China’s Economic Diplomacy Approach in the

Middle East Conflicts

Mordechai Chaziza
Department of Politics and Governance,
Ashkelon Academic College, Ashkelon, Israel
motih1308@gmail.com

This study analyses China’s economic diplomacy approach in the Middle East conflicts in order to explore the
following question: How does China use diplomatic means to protect and pursue commercial investments,
economic assets, and economic tools, and to advance its foreign policy goals in the Middle East conflict
zones? This study argues that despite its adherence to the principle of non-intervention, Beijing’s economic
diplomacy has a more flexible and pragmatic interpretive approach. Chinese economic diplomacy in the
Middle East uses its diplomatic resources to intervene as needed to safeguard its investments and assets,
and utilises economic incentives to promote its well-defined foreign policy goals in the region’s hotspots.

Keywords: China, Middle East, economic diplomacy, conflict, non-intervention

Introduction

The twenty-first century has seen a drastic expansion of Chinese overseas investment in
the Middle East (West Asia), in particular in energy, natural resource projects and dual-
use infrastructure (serving both civilian and military purposes). Within the framework
of its Belt and Road Initiative (BRI), China helps finance, operate and build necessary
infrastructure across the Middle East, among other regions. It has pledged to help the
Middle East countries develop infrastructure and invited them to become founding
members of the Asian Infrastructure Investment Bank (AIIB). Ten countries in the
region have consequently joined (Egypt, Israel, Iran, Jordan, Kuwait, Oman, Qatar,
Saudi Arabia, Turkey and the United Arab Emirates), and the promise of infrastructure
and development has entered into the calculation of some countries when they engage
with China in the latter’s peace-seeking efforts.

CHINA REPORT 55 : 1 (2019): 24–39

Sage Publications Los Angeles/London/New Delhi/Singapore/Washington DC/
Melbourne
DOI: 10.1177/0009445518818210
 China’s Economic Diplomacy Approach in the Middle East Conflicts 25

The principle of non-intervention is one of the China’s key traditional foreign and
security policy guidelines in the Middle East. Traditionally, the People’s Republic of
China’s (PRC) stance towards the region, as to all other regions of the world, has been
based on the principle of non-intervention in the internal affairs of other sovereign
countries (Shichor 2013). Beijing has gradually developed a prudent and pragmatic
case-by-case approach which underlines the extent to which its position and policies
on non-intervention, territorial integrity and sovereignty are conditional. Although the
principle of non-interference is a key guideline in China’s diplomatic work and a major
rhetorical tool, there has always been a degree of flexibility in how Beijing actually con-
ducts its foreign and security policy when it comes to non-intervention (Chen 2016).
Specifically, China does not involve itself in the internal affairs of other sovereign
countries unless its own national or economic interests (e.g., safety of its expand-
ing overseas interests, Chinese citizens and energy supply) are in danger or at risk
(Chaziza and Goldman 2016). Moreover, China has been paying more attention to
its international reputation in an effort to project a positive image as a reliable great
power or key stakeholder in the region. This gives China both a more visible regional
profile and enhanced national and international prestige (Potter 2013; Wang 2011).
Although in the past China was sceptical of peacekeeping operations under
the United Nations, it changed its approach in the 1980s, and in 1990, the first
Chinese observers took part in the United Nations Truce Supervision Organization
in the Middle East. Since then, China has taken part in UN peacekeeping operations
on the ground in Lebanon and has stationed military advisers in Syria (Oosterveld 2017).
China has also maintained a fleet in the Gulf of Aden in support of the anti-piracy
mission in the Arabian Seas. More than half of China’s peacekeeping complement
is based in the Middle East, principally patrolling off the Somali coast as part of a
UN-mandated anti-piracy campaign (Aronson 2016).
Furthermore, in 2016, Beijing built its first overseas naval base in Djibouti, a support
facility for the People’s Liberation Army Navy’s (PLAN) needs. According to the Chinese
government, the base in Djibouti will mainly serve as a rest and relaxation post for more
than 2,400 Chinese troops helping with anti-piracy, UN peacekeeping and humanitar-
ian rescue missions in the area (Fei 2017). On the other hand, the base in Djibouti
will also give China an experience to build more overseas military bases and expand its
sphere of influence in the region as well as provide a permanent maritime and aerial
springboard to deep operations in Africa and the Indian Ocean region (Singh 2015).
Mediation diplomacy has emerged as one of the central pillars of China’s foreign
policy objectives and practices, with Beijing deliberately positioning itself as a peace-
maker in the Middle East conflicts and crises (e.g., Syria, Yemen, Iran, Qatar, and the
Israeli-Palestinian peace process). Chinese diplomats and leaders have featured in diplo-
matic proposals to play a mediating role in some of these (Sun and Zoubir 2018). Beijing
also seeks to play a more constructive role in conflict resolution there (e.g., Iranian
nuclear crisis and Syrian civil war) by strengthening bilateral and multilateral coopera-
tion with other great powers and regional organisations (Chaziza 2018).

