December 2017

In December, the Chinese media published on a variety of topics. While President Trump's decision to move the American embassy to Jerusalem naturally attracted most of the attention, Chinese journalists and commentators also discussed other issues related to Israel, Syria, industrial parks in Egypt, Oman, the UAE, and the alleged presence of Chinese troops in Syria.

We start our review with comments from the former Ambassador to Iran Hua Liming and Tang Jizan from the Xinhua Center for World Affairs Studies. They both agree on the fact that 2017 was a pivotal year for the regional order in the Middle East. While Iran and Russia emerged as the two uncontested winners thanks to their effective strategies, the US and Saudi Arabia are either retreating or suffering great losses after a long period of ineffective and costly overstretching. The analysis is more nuanced when it comes to the situation in Israel and Turkey, the Syrian crisis, the fate of the Kurds, and the further escalation of confrontation with the Arab world over Jerusalem are serious tests for the two regional powers. Yet, as Ambassador Hua has noted, the Israeli-Palestinian problem is becoming less important than it was in the past. While many Arabs still hold strong sentiments regarding the future of the Palestinians, the war in Yemen, the low price of oil, and the fight against terrorism have profoundly weakened the Arab world and its capability to respond to Israel's moves as strongly as in the past. According to Tang Jianduan of the Shanghai International Studies University, the strengthening of the relationship between Saudi Arabia and Israel vis-à-vis Iran's rise is the main cause of the weak support that the Palestinians have received so far.  

The issue of the American embassy moving to Jerusalem was harshly criticized by a group of Chinese scholars interviewed by the People's Daily. Essentially, they blamed Trump's lack of significant political achievements and the interests of the Kushner family as the main causes of his decision. As further evidence to support their argument, they noted that the practical details regarding the relocation are very unclear, despite the noise surrounding this issue. According to Wang Jin, a regular commentator on Sino-Israeli affairs, this issue can be extremely dangerous if handled carelessly: China must now focus on avoiding becoming a target of terrorism, a problem further aggravated by Trump's decision. At the same time, Beijing must be very cautious in entering the debate surrounding the relations between Israel and the Palestinians. Admittedly, wrote Wang, the situation is too complex for China to be involved. The Chinese embassy in Israel also warned Chinese travelers of the safety problems caused by the ongoing crisis.

While Chinese media dismissed the speculations of many foreign media outlets about the presence of Chinese troops in Syria, Qiu Yongzhen of the People's Daily noted that the frequency of warnings issued by the embassies in the Middle East is growing. Although he mentioned the possibility of foreign fighters coming back to China from the battlefields of Syria and Iraq, it is the presence of Chinese businessmen in that region and in Asian Muslim countries that creates a significant challenge for China.

At the same time, the relations between China and Israel are strengthening. According to the Ministry of Commerce, the third round of talks between Chinese and Israeli officials has produced important results for the establishment of a free-trade zone. Meanwhile, China has become Israel’s third main trading partner. Between January and September 2017, the trade volume reached USD 9,71 billion (+13,9% compared to 2016), and Chinese investments in Israel totaled USD 4,23 billion (Israeli investment to China were USD 380 million).

As we noted in the November 2017 issue, industrial parks and economic zones are becoming central elements in the implementation of the Belt and Road Initiative (BRI). This fact was confirmed once again in December. Binhai Radio published a celebrative and informative interview with Wei Jianming, the CEO of the China-Africa TEDA Investment Company (TEDA Investment from here on). The article describes the story of TEDA Investment's involvement in Egypt since early 1998. Political events, such as Mubarak's visit to China in the early 1990s, the China-Africa Forum of 2006, and the launch of the BRI in 2013, played a key role in creating opportunities for TEDA Investment to become a leading actor in Sino-Egyptian relations. It is apparent that TEDA Investment's success is the result of its strong capabilities to adapt to new business environments, as well as strong technical expertise accumulated by overcoming significant challenges, such as the Israeli mines left from the war and the high expectations from leaders in both countries.

Similarly, the Ningxia branch of the China Council for the Promotion of International Trade authored an article for China Trade News focusing on the development of the China-Oman Industrial Park in Duqm since the formation of the initial agreement during the 2015 China-Arab Expo in Ningxia between the Government of Ningxia Hui Autonomous Region and the Omani local authorities in Duqm. According to financial rules regarding this project, the ratio between public and private capitals must be at least 1:3. Hence, while the Government of Ningxia Hui Autonomous Region established a RMB 100 million fund, the Eastern Spring (Tianjin) Capital Management Company and the Ningxia China-Arab Wanfang Investment Management Company put together RMB 350 million for the industrial park. The National Development and Reform Commission also allocated RMB 10 million to support the initial stages of the project. This article was published on the same day that officials from Oman and Ningxia held a promotional event in Beijing to attract Chinese companies.

In order to speed up and facilitate the process of developing new special economic zones, Chinese banks are also moving into the region. Three days after the Bank of China's Chairman Chen Siqing declared that the Mediterranean region was becoming crucial to Chinese economic operations within the BRI framework, the Bank of China signed a Memorandum of Understanding with the Khalifa Industrial Zone Abu Dhabi (KIZAD) to support Chinese companies interested in starting operations in the UAE. The Bank of China pledged to start promotional activities in Shanghai and Shenzhen to attract companies to invest in the Middle Eastern country.