China’s growing presence in the Gulf, particularly its burgeoning relationships with Saudi Arabia and the United Arab Emirates (UAE), signifies a significant shift in the global geopolitical landscape. Driven by evolving energy markets, the rise of multipolarity, and the intensifying US-China rivalry, these partnerships have profound implications for regional stability, global trade, and the future of international relations. This article delves into the multifaceted dynamics of these evolving relationships, exploring the opportunities and challenges they present for all stakeholders, including the EU.
The Burgeoning China-Gulf Relationship: Beyond Energy and Infrastructure
While energy trade remains a cornerstone of the China-Gulf relationship, cooperation has expanded significantly into diverse sectors, reflecting Beijing’s evolving foreign policy priorities. China, now the world’s largest oil importer, relies heavily on Gulf hydrocarbons, with the region accounting for nearly a quarter of its imports. This energy interdependence has propelled joint investments across the energy value chain, from exploration and exploitation to refineries and petrochemical industries.
Beyond energy, the Belt and Road Initiative (BRI) has facilitated partnerships on strategic port and industrial zone projects, strengthening the Gulf’s position on global trade routes. Key projects include terminals at Khalifa Port in the UAE and Yanbu, Jizan, and Jeddah ports in Saudi Arabia.
Furthermore, cooperation has extended to digital infrastructures, new technologies, and renewable energy. Chinese firms are involved in major renewable energy projects in the Gulf, such as the Mohammed bin Rashid Al Maktoum Solar Park and the Noor Abu Dhabi solar plant in the UAE. The China Silk Road Fund’s acquisition of a 49% stake in ACWA Power, a Saudi renewable energy company, underscores the growing investment in this sector.
Emerging Technologies and AI: A New Frontier of Cooperation and Concern
The most consequential area of cooperation, and potentially problematic for Western countries, is emerging technologies and AI. As the Gulf states invest heavily in digitalization, they have increasingly partnered with Chinese tech companies like Huawei and Alibaba for 5G networks, smart city applications, and data centers. In September 2023, Huawei launched a new cloud region in Riyadh, focused on government services and AI applications.
Chinese scholars hold prominent positions in leading AI research institutions in the Gulf, such as King Abdullah University of Science and Technology (KAUST) in Saudi Arabia and the Mohammed bin Zayed University of Artificial Intelligence (MBZAI) in the UAE. These institutions are at the forefront of developing Arabic large language models and AI applications.
However, this cooperation has raised concerns in the US about potential access to sensitive technologies. The purchase of US-produced Nvidia chips, whose export to China is restricted, by Gulf research institutions has fueled these concerns. There are also fears that Chinese tech equipment in Gulf digital infrastructures could be used for intelligence gathering, given the close US military partnership with the region.
Xi Jinping presiding over the Saudi-Iranian rapprochement, a symbolic moment for China’s growing diplomatic influence.
From Transactional to Strategic: The Evolution of Political and Security Ties
Political and security relations have also deepened, marking a shift from Beijing’s traditionally reserved approach. The UAE and Saudi Arabia have appointed high-level envoys to China, and high-level visits have increased significantly. The PLA Navy has increased port calls and joint naval exercises in the region, and Chinese defense companies have made inroads into the Gulf arms market. Saudi Arabia and the UAE have purchased Chinese drones, a technology Western partners have been hesitant to sell.
Rumors of potential Chinese military installations in the UAE and Oman have further heightened US concerns, leading to the suspension of F-35 fighter jet negotiations with the UAE. China’s mediating role in the 2023 Saudi-Iranian rapprochement, while building on earlier efforts by Oman and Iraq, signaled a more active diplomatic role for Beijing in the region.
Navigating a Multipolar World: Gulf States Balancing Act
The Gulf states’ burgeoning relationship with China is driven by a desire to navigate an increasingly multipolar world. The perceived decline in US engagement, marked by events such as the withdrawal from Afghanistan and hesitancy to intervene in regional conflicts, has prompted Gulf states to diversify their partnerships. Joining organizations like the Shanghai Cooperation Organization and BRICS further reflects their ambition to become key players in a new global order.
Saudi preferences for living abroad highlight the continued cultural and educational ties with the West.
The US-China Rivalry: A Balancing Act for the Gulf
The US-China rivalry presents both challenges and opportunities for the Gulf states. While keen to avoid choosing sides, they are increasingly facing pressure from the US regarding their ties with China. The F-35 deal suspension and increased scrutiny of Gulf investments by the Committee on Foreign Investment in the United States (CFIUS) illustrate this pressure.
However, the Gulf states also leverage China as a bargaining chip in their relations with Western powers. Saudi Arabia’s use of the “China card” in nuclear negotiations with the US is a prime example. The Gulf’s role in the dollar’s reserve status also provides leverage. While resisting a complete shift to the renminbi, recent developments like the LNG sale settled in renminbi and the currency swap agreement suggest a potential move towards greater financial independence.
Despite growing ties with China, Saudi public opinion still leans towards alignment with the US.
The European Response: Engaging with a Changing Landscape
The evolving China-Gulf dynamic presents challenges for European interests, but also opportunities for engagement. The EU should focus on areas of comparative advantage, such as renewable energy, green technology, and high-tech sectors, while setting clear red lines in sensitive areas like technology transfer and sanctions bypassing. Engaging with China on issues of mutual interest, such as regional stability and non-proliferation, while remaining realistic about the limitations of cooperation, is also crucial.
Public perception in Saudi Arabia, influenced by narratives of a declining West, overestimates the likelihood of EU collapse.
A New Era of Geopolitical Partnerships: Looking Ahead
The China-Gulf relationship is still developing, but its trajectory has significant implications for the global order. The Gulf states, empowered by their economic and geopolitical leverage, are charting a more independent course, seeking to maximize their benefits in a multipolar world. Understanding the complexities of these evolving dynamics is essential for all stakeholders, including the EU, to navigate the challenges and opportunities of this new era of geopolitical partnerships.
FAQ
1. What is driving China’s increased interest in the Gulf?
China’s growing energy needs, its pursuit of a multipolar world order, and the strategic importance of the Gulf in global trade are key drivers.
2. How are the Gulf states balancing their relationships with China and the US?
They are pursuing a strategy of diversification, seeking to maximize benefits from both relationships while avoiding taking sides in the US-China rivalry.
3. What are the potential risks of the growing China-Gulf partnership for Western countries?
Risks include technology leakage, sanctions bypassing, and a potential erosion of Western influence in the region.
4. How should the EU respond to China’s growing presence in the Gulf?
The EU should focus on areas of comparative advantage, set clear red lines in sensitive sectors, and engage with China on issues of mutual interest.
5. What is the future of the China-Gulf relationship?
The relationship is likely to continue to deepen, driven by mutual interests and the changing global landscape. However, the pace and scope of this development will depend on various factors, including the US-China rivalry and regional dynamics. We encourage readers to share their thoughts and questions on this evolving geopolitical landscape.