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26 Mordechai Chaziza

This study analyses China’s economic diplomacy (经济外交 jingji waijiao)

approach in the Middle East conflicts in order to explore the following question: how
does China use diplomatic means to protect its commercial interests and to advance
its foreign policy goals in the Middle East? This study argues that despite its adher-
ence to the principle of non-intervention, Beijing’s economic diplomacy has a more
flexible and pragmatic interpretive approach. Chinese economic diplomacy in the
Middle East uses diplomatic resources at different levels and intervenes using varied
approaches to pursue and protect its commercial investments and economic assets;
at the same time, it utilizes economic tools to advance its foreign policy goals in the
region’s conflict zones.

Economic Diplomacy

While in the past, Beijing tended to regard diplomacy and economics as separate
issues, since the 2000s, economic diplomacy has become an increasingly significant
discipline within Chinese foreign policy (Medeiros 2009). The Chinese concept of
economic diplomacy has been defined as the use of ‘trade, investment, and finance
policies to support China’s diplomatic, political, and strategic purposes, and focuses
on securing resources, expanding export markets, and promoting China’s soft power
to advance China’s economic development’ (Wang 2004).
Chinese economic diplomacy involves the full gamut of economic and financial
measures, including trade, investment and all forms of economic cooperation. It also
includes state and military diplomacy, along with whatever other policy promotes
economic profit, in order to access resources, markets, capital, technologies or skilled
labour for China’s economic benefit (Heath 2016). More broadly, its economic
diplomacy operates within the larger framework of China’s long-standing hope and
Chinese President Xi Jinping’s vision for restoring Beijing’s supposed lost national
greatness, consistent with the ‘Chinese dream’ which provides it with context and vision
(China Daily 2017). This approach predicates that commercial tools and activities
may serve diplomatic goals and objectives and vice versa. Beyond the commitment to
supporting national rejuvenation, the goals and instruments of economic diplomacy
remain flexible, depending on the requirements of China’s situation (Heath 2016).

China’s Economic Diplomacy Approach in

the Middle East Conflicts

Over the years, several conflicts and crises in the Middle East have interacted with
ethnic, religious and sectarian geopolitical factors and with major powers outside of
the region, and have become the most prominent issues affecting regional security

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 China’s Economic Diplomacy Approach in the Middle East Conflicts 27

