September 2019

As in the past edition of the ChinaMed Bulletin/Observer, the events in the southern and, especially, eastern parts of the wider Mediterranean region continue being the main subject of attention for Chinese commentators. Therefore, we open this issue discussing an analysis published by Xinhua’s Globe about Italy and, then, we look at how Chinese experts analyzed the potential for investments in North Africa and the situation in the Middle East, especially the Gulf.

Cao Hui, an Associate Researcher with the European Studies Institute of the Chinese Academy of Social Sciences (CASS), wrote in late September an analysis of the composition of the newly formed Italian government.[1] Unsurprisingly, she emphasizes the many contradictions that plague the new alliance that the Democratic Party and the Fiver Star Movement have formed at the national level against Matteo Salvini, former Vice Premier and Minister of Interior, and his Northern League. Unfortunately, Cao does not talk much about the potential evolution of the Italian foreign policy, thereby avoiding comments about the new government’s decision to approve its use of special powers in supply deals for fifth-generation (5G) telecom services by a number of domestic firms with providers including China’s Huawei and ZTE.

Moving eastward, there is another government that is having problems—the Israeli one. Asked about the impact of the recent elections in Israel, Yu Guoqing, a Researcher at the Institute of West Asian and African Studies of CASS, stated that he does not expect significant changes in Israeli foreign policy, especially in regards to the relations with the United States.[2] Although he admits that the cracks in Israeli politics are getting increasingly wider, the country has previously been in similar situations. As it often happens, there is no comment about what a political standoff in Israel could mean for China, whose companies’ operations there, as we noticed many times in our research, are the subject of an ongoing debate where the government is increasingly called to take a balanced stand between those in favor of economic cooperation and those more concerned about security.

Such kinds of concerns seem to not be present in other parts of the region, as the latest edition of the Yellow Book of the Middle East: Annual Report on Development describes great opportunities for Chinese companies that plan to invest in the Middle East.[3] In particular, Chinese entrepreneurs are invited to take three elements into consideration. First, the countries there have a huge demand for new infrastructure. Hence, Chinese companies should actively enter those markets by adopting a public-private partnership model with local actors or Chinese domestic investors to ensure the right amount of capital to carry out this enterprise. Second, renewable energy is seen by many in the region as a strategic sector and some countries have already launched new policies to diversify their energy supplies. This is another important market for Chinese companies. In January 2019, Hanergy Holding Group was invited by the Saudi Government to the inauguration of the National Industrial Development and Logistics Program and has already signed an agreement with Saudi Arabian company Ajlan & Brothers to launch a USD 1 billion solar thin-film industrial park. Third, China-promoted industrial parks in the Middle East have not been as successful as those in Africa. However, as the countries in the region have decided to diversify their economy to end their dependence on oil revenues, the situation might change quickly. Chinese companies, therefore, should be ready to invest in the parks that already exist, such as in Oman and the UAE, and in those that will come.

Yet, business opportunities risk being overclouded by the continuous instability in the region, as Li Weijian from the Shanghai Institutes for International Studies highlights in a piece for Xinmin Evening News.[4] Other scholars from CASS, the China Institute of International Studies, Ningxia University, and the China Institute of Contemporary International Relations, too, were quoted by Chinese media about the situation. Some argue that recent events, especially the attack against Saudi Aramco oil facilities of September 14, will have a highly disruptive effect on the international energy market; some, instead, acknowledge that the attack risks further destabilizing the region but, so far, most of the threats of revenge have not translated in action.[5] It is clear, however, that Chinese commentators are relatively friendly/understanding toward Iran and the Houthis as they see the attack as something needed to respond to the pressure applied by the US and its allies against Iran, whose economy is greatly suffering due to the economic sanctions. The Global Times published an editorial that undoubtedly supports Iran—arguing that the US is not only falsely accusing Iran without producing any evidence, but also that it is benefitting from this situation because high oil prices help its energy industry.[6] Against this background, Wang Cheng, a Researcher at the Beijing Foreign Studies University (BFSU), points out that it is possible to see strains in the relationship between Saudi Arabia and the UAE as a result of different points of view on Iran and the future of the war in Yemen.[7] Yet, the truly interesting part of Wang’s article is his affiliation with the UAE-sponsored Sheikh Zayed bin Sultan Al Nahyan Centre for Arabic Language and Islamic Studies at BFSU. The center was established in 1994 with a grant provided by the late Sheikh Zayed bin Sultan Al Nahyan during his historic visit to China in 1990. It was closed in 2009 to undergo maintenance and furnishing and re-opened in 2012 during the visit of Zayed Al Nahyan, Crown Prince of Abu Dhabi, to China. Wang’s article seems quite balanced. However, given the influence of centers and think tanks in the US sponsored by Gulf countries, how similar centers in China treat Middle Eastern issues is something that should be overlooked, especially because the Chinese community of regional experts is still relatively young.

How is China dealing with all this? On September 2, the Chinese Ministry of Foreign Affairs announced that Zhai Jun has become the new special envoy of the Chinese government to the Middle East. In 1997, the 43-year-old Zhai Jun became the youngest ambassador in the Ministry’s history and was given the leadership of the embassy in Libya. He also served as Assistant Foreign Minister in charge of the Middle East in the early 2000s. At the same time, Wu Sike, the first special envoy to the Middle East, wrote a short article regarding the three vetoes in the United Nations Security Council that China casted between October 2012 and July 2012 over Syria.[8] Interestingly, he writes that he travelled to Saudi Arabia, first, and other countries in the Gulf to explain that China was not defending the Syrian government but the principle that external actors cannot interfere in the domestic affairs of any country, especially after what happened in Libya one year before. Clearly, some in the region were not happy with China’s position.

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