November 2020

The Mediterranean Region looks at China
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The search through the media published in the wider Mediterranean region brought to light a series of very interesting news, especially from Iraq, Greece, Israel, and Turkey.

The mystery continues in Iraq regarding the fate of the so-called “oil-for-reconstruction” agreement signed in late 2019 between the then-Prime Minister, Adel Abdul Mahdi, and his Chinese counterpart, Premier Li Keqiang, in Beijing. As we have reported in the past, Iraqi MPs have stated that the government has been under great pressure from the United States to cancel the deal with the Chinese. Iraqi journalists, too, have expressed skepticism about its future. Against this background, the Iraqi Minister of Planning, Khaled Battal Al-Najm, stated in early November that the deal was not over. [1] It was simply delayed because of Covid-19 and, according to Al-Najm, “the negotiations moved from discussions to implementation, and we will soon announce the start of its implementation.” Moreover, Al-Najm denied that the agreement recently signed by Iraq and Egypt is a substitute for that with China. Mazhar Muhammad Saleh, economic adviser to the Prime Minister, added on November 23 that the budget of the government for the fiscal year 2021 will include the allocation of resources coming from the agreement with China. [2] Talking with journalists of al-Sabah, Saleh stated that “the current year 2020 has witnessed two main problems in the implementation of the agreement with Beijing. The first is the closure of the Chinese economy and its isolation from the world due to the coronavirus. The second is the non-approval of any new government project in Iraq during the current year, due to lack of legislation on the federal budget, including the budget allocated for investments. The stumbling in the implementation of the agreement, for what Iraq is concerned, comes as a result of exceptionally difficult financial conditions, due to the deterioration of oil markets, low budget revenues, and the rise of an unexpected large deficit, financed through two borrowing laws. This changed the priorities of the government’s spending in this exceptional fiscal year.” Yet, widespread criticism remains. The deputy of the al-Sadiqun Parliamentary Bloc, Thamer Dhiban, affirmed that the government’s statements regarding the Chinese agreement are meant to illude public opinion and hide the fact that a part of the money has already been withdrawn to cover the salary of public employees. [3] According to Dhiban, the agreement with China could have played a key role in reviving the Iraqi economy. While it is not clear what the fate of the deal will be, it is evident that the Iraqi government regards China as an important economic partner. Indeed, it has become official that Iraqi authorities have contacted Chinese companies possibly to take over the South Korean firm, Daewoo, for the construction of the al-Faw Port in Faw, in the southern province of Basra. [4] The port is considered the country’s most important outlet to the Gulf and Iraqis have been looking forward to establishing it for many years, given its promising economic potential for the country. The agreement with Daewoo was that the company will implement the project, with a navigation canal at a depth of 19.8 meters, at a total cost of USD 2.37 billion, in three years. Daewoo later asked to increase the price to USD 2.8 billion.

Ports are the common thread in this issue of the ChinaMed Observer as we move to Israel and Greece. In Haifa, Globes’ journalists were told by a “source in the shipping industry” that the arrival of Joe Biden in the White House is a source of uncertainty for the future of Haifa, after the Trump administration has repeatedly pressed the Israeli government to limit or exclude Chinese presence in Israel’s infrastructure. [5] Moreover, while many welcomed the interest of many international companies towards the old Port of Haifa, it is unknown how the situation of the Shanghai International Port Group (SIPG)-controlled new Haifa Bayport container terminal will evolve. According to Chinese sources mentioned in the article, the new container terminal should be operated in two stages. In the first, the terminal will manage about 800,000 containers per year. In the second phase, 700,000 containers per year will be added. SIPG is reportedly aiming to bring its best technologies and practices to Haifa to showcase its capabilities as it looks for other projects overseas. The journalists point to key issues that the Israeli government has yet to explain. The first is why it seems that the entire project is supervised by the Ministry of Finance and not the Ministry of Foreign Affairs, despite the fact that the SIPG-controlled terminal is part of a broader project to connect the port with the Persian Gulf. The second issue that remains to be answered is who will finance and build this regional railway network, though the article mentions the possibility that it will be a Chinese company to do that.

Meanwhile, COSCO’s plans for the Port of Piraeus and the growing tensions between Greece and Turkey are becoming interlinked as COSCO continues to pressure the Greek government to hand another 16% of the share capital of Piraeus Port Authority, as well as approve the new projects–like a new fourth pier–for the port that has been delayed so far by both Piraeus municipal authorities and the Greek central government. According to the journalist Minas Tsamopoulos, the Chinese ambassador in Athens has been meeting numerous government officials but has received no clear answer. [6] Yang Jiechi’s visit to Greece in September is a sign that COSCO’s problems are becoming a diplomatic issue between the Greek and the Chinese government, said diplomatic sources to Tsamopoulos. The most striking fact reported by the journalist, however, is that COSCO executives have also tried to pressure the Greek government after Yang’s visit by implying in informal communications that the evolution of the situation in the Piraeus might shape China’s stance in the dispute between Greece and Turkey. If we perceive Tsamopoulos’s reporting as truthful, the fact that COSCO, not Chinese diplomats, tried to play this “geopolitical card” cannot be underestimated as an indicator of how bad the situation is. Moreover, we should look at this news in the context of the Greek discussion about the role of China and the United States in Greece’s relations with Turkey. As pointed out by Plamen Tonchev, Head of Asia Unit at the Athens-based Institute of International Economic Relations, only the United States can help Greece. [7] China is an important economic partner, Tonchev wrote, but it is not a security provider of any kind in the eastern Mediterranean. Therefore, the Greek government and public opinion could not be rational about its approach to China. At the same time, Konstantinos Grivas, a professor at the University of Athens, wrote that there are also limits to what the United States will do against Turkey. [8] The reason is that Turkey is crucial for American foreign policy and Washington cannot risk Ankara joining the Sino-Russian camp. Even without doing much, China has become a geopolitical factor in the eastern Mediterranean.