and stability. Beijing, as a result of its expanding regional economic footprint, has
closely monitored the region, particularly the development of hotspot issues and the
attendant security risks. However, adhering to its long-standing non-intervention
policy, China has been avoiding direct involvement and evading clear-cut positions
on controversial issues.
Foremost among China’s interests in the Middle East is continued access to the
region’s energy resources on which its economy remains heavily dependent, making
China vulnerable to its volatile politics. About half of its oil imports, as well as a third
of its natural gas, originate from the Middle East, most of it from Gulf countries
(Workman 2018). Sino-Middle Eastern energy partnerships extend to petrochemical
and natural gas projects in the region and refinery projects in China itself.   
Second, Beijing’s commercial activities and ambitions in the region extend
far beyond the energy sector. The Middle East is also generating new investment
opportunities and contracts for infrastructure projects for Chinese firms as well
as providing a market for their products: China is now the largest source of the
region’s imports. In 2016, the bilateral trade volume between China and countries
in the region reached $228.39 billion (Gong 2017). Given its location on land and
shipping routes to Europe and Africa, the Middle East has become a critical trade
route between East and West and an important part of the Chinese international
networking launched through the BRI. In order to ensure reliable access for Chinese
commercial shipping, Beijing has invested in building a regional network of maritime
infrastructure and rail lines aimed at connecting China with Europe via Asia and
the Middle East (Qian 2016).
Third, China has established diplomatic relations and maintained friendly coopera-
tion with every Middle Eastern country, thus allowing Beijing to build influence with
regional powers (e.g., Saudi Arabia, Iran, Israel and Egypt) beyond the confines of its
immediate Asia–Pacific neighbourhood. Finally, China has a general interest in the
Middle East, as in other regions, to earn recognition as a legitimate and reliable great
power (Calabrese 2017). Thus, China’s multiple interests in the Middle East dictate that
it must show a greater commitment to the security and political stability of the region.
The turmoil in the Middle East has raised concern within the Chinese govern-
ment about the spread of Islamist ideology and the expansion of Islamic terrorism
and extremism. Specifically, China has been viewing with alarm the linkage between
Uyghur terrorism in Xinjiang and the increase in Islamist terrorist attacks in the region
and their impact on China’s national security (Gulmohamad 2014). It is similarly
apprehensive about the possible suspension or abandonment of lucrative contracts, as
well as damage to or destruction of investment assets, Chinese companies, tourists and
workers engaged in infrastructure, energy and other projects, who find themselves in
high-risk zones and conflict areas (Parello-Plesner and Duchâtel 2015).
In conflict regions where China has a significant presence in the form of assets,
investment, companies or citizens, it is sometimes forced to intervene in local affairs
instead of strictly abiding by its non-intervention principle. Although China has

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28 Mordechai Chaziza

historically played a minimal security or diplomatic role in the Middle East, its
non-intervention policy here, as elsewhere, has been more flexible, pragmatic and
experimental than is often portrayed. Heightened exposure to these diverse threats
has made it urgently necessary for China to develop and skilfully employ diplomatic
and military tools to respond to them. Beijing has become increasingly active on the
diplomatic front, chiefly through multilateral institutions such as the Arab League
and the China-Gulf Forum, and in recruiting Middle East countries as members of
the AIIB (Calabrese 2017).
Therefore, China’s involvement in resolving the Middle East conflicts is not a
matter of choice but arises out of the necessity of a rising power which is attempt-
ing to compete with the United States across multiple domains. China consistently
calls for conflict resolution through negotiation and dialogue (political settlement)
and vigorously promotes peace, cooperation and economic development under the
framework of the BRI (Gong 2017). China’s involvement has included contributing
to UN peacekeeping forces (e.g., Lebanon), passing UN Security Council resolutions
(e.g., Iran nuclear crisis), mediating between conflicting parties (e.g., Syrian govern-
ment and opposition leaders), appointing special envoys (e.g., as in the Syria crisis
and China’s special envoy on Middle East affairs) or hosting high-level dialogues
(Djallil 2011; Middle East Observer 2016; Ministry of Foreign Affairs, the People’s
Republic of China 2013; Ministry of National Defense of the People’s Republic of
China 2017; Reuters 2016).
The Chinese economic diplomacy approach in support of its foreign policy goals
includes four diplomatic measures identified in this article: protect citizens and invest-
ments; economic development and economic aid; punitive measures and economic
incentives; building or operating dual-use infrastructure.

