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What to Take Away from Xi Jingping’s Middle East Visit

Last week, Chinese President Xi Jingping’s five-day trip to the Middle East, his first since attaining power three years ago, began on Tuesday in Saudi Arabia, included a stop in Egypt, and ended in Iran on Saturday. Here are the key takeaways from his trip.

Beijing’s A-political stance has traditionally adopted a non-interventionist outlook on world affairs, and this will continue for now as Beijing advocates for a peaceful resolution to the rising tensions between Tehran and Riyadh. Nonetheless, Chinese state-run media articulated that this minor, albeit crucial, component of its regional affairs agenda, would be given appropriate attention during his visit. “Although China never takes sides, it will be a rare opportunity for China to call for calm and restraint from both sides,” Chinese state-run media printed.

Addressing the business of increasing economic development, was the priority on Beijing’s agenda at all three stops.

The meeting with Saudi King Salman bin Abdulaziz Al Saud established a strategic partnership, and built on the $69.1 billion bilateral trade reached in 2015, with the signing of 14 energy and infrastructure agreements. The major economic highlight was the Yasref oil refinery, China’s largest investment project in the Kingdom, coming online,

Next, President Xi met with his Egyptian counterpart, Abdel Fattah el-Sisi, and inked 21 technical and economic agreements. Mr. Xi was present for starting the next stage of a joint Egypt-China “economic and industrial hub” to be constructed around the Suez Canal. Al Ahram, the state-run newspaper, reported that Chinese officials also signed a $1bn loan agreement to solidify Egypt’s foreign currency reserves, and agreed to open a $700m credit line with the National Bank to fund joint projects.

Finally, Mr. Xi became the first major world leader to visit Tehran since U.S. and European sanctions were lifted last week, therein, signifying to the world that in Iran, China means business. Beijing was Tehran’s largest bilateral trade partner at $51.8 million in 2014, and this number is projected to climb higher, as Mr. Xi met top Iranian leaders and finalized 17 energy, infrastructure, financial, and cultural agreements, and formed a “comprehensive strategic partnership.” IRNA reported that the world’s largest bank by total assets, Industrial and Commercial Bank of China, has moved to open branches in Iran.

President Xi held discussions with several key multilateral and regional organizations, including the Gulf Cooperation Council (GCC), the Arab League, and discussed the Asian Infrastructure Investment Bank (AIIB) and Shanghai Cooperation Organization.

In Saudi Arabia, Mr. Xi met with Abdul Latif Bin Rashid Al Zayani, Secretary General of the GCC, whose other members include Bahrain, Kuwait, Oman, Qatar, and the United Arab Emirates and agreed to establish a Free Trade Agreement later this year.

In Egypt Mr. Xi gave a speech to the Arab League where he elaborated on areas of China-Arab cooperation, including technology, investment, and trade. Last week, in recognition of 60 years of China-Arab relations, Beijing released an Arab Policy Paper, which outlined “policies and measures towards Arab states in the new era” and established future areas of cooperation, according to China’s Foreign Ministry.

All three countries President Xi visited are founding members of the Asian Infrastructure Investment Bank, a conglomeration similar to the World Bank, which develops infrastructure projects. He spoke to further developing these partnerships via future investment opportunities.

According to the Tehran Times, in the lead up to Mr. Xi’s Iran visit, Pang Sen, China’s ambassador to Iran, indicated the Shanghai Cooperation Organization, a regional block whose members include Russia, China, and others, and to which Iran seeks full membership, would be a topic of discussion.

Peace and stability remain the most critical factors to the success of Beijing’s One Belt-One Road plan, a grand strategy to connect China to the Middle East, Africa, and Europe via land and sea routes. Given that all three visited countries have agreed to participate in this endeavor, it is in the best future economic interest of all parties that relations, at the very least, be maintained, if not improved.

“The world today is undergoing profound and complex changes,” Xi penned in the Egyptian newspaper Al Ahram prior to his Cairo visit. “Global challenges are increasing. Global economic recovery remains difficult. Regional turmoil continues to flare up and the threat of terrorism is notably on the rise. This has made it ever more urgent for a new type of international relations to be built that is geared toward win-win cooperation.”

Bottom Line: Mr. Xi’s words, fortified by the fact that Beijing is the largest bilateral trade partner of Riyadh, Cairo, and Tehran, make clear that Middle Eastern leaders recognize the world has options other than the United States.