We close this issue of the ChinaMed Observer, with very interesting news published on November 20, 2020 in the Aydinlik Gazetesi. [9] According to the Turkish newspaper, the Eğirdir Mountain Commando School hosted at least one Chinese commando, First Lieutenant Chen Xinren, to complete a 7-month course. Chen’s presence, the author pointed out, took place as Chinese and Turkish military officials are arranging for Turkish soldiers to train in China. At the same time, relations between the two countries are also moving forward in regard to the vaccine against Covid-19. Although–as stated by the Ministry of Health’s Coronavirus Scientific Committee member Prof. Dr. Tevfik Özlü–some are anxious about taking the Chinese vaccine, 1700 Turkish nationals have already received it and no side effects have been recorded so far. Five million more will receive it soon. [10]

[1] Ammar al-Masʿudi, Wazir al-Takhtit: sanabdaʾu bi-tanfidh al-ittifaqiyat al-ʿiraqiyyat-al-siniyya fi al-yawmin al-muqabbalin, وزير التخطيط: سنبدأ بتنفيذ الاتفاقية العراقية - الصينية في اليومين المقبلين [Minister of Planning: we will commence the implementation of the Sino-Iraqi agreement in the coming days], al-Forat, November 9, 2020, link.

[2] Hazem Muhammad Habib and Muhammad al-Insari, AL-Mustashar al-mali li-raʾis al-wuzaraʾ: al-ittifaqiyat maʿa Bikin nafidhat al-mafʿul, المستشار المالي لرئيس الوزراء: الاتفاقية مع بكين نافذة المفعول [The financial advisor to the Prime Minister: the agreement with Beijing is taking effect], Al-Sabah, November 23, 2020, link.

[3] Sadiqun: al-tasrihat al-hukumiyya bi-shaʾn al-ittifaqiyyat al-siniyya iham li-l-raʾy al-ʿam wa-iltifaq ʿala al-haqiqa, صادقون: التصريحات الحكومية بشأن الاتفاقية الصينية إيهام للرأي العام والتفاق على الحقيقة [Sadiqun: the government’s declarations on the Chinese agreement deceive the public opinion and forge the truth], AIN News Agency, November 21, 2020, link.

[4] Ammar al-Masʿudi, Tatawwur jadid… al-Naql tukhatibu al-Kharijiyya bi-shaʾn mufatahat al-Sin ʿan minaʾ al-Faw (wathiqa), تطور جديد… النقل تخاطب الخارجية بشأن مفاتحة الصين عن ميناء الفاو {وثيقة}, [New development…The Ministry of Transport addresses the Foreign Ministry regarding China’s approach to the al-Faw port], al-Forat, November 24, 2020, link.

[5] Mi-mifratz Haifa la-mifratz ha-parasi: Ha-interesim sh-meachorey ha-michraz lehfratat nemal Haifa ממפרץ חיפה למפרץ הפרסי: האינטרסים שמאחורי המכרז להפרטת נמל חיפה [From Haifa Bay to the Persian Gulf: The interests behind the tender for the privatization of Haifa Port], Globes, November 24, 2020, link.

[6] Minas Tsamopoulos, Kindinos diplomatikou atiximatos Elladas – Kinas logo tou limaniou tou Pirea Κίνδυνος «διπλωματικού ατυχήματος» Ελλάδας – Κίνας λόγω του λιμανιού του Πειραιά [Risk of "diplomatic accident" between Greece and China due to the port of Piraeus], newmoney.gr, November 27, 2020, link.

[7] Plamen Tondef, Evropi, Kina, kai o neos amerikanos imisferiarchis Ευρώπη, Κίνα και ο νέος αμερικανός «ημισφαιριάρχης» [Europe, China and the new American "hemispheric leader"], To Vima, November 11, 2020, link.

[8] Konstantinos Grivas, I Tourkia, I Kina kai oi froudes elpides tis exwterikis mas politikis Η Τουρκία, η Κίνα και οι φρούδες ελπίδες της εξωτερικής μας πολιτικής [Turkey, China and the vain hopes of our foreign policy], europeanbusiness.gr, November 11, 2020, link.

[9] Türkiye-Çin askeri işbirliğinde yeni dönem: Çinli komandolar Türkiye'de [A new era for Turkey-China military cooperation: Chinese commandos in Turkey], Aydinlik Gazetesi, November 20, 2020, link.

[10] Çin'den gelen koronavirüs aşısı güvenli mi? [Is it safe to use the coronavirus vaccine from China?], Cumhuriyet Gazetesi, November 24, 2020, link.

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