Protect Citizens and Investments

The Middle East crises and disputes caused Beijing to realise the necessity of inter-
vening in local conflicts to protect its citizens and assets abroad. The complexity of
the Yemeni sectarian conflict, jeopardising Beijing’s economic investments and the
safety of Chinese citizens there, has manifested itself fully in the way the Chinese
non-interference policy attempts to balance the aforementioned interests.
According to the Chinese Ministry of Commerce, Beijing has 14 enterprises and
460 personnel in Yemen, with trade projects in oil extraction, telecommunication,
construction, roads and bridges, and fisheries (Lee 2015). Furthermore, Yemen exports
about 1.4–1.5 million barrels of Masila crude each month, mainly to China. Although
the volume is relatively small, China’s crude imports from Yemen in comparison to
that of 2014 increased 315 per cent in the first two months of 2015 (Reuters 2015a).
In addition, the intensification of sectarian warfare in Yemen could eventually threaten
China’s key Middle Eastern petroleum suppliers (Iran and Saudi Arabia).

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Moreover, the BRI has added a further economic and strategic dimension since the
BRI passes through the Bab al-Mandab Strait, controlled by Yemen, to the Red Sea.
The civil war in Yemen could lead to an obstruction of the waterway transport in the
Gulf of Aden or a blockade of the Bab al-Mandab Strait. Yemen’s geographic location
makes it important for China’s BRI and its energy security. This includes Yemen’s
proximity to the Horn of Africa, where Beijing has a substantial economic footprint,
and its location on the Gulf of Aden, which makes it a strategic location for the Suez
Canal (Taylor 2015). According to the US Energy Information Administration (EIA),
3.8 million barrels of oil and refined petroleum products pass through the Bab
al-Mandeb Strait each day on their way to Europe, Asia and the United States, making
it the world’s fourth busiest choke point (Rosen 2015).
In response to the Yemeni civil war, China’s navy evacuated 225 foreign nationals and
almost 600 Chinese citizens from Yemen’s southern port of Aden. This was the first time
that the Chinese navy was sent to rescue foreign citizens, and only the second time that
Beijing used warships to evacuate its own citizens from a conflict zone (BBC 2015).
Since the 1990s, China has launched several civilian evacuation missions, for example,
in 2011, from Libya, its largest mission ever (Zerba 2014). The evacuation of Chinese
citizens from Yemen demonstrated how Beijing’s economic diplomacy approach works
to protect commercial investments and Chinese citizens.
Since the Middle East is the most hotly contested region, challenged by wars, crises,
conflicts and extremist jihadi organisations, this poses a direct threat to the security of
Chinese energy investments and the safety of Chinese citizens. Chinese nationals often
find themselves in situations of danger due to crises or instability in their host nations.
Hence, the Chinese government finds itself increasingly engaged in managing non-
combatant evacuation operations throughout the Middle East. For example, during
the Arab Spring uprisings, China rescued 1,800 citizens from Egypt and 2,000 from
Syria (Duchatel, Brauner and Zhou 2014).
China has also actively mediated between government representatives and the oppo-
sition (e.g., in Syria or Yemen) in order to protect its citizens and assets in conflict zones
(Lee 2015; Xinhua 2017c). Chinese economic diplomacy is interested in continuing to
advance diplomatic and economic relations with the host country governments, while
engaging in parallel with opposition and rebel groups. This approach could facilitate
China’s creation of a stable political environment for its citizens and assets, while it
could also help to hedge against uncertainties brought about by regime changes and
identify when certain regions in a country are under the de facto control of opposition
forces such as the Kurds or the Taliban (Ramani 2017).
Besides, China played a pivotal role throughout the Iranian nuclear negotiations,
using diplomatic efforts along with Russia to water down the United Nations Security
Council (UNSC) sanctions; it also served as a critical lifeline to the Iranian economy
and the stability of the Iranian regime. For instance, Beijing supported UN Security
Council Resolution 1929 only after softening it to protect China’s economic interests
and to reduce damage to Iran’s overall economy. According to The Wall Street Journal,

