January 7, 2019

April 2019

China looks at the Mediterranean Region
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Chaos reigns in the Mediterranean region and that, according to Chinese commentators, provides some  opportunity and many more challenges. Greece joining the cooperation platform between Central and Eastern European Countries (CEEC) is surely a piece of positive news for China. However, the worsening of the relations between Iran and the United States continues to trouble Chinese observers and policymakers, especially after President Trump announced that the waiver to buy Iranian oil will be revoked. Moreover, the fall of Omar al-Bashir in Sudan and the turmoil in Libya are all worrying signals about the volatility of the situation in the eastern and southern parts of the region.

As the “16+1” became the “17+1”, the Global Times published an editorial arguing that Greece’s decision to join the other eastern European countries and China should be considered good news for China as well as the European Union (EU). [1] Clearly, Chinese journalists argue, Western media are wrong in portraying Chinese moves as attempts to split Europe. In particular, German politicians and journalists should abandon their strong ideological biases against the “17+1.” The countries that are part of that platform, including Greece, are rather backward and/or weak economically. Therefore, despite the symbolic value of having Greece on board, it is those countries that benefitted the most from a closer relationship with China. Greece is just the “icing on the cake.” On the contrary, the real source of tensions within the EU should be found in the different approaches to economic development and governance that still exist between northern and southern European countries. According to Wang Wei, the Vice Director of the European Studies Department of the China Institute of Contemporary International Relations, a tough stance vis-à-vis Germany will become a popular issue on the ramp-up to the elections in Greece in October. [2] Intra-EU friction, therefore, could increase.

What has already increased, on the other hand, is the tension between Iran and the United States. Like in previous months, Chinese experts continued to blame President Trump for pushing the Middle East to the verge of war. [3] The United States is less influential but more dangerous than ever as President Trump decided to escalate the confrontation with Iran after recognizing Israeli sovereignty over the Golan Heights. Despite all this, however, an editorial published by the Global Times basically reaffirms the line that was announced in November, when the United States withdrew from the Joint Comprehensive Plan of Action: although China opposes American unilateralism, Chinese interests should be protected and China should stay close to Iran,  China cannot pick a fight alone with the United States to defend Iran. [4]

At the same time, large Chinese state-owned oil companies are not the only firms suffering. The smaller, private companies operating in the middle eastern oil industry have also reached a bottleneck in their development. [5] A certain Mr. Zhou who works for a Chinese company based in Iraq told a reporter of the Global Times that his firm and other companies are facing problems in expanding the scope of their operations beyond Iraq. Indeed, while major Western and local competitors dominate the scene in Saudi Arabia and Kuwait, Chinese companies do not have the technology to work on high-pressure offshore gas fields, such as those in Qatar, and small and scattered oil fields like those in Oman and Egypt. This is why some have begun to explore alternative uses for their equipment. Zhongman Petroleum and Natural Gas Group, for example, have won a USD 46 million contract with the Egyptian government to drill 38 water wells. According to the journalist, given the scarcity of water in North Africa, drilling for water will become a new important business for Chinese companies.

From this point of view the comments of Zhang Jingwei, a visiting scholar at the Chongyang Institute for Financial Studies at Renmin University of China, on the decision of the House Judiciary Committee to pass the No Oil Producing and Exporting Cartels Act, commonly known as NOPEC, sound too optimistic. [6] Although Zhang believes that President Trump will veto the bill in order preserve the close relationship with Saudi Arabia, he pointed out that this is just one of the effects of America’s decreasing dependence on middle eastern oil. As soon as American policy toward the Middle East aligns with its energy interests, the central role of the US Dollar will lose its dominant position in the international oil energy market. The RMB, Zhang suggests at the very end of his article, could be a convenient alternative for both the producers and their customers. Until then, China is already benefitting from the development of the American shale industry as it contributes to push down the oil price.

There are problems also in another oil-producing country: Sudan. Ma Xinmin, the Chinese ambassador in Sudan, even went to visit the headquarters of Chinese mining companies and associations in the country to ensure that the fall of Omar al-Bashir did not create security problems for them. [7] Reportedly, Ma spoke with entrepreneurs on the behalf of “the Central Committee of the Communist Party of China, the State Council and all the relevant organs.” The companies responded by explaining to the ambassador the security measures they took vis-à-vis the volatile situation in the country.

Against this background, Chinese commentators have shown a mixed attitude toward the events in Sudan and in the region at large. [8] On the one hand, the ousting of Omar al-Bashir shows that the main problems that caused the people to take to the streets throughout the Middle East and North Africa in 2011 are far from being solved. The main reason for this is that those governments that remained in power have not learnt the lesson. Economic development and improved domestic governance are the only way to move forward. Therefore, we should expect more instability continue in the future. On the other hand, the protesters are somehow less focused on bringing down the government. The main demand from the people is a tangible improvement in their living conditions. If this is delivered, the ruling elites can stay. Hence, we should not fear the spread of chaos to those countries, like Saudi Arabia, Egypt, and the UAE, whose governments are investing much more in solving social and economic issues. Hence, Chinese scholars are reluctant to talk about an “Arab Spring 2.0.” [9] The problems are the same. One key reason why regime changes in Sudan and Algeria took place in 2019 and not in 2011 is that those countries can no longer use oil revenues to placate social discontent, either because the oil price is low or because the independence of South Sudan took away about 75% of the Sudanese oil resources. Unsurprisingly, the comments on the clashes between the forces led by Khalifa Haftar and those of Fayez al-Sarraj are far less nuanced, although the basic message is the same. To begin with, most of what is happening in the north African country was and is still caused by European meddling in Libyan domestic affairs. [10] While Obama at least admitted the mistake before stepping down, pointed out Niu Song of the Shanghai International Studies University (SISU), European countries are still fully engaged in creating chaos for their own selfish interest. At the same time, domestic forces decided to rely entirely on external support to gain power, instead of working to rebuild the country. Libya, he concluded, is today a terrible example of what can happen when local governments do not care about the situation of their own people and open the door to external forces.

