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COVID-19: Will it Make China Villain or Victor in the Gulf Region?

How does China emerge from the COVID-19 crisis having been pilloried as the source of the most terrifying pandemic since the Spanish flu ravaged the world after World War I? The American administration, led by President Trump and Secretary of State Pompeo, seems determined to make China the villain. It appears they see this situation as an opportunity to cut China down to size. Not surprisingly, China has refused to roll over and die; Beijing has struck back. The world is now being treated to the unseemly spectacle of the two most powerful economies in the world engaged in name-calling more appropriate to a kindergarten playground. In part, the American name-calling plays to the administration’s domestic audience in the run-up to the November elections. In the meantime, China has engaged in a far more effective campaign of providing poor and not-so-poor countries with materials to cope with the effects of the pandemic. For example, Iraq and Iran have both received much-ballyhooed free shipments of protective masks, respirators, and other medical materials.

By contrast, the United States has doubled down on its economic blockade of Iran despite worldwide appeals to relax sanctions during the pandemic. Adding in a continued refusal to fund any humanitarian activity related to the Palestinian territories, the U.S. has essentially absented itself from any deployment of “soft power” in the Middle East. China has exploited increased U.S. sanctions on Iran, helped feed rumors that the U.S. weaponized the virus, and delivered free supplies with much fanfare to both Iran and Iraq.

Do American actions in the Gulf advance a coherent strategy? On a global scale, the U.S. and China have primarily engaged in a trade war; national security issues appear much less important and often appear to be collateral damage of the trade war. Even the campaign to block Huawei’s rapid expansion into the 5G sector all over the world appears to have a commercial subtext, despite the fact that no U.S. company has rolled out a marketable 5G system to date. The U.S. has threatened allies should they install Chinese technology and equipment in their 5G networks. Yet, Trump’s offer to reverse sanctions against Huawei and ZTE as part of bilateral trade talks undermines the argument.

China’s threats to American national security in the Gulf region seem de minimus compared to the squabbles over issues on the periphery of China. Other than the Chinese declaration of sovereignty over most of the South China Sea, none of the other U.S.-China confrontations concern Chinese territorial expansionism nor warrant major increases in U.S. defense spending. Bloomberg notes that China’s Belt & Road Initiative gets bad press in the US, much of Europe, Japan, and India, but believes a lot of the criticism is much overblown. It is not, in Bloomberg’s view, a “debt trap” to facilitate the expansion of an empire.

Critics argue that China deliberately forces poor countries to take Chinese loans they can never repay as a means to grab the logistics and port projects built with Chinese loans. Almost all the evidence points to the fact that the Chinese made some very risky loans and are now trying to figure out what to do with assets worth much less than what they cost. Again, Bloomberg cites China’s loan to Sri Lanka to build a failed port as an “expensive flop” rather than a strategic acquisition. In fact, many in China have cited these foreclosures as evidence of the Belt and Road Initiative’s failure. The only forward Chinese military facility, their naval base in Djibouti, was designed and built as such from the beginning without subterfuge. The U.S. has criticized the Djibouti base as proof of China’s intent to project force into the Indian Ocean and the Arabian Peninsula. The Chinese rebut with the argument that they have simply responded to criticism for not sharing the burden of protecting the vital sea-lanes of the region.

The COVID-19 pandemic, compounded by collapsing oil prices, may have complicate—in China’s favor—the issue of which country emerges best positioned to exploit the double-whammy in the Gulf Region. This, in turn, requires an examination of whether the totality of Chinese and American interests is complementary or competitive.

Since 1990, the U.S. borne the mantle of sole protector of the Gulf region. Others have interpreted this stance as ensuring that no hostile party interferes with the free flow of oil and gas to the world. The rest of the world’s major powers appeared perfectly content to let the U.S. shoulder the burden alone. At first, the U.S. contained the only two plausible threats, Iran and Iraq, with ease and an economy of force. Then, in an inexplicable lapse of judgment, America essentially destroyed Iraq as a functioning country. The magnitude of this folly took a few years to sink in but together with the troubled intervention in Afghanistan, it has caused the American people to simply want out. Given America’s newfound “energy independence” the American public no longer supports a continuing presence in the region. Both Presidents Obama and Trump saw the writing on the wall and have tried to orchestrate American withdrawal of these security responsibilities. Withdrawal has proven harder to carry out than both imagined. The U.S. wants to leave but does not want anyone else to fill the vacuum. China has now joined the likes of ISIS and The Islamic Republic of Iran as a party whose influence in the region we wish to prevent after the U.S. departure. But does China really want to fill that role?

A reduction in American influence in Gulf appears inescapable. But is the U.S. indeed engaged a zero-sum game with China over security interests? What does China want? First and foremost, China needs to ensure the free flow of oil and gas from the Gulf, the most important source of energy imports into the Middle Kingdom. Secondly and not unimportantly, China pays for at least a portion of those imports by selling goods into the region, so markets must also be protected. China has successfully demonstrated to its trading partners that its interests are purely commercial. It makes no effort to dictate their internal or external politics. There is no indication that China seeks to replace the American security umbrella nor does it remotely have the capacity to do so now, or in the foreseeable future.

China has no need to coerce the Gulf states to export energy. China will remain their biggest customer now into the end of the age of hydrocarbons. We should expect to see expanded Chinese investment in the region. However, the rich Gulf Cooperation Council (GCC) States, with no more than 50 million consumers, may have already reached saturation for profitable investment. China will probably concentrate on building markets in Iran and Iraq, taking advantage of American sanctions in the former case. We should expect China to exploit Iraq as an entrepôt into the larger Middle East by investing in transportation infrastructure as it has done elsewhere. Iraq’s potential as a major oil exporter should mitigate the likelihood that investments will go belly up as in Sri Lanka. If the need arises to protect those investments, we should expect China to wield soft power. Unlike the United States, China does not view national security interests through the monocular lens of military power. We should assume that their nascent interest in counterpiracy activities might extend to assisting their customers to fight terrorism and other forms of violent extremism. Unfortunately, we should also assume that China will help authoritarian states maintain order by providing some small part of their own extraordinary surveillance and population monitoring techniques and hardware. In doing so, they would act no differently than the US, Britain, France, and Russia—countries that have never hesitated to provide Middle Eastern dictators the wherewithal to suppress internal discontent.

So where do America’s national security interests collide with those of China in the Gulf region? To be fair, improved Chinese relations with the Islamic Republic of Iran will complicate the bipartisan American obsession with getting revenge for the embassy hostage taking of 1979. On the other hand, one can assume that a better relationship with China could easily give Tehran an incentive to step back from some of its malign (a favorite American diplomatic term) activities in the region. On the plus side, Beijing will not be comfortable with Moscow filling the vacuum created by an American withdrawal. China lives cheek by jowl with Russia and has far more vital assets at risk than with the US. This is not to argue that an increased Chinese presence in the Gulf region will always favor American interests. There will be complications and disputes that pose real challenges for U.S. interests. Perhaps, a Chinese presence may force America to once again up our diplomatic game.

 

Ambassador Patrick Theros is a Strategic Adviser for Gulf International Forum.

The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views of Gulf International Forum.

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