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30 Mordechai Chaziza

Chinese companies were able to leverage US sanctions to achieve discounted rates

from Iran for fuel oil and then configured refineries to process the fuel oil into more
valuable fuels (Ma and Tracy 2013). China will also continue to be a critical player
in the implementation and maintenance of the Joint Comprehensive Plan of Action
(JCPOA) in the decade to come (Almond 2016).
After the US President, Donald Trump, initially decided to leave the nuclear deal
with Iran intact, the Foreign Ministry spokesman, Geng Shuang, said China would
‘maintain communication with all parties and continue to protect and execute the
agreement fully’ (Lo 2018). More importantly, a failure of the JCPOA agreement would
damage China’s significant economic relations and energy trading with Iran, which were
greatly expedited by the lifting of sanctions (South China Morning Post 2017). China is
keen to establish a stable environment that will benefit its infrastructure investments in
the region. In this respect, the JCPOA survival is inextricably linked to Beijing’s BRI.

Economic Development and Economic Aid

China is in the unique position of being able to offer the conflicting parties in the
Middle East incentives in the form of substantial packages of economic development
and economic/humanitarian aid in order to lure them away from armed conflict.
With its economic resources, commercial banks and state-owned companies, China
is becoming more skilful at using economic instruments to support its diplomatic
efforts to resolve conflicts, giving it entrée to all the major players in the international
and regional arena (Yang 2017).
These economic incentives could have a transformative political, economic and
social impact on the Middle East in the future. Chinese President Xi Jinping, in a
speech before the Arab League in Cairo in January 2016, stated the guiding principles
for jointly building the BRI with the Middle East and stressed that Beijing should be
the ‘builder of regional peace, promoter of development, booster of industrialization,
supporter of stability, and partner of people-to-people exchanges in the Middle East’.
According to President Xi, the Middle East turmoil stems from stalled economic
development so that the ultimate solution may depend on further economic develop-
ment (China Daily 2016).
Indeed, Beijing has already significantly invested in economic terms in many coun-
tries in the Middle East, surpassing the EU, Russia and the United States as the most
important trade partner in several countries (Oosterveld 2017). For instance, China
became Saudi Arabia’s largest trading partner in 2016 ($42.3 billion), and the latter
has been China’s biggest crude oil supplier and largest trading partner in western Asia
(Xia and Wang 2017). In 2017, during his visit to Saudi Arabia, the Chinese President
signed a memorandum of understanding (MoU) on production capacity and invest-
ment cooperation covering 35 projects and involving $65 billion (An 2017). Moreover,
Chinese state-owned oil companies, PetroChina and Sinopec, have already expressed

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 China’s Economic Diplomacy Approach in the Middle East Conflicts 31

