologies is 100 times faster than its fourth generation.
The US has forbidden its Persian Gulf allies, such as Saudi Arabia and the UAE, from developing Huawei 5G, but China has provided other technological tools to balance its relationship with Saudi Arabia. During the visit of Saudi Crown Prince Mohammed bin Salman to Beijing in 2017, the two sides pledged to develop space cooperation.
Under the agreement, the two countries intend to participate in the Chinese-led Chang’e-4 Moon mission. It is an advanced space project for landing and research on the lunar surface. In addition, China launched two Saudi Arabia reconnaissance satellites. In December 2018, and in March 2022, the two countries signed a memorandum of understanding for the development of space technology.
In the energy sector, given that Saudi Arabia and Iran are both energy exporters and the former supplies a larger percentage of China’s oil, Beijing has proven that it will keep both countries satisfied with its energy supply.
Due to regional animosities between Tehran and Riyadh, Saudi officials approached the Chinese after the UN Security Council Resolution 1929 in June 2010 to persuade them to support sanctions against Iran. The Saudis pledged to Chinese officials that they would guarantee oil supplies to China instead of Iran, so that Beijing could leave the Iranian energy market without worrying about meeting their energy needs.
Beijing did not accept the deal and continued to strengthen its trade with Iran until the volume of trade between the two countries increased from 21 billion USD in 2009 to 41 billion USD between 2010 and 2014.
For four decades, China has sought to pursue its economic goals in the Middle East, finding the best strategy to strike a balance between Middle Eastern countries such as rivals Saudi Arabia and Iran. However, it remains to be seen whether Beijing will be able to maintain a balanced approach between the two countries by changing geopolitical dynamics, or whether it will be forced to make a new choice.