The situation is difficult and complex and Chinese scholars are trying to help their government to design the right policies. [11] This is why experts from different research institutions gathered in Shanghai for the third edition of the “Shanghai Middle Eastern Affairs Forum” hosted by SISU. The fragments of the speech delivered by Yang Guang indicate that area studies have received renovated impetus as result of the request from the top leaders to improve the research work, the training of young scholars and the teaching of professionals. Such request was made by Xi Jinping in May 2016 during a symposium on social science and, more in detail, by Yang Jiechi during the inauguration of the China-Africa Institute in Beijing in April 2019. Today, the Middle East is an important theater where China is trying to create its own role as great power, commented the People’s Daily journalist who attended the conference.

[1] Shèpíng: “17+1” Duì zhěnggè ōuzhōu dōu shì jǐnshàngtiānhuā 社评: “17+1”对整个欧洲都是锦上添花 [Editorial: “17+1” is the icing on the cake for Europe.], Global Times, 13 April 2019, http://opinion.huanqiu.com/editorial/2019-04/14715026.html?agt=111.

[2] Liu Yue, Xī dé máodùn zhéshè ōuméng bùshì tiěbǎnyīkuài [Tensions between Greece and Germany reflect the cracks of the European Union], People’s Daily, 23 April 2019, http://world.people.com.cn/n1/2019/0423/c1002-31044261.html.  

[3] Li Jiabao, “中东火药桶”是否又被点燃?[Has the middle eastern “powder keg” been lit up again?], People Daily, 13 April 2019, http://paper.people.com.cn/rmrbhwb/html/2019-04/13/content_1919404.htm.

[4] Shèpíng: Měi yāoqiú tíng gòu yīlǎng shíyóu, zhōngguó rúhé yìngduì 社评:美要求停购伊朗石油,中国如何应对 [Comment: the United States demands the suspension of the purchase of Iranian oil, how China should react], Global Times, 22 April 2019, http://opinion.huanqiu.com/editorial/2019-04/14770911.html?agt=15425.

[5] Qu Xiangyu, Zhōngguó yóu fú qǐyè zài zhōngdōng dàyǒukěwéi 中国油服企业在中东大有可为 [Chinese oil service companies have great potential in the Middle East], Global Times, 25 april 2019, http://finance.huanqiu.com/caigc/2019-04/14785773.html?agt=111.

[6] Zhang Jingwei, Zhāngjìngwěi: Zhōngjié shíyóu měiyuán, shātè tóufàng de yānmùdàn 张敬伟:终结石油美元,沙特投放的烟幕弹 [Zhang Jingwei: the end of the petrodollar and the Saudi smoke bomb], National Business Daily, 9 april 2019, http://www.nbd.com.cn/articles/2019-04-09/1319516.html.

[7] Zhōngguó zhù sūdān dàshǐ mǎ xīnmín wèiwèn sūdān zhōng zī qǐyè bìng jiǎnchá yìngjí cuòshī luòshí qíngkuàng 中国驻苏丹大使马新民慰问苏丹中资企业并检查应急措施落实情况 [Chinese Ambassador to Sudan Ma Xinmin sympathizes with Chinese-funded enterprises in Sudan and checks the implementation of the emergency measures], Xinhua, 15 April 2019, http://www.xinhuanet.com/world/2019-04/15/c_1210108654.htm.

[8] Qi Xu, Sūdān zhèngjú dòngdàng: Zhōngdōng zhuǎnxíng gānggāng kāishǐ 苏丹政局动荡:中东转型刚刚开始 [Political situation in Sudan is chaotic: transition in the Middle East has just begun], Xinmin Evening News, 18 april 2019, http://newsxmwb.xinmin.cn/world/2019/04/18/31517217.html.

[9] Yù Xiǎoxuán, “Huī xīniú” jiǎodòng zhōngdōng běifēi zhèngzhì biànjú, zhōngwài zhuānjiā jī biàn zhēnzhèng zhuǎnxíng zhī lù “灰犀牛”搅动中东北非政治变局,中外专家激辩真正转型之路 ["Grey rhinos" trigger political change in the Middle East and North Africa, Chinese and foreign experts debate the evolving situation], The Paper, 25 April 2019, https://www.thepaper.cn/newsDetail_forward_3331382.

[10] Niu Song, Shéi wèi shēn xiàn zhànhuǒ de lìbǐyǎ fùzé? 谁为深陷战火的利比亚负责? [Who is to blame for the chaotic war in Libya?], Beijing Daily, 12 April 2019, http://views.ce.cn/view/ent/201904/12/t20190412_31841611.shtml.

[11] Wang Nan, “Zhuǎnxíng zhōng de zhōngdōng yǔ xīn shídài zhōngguó zhōngdōng wàijiāo” xuéshù yántǎo huì jǔxíng “转型中的中东与新时代中国中东外交”学术研讨会举行 [Conference on the "Middle East in the New Era and China's Middle East Diplomacy in Transition"], People’s Daily, 19 April 2019, http://world.people.com.cn/n1/2019/0419/c1002-31039927.html?from=singlemessage.

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