interest in a direct purchase of 5 per cent of Saudi Aramco in a deal that could raise
$100 billion (El Gamal and Lawler 2017).
The further roll out of China’s BRI is expected to further boost China’s invest-
ments and economic ties with the Middle East, which is an important link in
the BRI’s implementation and success. During his visit there in January 2017,
President Xi pledged $55 billion in investment and loans, including the establish-
ment of a common investment fund worth $20 billion for the UAE and Qatar, and
signed deals worth $15 billion with Egypt (The National 2016). Moreover, on his
January 2016 visit to Tehran, the Chinese President and his Iranian counterpart
agreed to a 10-year program to raise Chinese-Iranian bilateral trade to $600 billion
(Chu and Shen 2018).
In addition, within the BRI framework, China is planning the construction of
industrial cities: in Oman, China plans to invest $10.7 billion to transform Duqm,
a fishing village situated between the Gulfs of Oman and Aden, into an industrial
centre (Jabarkhyl 2017). China considers Egypt, one of the five stakeholders most open
to BRI, a ‘pivot’ or ‘hub’ and focuses on synergies between the national development
strategy and the new Maritime Silk Road Initiative (MSRI). Thus, China is one of
the largest foreign investors in the new Suez Canal Economic Zone (SCZone), where
86 Chinese companies have over $1.1 billion in investments (Arab Finance 2017).
Because of China’s consistent belief that stalled socio-economic development is
one underlying reason for conflicts in the Middle East, the focus of its diplomacy is
to try and improve this situation (China Daily 2016). For instance, China and Syria
began discussing large-scale investment infrastructure projects to rebuild post-war
Syria and to link the country to the BRI (Escobar 2017). According to the Iraqi
ambassador to China, Ahmed Tahseen Berwari, China has also been actively involved
in Iraq’s post-war reconstruction and in helping rebuild the country’s infrastructure,
including generous financial support to help the Iraqi government rebuild the areas
liberated from ISIS (Iraqi News 2017).
China has also provided economic assistance to countries involved in conflict and
humanitarian crisis such as Palestine, Syria, Yemen and other hot-spots (Xinhua 2015,
2017a). At the eighth ministerial meeting of the China-Arab States Cooperation Forum
in Beijing, President Xi promised $20 billion in loans to help Arab states in economic
reconstruction and pledged that China will provide Palestinians with more than
$15 million in aid as part of a plan to give Arab states more than $23 billion in lines
of credit, loans and humanitarian assistance for economic development. Additionally,
Syria, Yemen, Jordan and Lebanon would receive $91 million in humanitarian
assistance (Zhou 2018).
Chinese economic diplomacy uses economic development and humanitarian aid
both to protect and pursue its commercial investments and economic assets and to
project China’s image as a responsible power working to improve socio-economic
development through cooperation. This new chapter in Beijing’s regional diplomacy
bears a distinctive Chinese style and characteristics.

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32 Mordechai Chaziza

Punitive Measures and Economic Incentives

China’s economic diplomacy approach uses both punitive measures and economic
incentives to respond to regional crises and to try and resolve the Middle East conflicts,
particularly where China is involved. This is especially reflected in countries under
international isolation that rely on China as a major destination for exports and source
of investment. Beijing has come under criticism from the international community
for supporting these regimes, and accordingly, it has become impatient with these
countries’ resistance to collaborating with international institutions (Yang 2017).
The Iranian nuclear crisis is a perfect illustration of the Chinese approach using
punitive measures and economic incentives. China has firmly opposed Iran’s nuclear
program while safeguarding its economic and energy interests in the country. China
played a constructive role in trying to direct the increasing tensions over the Iranian
nuclear program towards negotiations and to avoid sanctions on Iranian oil and gas
production. Beijing put much effort into easing sanctions on the whole but avoided
clashes with Washington, which was eager to place heavy sanctions on Tehran and
even considered military involvement (Sahakyan 2017). When the Western countries
imposed sanctions against Iran to seek a solution to the nuclear crisis, Chinese oil
companies were able to win bids for developing large oil fields in Iran, securing their
own national interests (Chunshan 2013).
After the US-imposed unilateral sanctions on Iran in late 2010, two of China’s
top energy companies, China National Petroleum Corporation (CNPC) and China
National Offshore Oil Corporation Limited (CNOOC Ltd), worked to obtain greater
access to the US energy sector (Chen 2010). China decided to increase the pressure
on Tehran and to slow its energy investment from late 2010 until late 2013; this was
aimed at easing tension with the Obama administration and cutting the risk of US
sanctions on Chinese oil firms (Chen and Buckley 2011). In 2011, 11 per cent of
China’s total crude oil imports were from Iran, but in 2012, this dropped by 20 per
cent, due to the United States and Western countries’ imposition of nuclear-related
sanctions on Iran. In 2012 and 2013, Beijing’s purchases from Iran fell to just 8 per
cent of its total crude oil imports (Thirarath 2016).
Nonetheless, as the Iranian nuclear talks progressed in late 2013, China wanted to
incentivise Tehran and thus doubled its investment in an Iranian infrastructure project
and restored crude oil imports to pre-sanction levels (BBC 2014). In 2014, these
imports increased by 28 per cent, but the numbers have remained relatively steady since
(Thirarath 2016). The Chinese economic incentives were used to encourage Tehran
to continue nuclear talks and resolve the dispute over its nuclear activities (Daily
Mail 2015). Moreover, after Iran signed the JCPOA that lifted the sanctions, and it
became important as a central way station in the BRI project, both countries agreed to
increase trade to $600 billion in the following decade (Shichor 2016). At the same time,
China supports Iran’s membership in the Shanghai Cooperation Organisation (SCO)
and invited Tehran to become a founding member of the AIIB (Reuters 2015b, 2017).

