Xi of Arabia

By Ana Palacio*

Perhaps no image better captures the shifting dynamics in the Middle East than that of Ali Shamkhani, the secretary of Iran’s security council, and Musaad bin Mohammed Al Aiban, Saudi Arabia’s minister of state, shaking hands in Beijing, with China’s top diplomat, Wang Yi, smiling between them. The officials were celebrating a China-mediated deal restoring diplomatic ties between the two rivals. In the process, China solidified its reputation as a global powerbroker and underscored the extent to which America’s regional role has been diminished.

The surprise deal was born largely of necessity. For Iran, which has long been deeply isolated by US sanctions, the détente represents a much-needed economic lifeline at a time of deepening popular unrest. For Saudi Arabia, it offers the prospect of a respite from the devastating proxy war that the country has been waging against Iran in Yemen.

But while both sides had their reasons for pursuing rapprochement, it was China that made it happen. After decades of heeding Deng Xiaoping’s advice to “hide its strength, bide its time, never take the lead,” China has apparently decided that its moment to step into the global spotlight has arrived.

It is not difficult to see why the Middle East has long featured prominently in Chinese strategic planning: China is a voracious energy consumer, and the Middle East is a leading energy supplier. But, until recently, China focused mainly on expanding its economic footprint in the region. Since 2014, the Gulf Cooperation Council countries have doubled crude oil exports to China, with the total exceeding 210 million tons in 2022.

With the Saudi Arabia-Iran dialogue, however, China appears to be taking its regional engagement to a new level. In fact, just a month after the deal was struck, China appealed to Afghanistan’s Taliban leaders to create a more inclusive government – a startling move for a country that has traditionally resisted making pronouncements on countries’ internal affairs.

China has laid the groundwork for yet more diplomatic leadership. Last year, it introduced the Global Security Initiative, which aims to help “resolve differences between countries” and “peacefully settle crises.” A year before, it launched the Global Development Initiative, billed as a “roadmap for supercharging economic growth, striving for well-coordinated development and shared prosperity.”

Such efforts will undoubtedly focus on the Middle East, which, together with Central and East Asia, forms the first of the “three rings” into which some Chinese pundits argue the country should be categorizing its diplomatic relations. (The second ring comprises other developing economies in Asia, Africa, and Latin America, while the third ring – the lowest-priority countries – encompasses the industrialized world.)

China’s advances in the Middle East have been facilitated by US policy toward the region. As Harvard’s Stephen M. Walt points out, the US always cultivated “special relationships” with some countries, and no relationship at all with others. As a result, not only does the US have virtually no leverage over foes like Iran; it also has limited influence over its “clients” – such as Saudi Arabia – which have come to take the relationship largely for granted.

To be sure, Saudi Arabia still depends on the US; just last month, the Kingdom struck a $35 billion deal with aircraft manufacturer Boeing. But it has become increasingly disillusioned with its longtime partner. After all, the US refrained from directly blaming Iran for a 2019 attack on Saudi oil facilities and has repeatedly rebuked the Kingdom for its human-rights record.

More fundamentally, the US has been paying a lot less attention to the Middle East in recent years. This was partly a reaction to being geopolitically overstretched. But it also reflected the sharp decline in America’s dependence on energy imports, owing to the rapid exploitation of America’s shale oil and gas.

In response, Saudi Arabia has been pursuing strategic non-alignment through deeper ties with China – which has carried out more diplomatic missions to the Middle East than any Western country over the last decade – as well as Russia and the other Gulf countries. This shift was reflected in the recent decision by OPEC (in which Saudi Arabia is the largest producer) and its allies (including Russia) to cut oil production – a move that will further complicate America’s efforts to rein in inflation without triggering a financial crisis or recession.

The US will come to regret giving up its foothold in the Middle East. For starters, given shale energy’s modest growth and limited future prospects, the US will be even more at the mercy of OPEC+ in the coming years. More important, Chinese President Xi Jinping is taking advantage of America’s withdrawal to establish China not only as a regional power, but as a global leader capable of challenging the US-led world order built after World War II.

It will not be smooth sailing for China. The country’s prized “neutrality” will be challenged by new security arrangements, and it will be virtually impossible to avoid becoming entangled in regional dramas. And China is not equipped to offer the kind of leadership that the US – or Europe, for that matter – has shown in the past.

In any case, the US must act urgently to restore its position in the Middle East, much as it has begun attempting to do in Africa. Winning back lost allies is much more difficult and costly than maintaining good relationships, so there is no time to waste.

Europe, which has been preoccupied by the war in Ukraine, should also take notice of developments in the Middle East. It knows all too well about the geopolitical vulnerability created by energy dependence, whether on Russia before the war or the Gulf today. Dreams of strategic autonomy cannot mitigate such risks, let alone those raised by the turmoil in the Mediterranean and Iran’s continued advance toward nuclear breakout. But cooperation with the US in the Middle East can.

*Ana Palacio, a former foreign minister of Spain and former senior vice president and general counsel of the World Bank Group, is a visiting lecturer at Georgetown University.

© Project Syndicate