June 2021

Among the most interesting topics discussed this month in the media published throughout the wider Mediterranean region, the crisis over the Grand Ethiopian Renaissance Dam between Egypt, Sudan and Ethiopia stands out. We also found a number of interesting information regarding the relations between the countries of region, China, the United States, and Europe.

The negotiations to resolve the diplomatic crisis between Egypt, Sudan, and Ethiopia over the Grand Ethiopian Renaissance Dam (GERD) seem to have reached an impasse during the latest round of talks among the parties involved and the African Union, with Addis Ababa announcing the beginning of the second filling of the dam in July 2021. In an interview with Akhbar el-Yom, the Ethiopian Ambassador Ali Hefni stated that “China greatly supports Ethiopia by increasing its investments and providing turbines for the dam.” [1] He also stressed that his country represents a gateway for China's access to the African continent and an opportunity to “consolidate the Chinese presence in this important region”. Similarly, el-Mogaz reported that the Chinese Foreign Minister Wang Yi expressed his government's support to “Ethiopia's right to defend its national security and to search for the most appropriate means to achieve developments.” [2]

Against this background, many Arab media outlets discussed Egypt's position in the matter. For instance, an article in al-Jazeera asked a number of experts whether Sino-Egyptian relations could prompt Egypt to demand a more active Chinese role in mediating the crisis and what, if any, leverage Egypt has on the subject. [3] Nadia Helmi, an expert in Asian affairs at Beni-Suef University, believes that the amount of Chinese investment in both Egypt and Ethiopia could make China the perfect mediator to “reach a satisfactory solution” for all parties. However, journalist Adel Sabri stated that China has much more interest in keeping good relations with Ethiopia because its investments in the country surpass those in both Egypt and Sudan. Therefore, Beijing will be pragmatic and likely will try to stay out of the dispute.

Islam Zaʿbal, writing for the Qatari news website Arabi21, does not agree. According to the journalist, the Nile crisis represents Egypt’s incapability to act on its “military threats to defend [its] water security.” [4] Moreover, the crisis would also signify the failure of Egypt’s policy of “diversification of alliances”. In fact, since the beginning of the al-Sisi presidency, the Arab country has sought strategic relations with several international actors, such as China, Saudi Arabia and the United Arab Emirates, often competing with its traditional allies, the United States and the European countries. All of these countries not only have strengthened their relations with Ethiopia in recent years, but are also involved in the GERD project in various degrees, thus leaving Egypt in a diplomatically isolated position.

In this context, there appear to be two trends in Egyptian media. On one hand, Egyptian public opinion seems to be quite frustrated with the stalled situation. As al-Quds al-Arabi reported in a review of Egyptian press authored by Hussam Abd al-Baseer, “the level of anxiety among the Egyptians is rising as the date set by Ethiopia to start the second filling (July 1st) comes closer,” [5] and it is strongly believed that the outcome of any future negotiation with Addis Ababa would not differ from those of the last decade. The review, therefore, argued that Egyptians have lost all trust in their allies, especially China, which is considered a non-neutral party in the crisis due to its interests in the Horn of Africa, and because it is “one of the upstream countries that have taken control, and is still seeking to control, the rivers that originate from its lands”.

On the other hand, Egypt still holds its ties with China in high consideration, and it is confident in its own ability to establish fruitful relations with different players. Referring to the global need to increase foreign direct investments to revive the economy in the post-Covid-19 era, the economic expert Muhannad Adly told al-Ahram Gate that the Egyptian economy stands at the crossroad of both China’s Belt and Road Initiative and the development plans of the G7 countries led by the United States. According to Adly, Cairo’s good relations with both sides “will guarantee a large and stable share of the direct investment quotas established for the region by both parties." [6]

The media of other countries, too, highlighted the different diplomatic approaches of the region to the competing powers, and their impact on the countries’ domestic and foreign policies, with some actors choosing to rely more heavily on China, while others shift back to, or maintain, a more West-oriented position.

Similarly to Egyptian statements, an article published by al-Sharq on Qatar’s participation to St. Petersburg Economic Forum, for example, stressed that Doha enjoys the same trust from the United States, China, and Russia, which allows the Arab sheikhdom to follow “an independent line” in its foreign policies, based mainly on the interests of its citizens. [7] In fact, Lulwa al-Khater, spokesperson for Qatar’s Ministry of Foreign Affairs, affirmed that her country does not see any contradiction in its relations with the US and Russia. Abdullah al-Dhaimi, Qatar's ambassador to China, said that “the State of Qatar believes in openness and cooperation between different countries and in working together to support pluralism, free trade, and building an open global economy”.

