The Platform

Photo illustration by John Lyman

China has taken a page out of Henry Kissinger’s playbook.

Henry Kissinger must have had a déjà vu moment when he witnessed China brokering a peace deal between Saudi Arabia and Iran. But the tables have turned, and this triangular diplomacy isn’t being led by Washington but by Beijing. Much of the analysis has focused on the rise of China in the Middle East at the expense of the United States. But for China, business comes first; domestic affairs and human rights abuses in its partner countries doesn’t concern Beijing. Riyadh’s relations with Beijing are all about oil and economics.

Saudi Arabia is China’s largest trading partner in the Middle East and China’s largest crude oil supplier. In 2021, even when China’s overall oil imports declined for the first time in 20 years due to the pandemic, China still accounted for 27% of the country’s crude oil exports, increasing the overall volume by 3.4% to a record of 1.75 million barrels per day. Saudi Arabia has been the largest regional recipient of Chinese investments, equaling $43.5 billion between 2005 and 2021.

As the proverb goes, “enemy of my enemy is my friend.” China understands that very well, and here comes Iran. Beijing and Tehran are signatories to a 25-year cooperation agreement in 2021, which leverages Beijing to buy energy on the cheap in return for substantial investments in Iran’s economy.

Iran is isolated internationally, and with a crumbling economy due to sanctions, Chinese economic support is vital. According to the Chinese Ministry of Commerce, China has been Iran’s largest trading partner for 10 consecutive years. Iran is on track to formally become part of the Shanghai Cooperation Organization, an economic and security bloc led by China and Russia, in 2023.

While China has amnesia regarding human rights abuses in Iran and Saudi Arabia, and Russian follies in places like Ukraine, it has proven to be an all-weather friend. China is keeping Russia’s economy afloat. Trade between the two countries has increased by a third in 2022 to $190 billion. In the meantime, the growth of Russian exports to China outpaced that of imports, at 44%, as opposed to 14%. European markets have abandoned Russia for China. For instance, eleven out of the fourteen remaining brands in the Russian automobile market are Chinese. If this isn’t sufficient, in 2022, 75% of cell phones sold in Russia were Chinese.

As evident by now, China is significant to all three countries, along with the fact that undoubtedly China is the ‘world’s factory.’ At the same time, Saudi Arabia’s influence over OPEC is unmatched. Iran and Russia are not always necessarily on the same page on a whole host of issues, but their trade relations are improving. Take, for instance, the International North-South Transit Corridor. With the war in Ukraine, the corridor is now back in the spotlight, an initiative launched in the early 2000s. The rising use of the corridor has already led to a doubling in cargo transport. From January to March, cargo shipments exceeded 2.3 million tons. As for Saudi Arabia and Iran, its burgeoning friendship will need some time to blossom.

Chinese priorities have changed as Xi Jinping, the country’s president, believes that the world is “undergoing great changes unseen in a century,” with a rising East and a decline of the West. China has embraced diplomacy, but why? Isn’t Chinese debt diplomacy working well?

Rush Doshi answers this question in his book, The Long Game, which provides two strategies that rising states pursue to displace the hegemon. The first is to “blunt the hegemon’s exercise of those forms of control, particularly those extended over the rising states.” Now it’s easy to understand Chinese initiatives like the Belt and Road Initiative, and the creation of the largest trade deal in the world, the Regional Comprehensive Economic Partnership, and its military built-up.

The second is “to build control over others whether through coercive threats, consensual inducements, or rightful legitimacy.” Once countries are debt-laden, it’s time for the Chinese sales pitch. With the demise of Russia, which no longer has anything substantial to offer to its allies, the only other option is China. And for countries like Pakistan and South Africa, that is appealing.

Unlike the U.S., China effectively projects itself as a neutral peace broker with a philosophy of non-interference in the affairs of its allies. The creation of institutions like the Asian Infrastructure Investment Bank or initiatives like the Shanghai Cooperation Organization are effective efforts to increase China’s global influence on the back of perceived mistakes by the United States. As per Lowy’s annual Asia Power Index, China leads the U.S. in regional influence.

It’s time for major powers to rethink their strategies and the world order where an alliance of autocrats has formed, which are sitting on piles of natural resources, dominating the global energy market. Their influence is growing at the expense of liberal democracies.

Falguni Lalwani is currently pursuing a triple major in Economics, Media Studies, and Political Science from Christ University, Bengaluru, India.