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 China’s Economic Diplomacy Approach in the Middle East Conflicts 33

Building or Operating Dual-use Infrastructure

Since the Chinese economy remains heavily dependent on Middle Eastern oil, it is
essential to protect BRI infrastructure and key sea lines of communication (SLOCs), as
well as to increase its military presence in the Middle East to create a corridor to secure
its economic interests along the littoral stretching all the way to Africa and European
markets. Accordingly, Chinese economic diplomacy in the Middle East promotes
heavy investment in building and operating dual-use infrastructure, for example, ports,
railways, etc., that can serve both civilian and military purposes.
Chinese firms are winning contracts for engineering, construction and infrastructure
development projects in the region, such as the Saudi–China Industrial Cluster (Jizan),
the China–Oman Industrial Park in Duqm, the China–UAE Production Capacity
Demonstration Zone and the China–Egypt Suez Economic and Trade Cooperation
Zone (Xinhua 2017b). By participating in these economic projects, China hopes to
promote both economic interests as well as achieve strategic and security aims.
Beijing is building and operating dual-use infrastructure (e.g., roads, tunnels, ports
and railways) with important connectivity points along the sea lanes from the South
China Sea and the Indian Ocean to the Middle East and Africa to protect China’s
energy interests. This is most recently observable in China’s MSRI that uses the Middle
East as a crucial economic bridge for Europe and Asia. It has become a typical practice
that China first secures commercial ownership over strategic trading ports and later
turns it into military or dual usage, as it did with Gwadar in Pakistan, Piraeus in
Greece, Colombo in Sri Lanka and Djibouti in the Horn of Africa (Izzadeen 2017).
Chinese companies have also funded and built roads, bridges and tunnels across
the region. In Israel, to promote the MSRI, Chinese enterprises have been involved
in several large national infrastructure projects, including roads, tunnels, ports and
railways, currently under construction. In the coming years, Chinese companies
will build and manage transport projects totalling tens of billions of dollars. China’s
Harbor Pan Mediterranean Engineering Company (PMEC) is building a private port
alongside the existing one in the southern city of Ashdod on Israel’s Mediterranean
coast, and Shanghai International Port Group (SIPG) has won a 25-year license to
operate a deep-sea private port planned in the northern city of Haifa (Theofanis and
Boile 2015).
China has also expressed interest in investing in a proposed railway connecting
the Red Sea with the Mediterranean (the ‘Red-Med’ railway) that could serve as an
alternative or complementary route for the Suez Canal (Hindy 2017). In February
2016, the first cargo train from China arrived in Tehran, part of a Chinese initiative
to revive the ancient Silk Road used by traders to travel between Europe and East Asia
(Xinhua 2016). This network of facilities (e.g., roads, tunnels, ports and railways) in
Israel has a genuine commercial dimension in supporting China’s large merchant fleet,
as Beijing seeks to build a web of economic connections linking China with Central
Asia, the Middle East, Africa and Europe. Nevertheless, much of it could also be

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34 Mordechai Chaziza

used to support increasing power-projection operations in the region by the People’s