In this context, Italy’s position seems more blurry. In fact, if it is true that the Italian Premier Mario Draghi often expressed the need to strengthen trans-Atlantic ties against Chinese actions that constitute a “systemic challenge to the international order”. However, he also stressed that the United States military and security focus should be on the Mediterranean rather than on the Indo-Pacific region. Moreover, at the NATO Leaders’ Summit in Brussels, Draghi pointed out the necessity of maintaining an “autonomous European strategy” also towards Beijing. [8] It could be useful here to refer to a study published by the EU-China Chamber of Commerce that analyses the conditions for the decoupling of the European and Chinese economies. [9] According to the study, most European companies that operate in China gained profits in 2020, and look positively at the future. However, Beijing’s delay in implementing the requested reforms is worrisome to the European side, as European companies continue to be excluded from parts of the Chinese market. In any case, the report concludes that the decoupling of the European and Chinese, and American, economies will not happen quickly, as the price to pay to cut the chains of production, for example, would be too high.

Instead, the increasing Chinese, and, to a lesser extent, Turkish, presence in the Maghreb countries’ infrastructure and trade sectors, especially in Morocco and Algeria, seems to be putting these countries at odds with their historical, European partner: France. The Moroccan al-Binaa reported that Rabat’s efforts to reduce Paris’ weight on its economy is threatening French interests in the whole region. The newspaper also affirmed that even if France will enhance its economic support to the region by increasing its investment and imports, it is not likely to succeed in maintaining its leadership. This is because China and Turkey find less obstacles when investing in the North African country and offer more attractive offers. [10]

Among the other countries that underlined the necessary and continued partnership with China we found was Turkey, whose Dunya Gazetesi reported Erdogan’s announcement made just before his departure for the NATO Leaders’ Summit in Brussels for the signing of a new swap agreement with China worth USD 3.5 billion, in addition to the one worth USD 2.4 billion and already implemented. [11] Syria, too, wants more cooperation. The Minister of Local Administration and Environment reiterated Damascus’ wish for a more active participation of Chinese companies in the reconstruction phase, while stressing China’s engagement in Syria through its cooperation in the transportation and health sectors. [12] Emirati media also highlighted the positive outcomes of Sino-Emirati relations in the fields of trade, innovation and technology, and tourism (China is the first trading partner of the UAE for non-oil trade). [13]

Interestingly, the Spanish newspaper El País suggested that Spain should take the opportunity offered by China’s plan to achieve decarbonization by 2060 and push for a cooperation with the Asian power in the field of renewable energy and digital transition. [14] The article also stated that the now-frozen Comprehensive Agreement on Investments between Beijing and Brussels could prompt more European companies to do so. The same news outlet, however, also reported on the problems that many sectors of the Spanish industry, especially the automotive and agricultural, are facing vis-à-vis the “hoarding” of raw materials at the hand of “China and its trading partners”, that is causing shortages of elements such as lithium, steel, and iron, but also soybeans, and the consequent increase of prices and costs of production for Iberian companies. [15]

Israel shares the same concerns, as Daphne Maor and Hadar Kana, writing for the Israeli The Marker, pointed out. According to the authors, the shortage of primary goods, such as chemical and electric components and iron, caused delays in the production centers based in China. Together with the shortage of containers and cargo ships, this situation is creating “chaos in the global maritime transports”, with ships waiting docked in ports, in Israel, as well as Cyprus and the United States. [16] In addition, and as a consequence of this, “prices of sea transport have skyrocketed: in some cases, up to six times the prices before the pandemic.”

It is also noteworthy that Israel has recently joined a statement condemning China to the UN Human Rights Council in Geneva, following US pressures. According to Barak Ravid, this is a major change in policy for Tel Aviv that “in recent years has consistently refrained from criticizing China on human rights issues, let alone supporting moves against China in UN institutions." [17] He added that during the discussions on this matter the Ministry of Foreign Affairs raised some concerns over China’s possible reactions to the statement and, therefore, decided to not overly publicize Israel’s position.

We conclude this issue of the ChinaMed Observer reporting a small development in the dispute between the Greek government and the Chinese shipping company Cosco over the port of Piraeus. According to Kathimerini, although the details are still under work, the two parties will soon reach an agreement that would allow Cosco to receive the remaining 16% of the port shares, while continuing to implement the planned investment also after deadline of August 10. [18]