23 October 2016
Xi Jinping meets Iranian President Hassan Rouhani during a visit to Tehran on Jan. 23. Iran will not forget "friends who helped us" in a difficult time, Rouhani said. Photo: Reuters
Xi Jinping meets Iranian President Hassan Rouhani during a visit to Tehran on Jan. 23. Iran will not forget "friends who helped us" in a difficult time, Rouhani said. Photo: Reuters

Xi’s Middle East trip was all about business

Chinese President Xi Jinping’s trip to the Middle East last month came amid a difficult time for the region.

Saudi Arabia is struggling due to a plunge in oil prices, rapidly rising debt and a war against Yemen. In Egypt, opposition is growing against the perceived successors of President Hosni Mubarak’s three-decade long rule. Iran, meanwhile, is at a crossroads as sanctions have been lifted following long years of international isolation.

In one way or another, all three countries are also involved in Syria’s civil war, battles against the Islamic State, and regional conflicts — along with Russia, the US and European powers.

The Sunni-Shi’a friction, which contributes to regional rivalries, has split several Arab states internally and has been historically manipulated by foreign powers.

Xi’s tour signaled a shift away from the “divide and rule” colonial legacies, focusing instead on economic development.

Economic development with Chinese characteristics

In his first stop in Riyadh, Saudi Arabia, Xi met Saudi King Salman bin Abdulaziz Al Saud and Deputy Crown Prince Mohammad bin Salman. It was the climax of a longstanding rapprochement. Saudi Arabia established diplomatic relations with China only after the Cold War in 1990. By the early part of this decade, China supplanted the US as Saudi Arabia’s largest crude oil client.

At the same time, bilateral trade has soared to US$74 billion. China is Saudi Arabia’s largest trade partner. During Xi’s visit, Saudi Aramco and China’s Sinopec signed a US$1.5 billion agreement for strategic cooperation. Beijing also plays a role among Saudi Arabia’s military suppliers.

In Egypt, Xi met President Abdel Fattah al-Sisi amid Cairo’s controversial measures to suppress the 4-year anniversary of the 2011 uprising. Egypt was the first country in Africa and the Arab world to establish diplomatic relationship with China in 1956. Nevertheless, bilateral strategic cooperation was initiated only in 1999 and a comprehensive strategic relationship two years ago.

In 2014, total bilateral trade amounted to US$12 billion. That’s when Beijing established a US$100 billion economic and trade cooperation zone in Egypt. China is discussing potential investments in large Egyptian infrastructure projects. Beijing is also expected to lend Egypt’s central bank US$1 billion to assist its efforts to shore up foreign reserves.

President Xi’s last stop was Tehran, where he met his Iranian counterpart Hassan Rouhani and the supreme leader Ayatollah Ali Khamenei. Since 2011, China has been Iran’s leading customer for oil exports, even as the West ramped up sanctions against Tehran. Iran, said President Rouhani, would not forget “friends who helped us” in a difficult time.

In 2014, bilateral trade amounted to US$52 billion. China is Iran’s largest trade partner. In Tehran, the two countries opened a “new chapter” in bilateral ties by agreeing to expand trade to US$600 billion in the next decade. To Beijing, Iran is a critical hub along the new Silk Road route. To Tehran, China means great economic opportunities in the post-sanctions era.

In brief, President Xi’s three-nation tour codified China’s presence in the Middle East as a major energy buyer, large importer, infrastructure builder, and peace broker.

For more of Dr. Dan Steinbock’s articles, see

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Dr Dan Steinbock is the research director of international business at the India, China and America Institute (USA) and a visiting fellow at the Shanghai Institutes for International Studies (China) and at EU Center (Singapore).

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