Liberation Army Navy.
Egypt is also crucial to the BRI because of its strategic location connecting Africa
and Asia and being an Asian portal for the African and Arab worlds and an African
portal for Europe through the Mediterranean. China’s state-owned shipping compa-
nies have invested heavily in ports along the Suez Canal Corridor, from the Gulf of
Suez to Port Said. In 2005, Hutchison Port Holdings acquired a 50 per cent share in
a joint venture with Alexandria Port Authority to construct, operate and manage two
container terminals in the ports of Alexandria and El Dekheila on Egypt’s northern
Mediterranean coast (Eran 2016).
In Port Said, the China Ocean Shipping Company (COSCO), owns a 20 per cent
share in Maersk’s container facility under a 49-year concession. COSCO invested
$185.6 million in a joint venture to operate and manage the Suez Canal Container
Terminal (SCCT) in Port Said’s East Port, located in the western Sinai Peninsula at
the northern end of the Canal (Scott 2015). The Chinese Harbor State Company
(CHEC) invested $219 million to construct a 1200 m quay in Port Said’s East Port
and al-Adabiya port at the Suez Canal’s southern end (Scott 2014). China is also one
of the largest foreign investors in the SCZone, and 86 Chinese companies have invest-
ments totalling more than $1.1 billion in the area (Arab Finance 2017).
In situations short of military conflict, these Chinese dual-use infrastructure projects
in Egypt could be used for military logistical support. China will be able to exploit the
network of military and dual-use facilities it is establishing in the region to support
an enhanced military presence in Africa and to shape the Mediterranean Sea security
environment in ways that are deleterious to the United States and allied interests.

Conclusion

The rapid expansion of China’s commercial investments, economic assets and energy
supply from resources overseas constitute some of Beijing’s core interests, which are
becoming increasingly pressing and tangible, especially since they pertain to continued
domestic modernisation requirements. When these interests are jeopardised, China’s
foreign policy musters its diplomatic resources and economic diplomacy to defend and
pursue its commercial, political and diplomatic interests. This could be seen in the last
decade, when China conducted non-combatant evacuation operations in Lebanon in
2006, Egypt in 2011, Syria in 2011 and 2013 and Yemen in 2015.
With the continued growth of Beijing’s economic interests and the steady expansion
of its overseas investment, the Middle East has progressively and inevitably become
the converging point and crucial part of China’s BRI. Nevertheless, the Middle East
disputes represent grave regional problems with global repercussions.
Hence, China has begun to participate, albeit cautiously, in the settlement of these
disputes in order to safeguard its expanding overseas interests, its own citizens and

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its energy supply, while discreetly expanding its regional political influence. Beijing’s
involvement in the Middle Eastern conflicts preserves a degree of neutrality and even
handedness, without either becoming too deeply involved in substantive engagement
and mediation or substantially changing its long-standing non-intervention policy
(Alterman and Garver 2008: 19). In fact, China’s leaders themselves admit that the
country is unable to allocate significant resources to deal with the Middle East’s
complex problems (Niu 2013: 52).
China’s economic diplomacy approach in the Middle East operates in four tiers:
protect citizens and investments, economic development and economic aid, punitive
measures and economic incentives, building or operating dual-use infrastructure.
This approach, characterised by extreme flexibility and pragmatism, is governed by
two factors. First, regional disputes and instability force Beijing to intervene diplomati-
cally in local conflicts to protect its commercial interests, citizens, energy supply and
assets. Second, China’s diplomacy in the Middle East conflict zones uses commercial
instruments and economic tools to advance its foreign policy goals and to facilitate its
efforts to resolve conflicts. This approach bolsters its image as a reliable great power
involved in conflict resolution and peacebuilding and can enhance its international
image, thus increasing the country’s soft power.
Nevertheless, China’s engagement in the Middle East is relatively new and has
only recently become part of China’s general diplomatic priorities, far behind China’s
relations with the great powers and even behind other areas (e.g., sub-Saharan Africa
and Latin America). Thus, the economic diplomatic resources that Beijing has devoted
to its diplomacy in the Middle East are still quite limited.

Declaration of Conflicting Interests

The author declared no potential conflicts of interest with respect to the research,
authorship and/or publication of this article.

Funding

The author received no financial support for the research, authorship and/or publica-
tion of this article.

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