December 2018

President Trump’s decision in mid-December to withdraw the 2,000 American troops from northern and eastern Syria undoubtedly was as unexpected as it was game-changing, and will have significant repercussions  for the situation in the eastern side of the Mediterranean region. Unsurprisingly, it caught the attention of Chinese observers, too.

At this critical stage of the conflict in Syria, Chinese observers do not see the American withdrawals from that country as a particularly positive sign for the future of the region. According to the veteran scholar Liu Zhongmin, a scholar from the Shanghai International Studies University (SISU), Trump’s decision reflects the fact that it is increasingly difficult for extra-regional powers to control the Middle East. Yet, the role of the United States as offshore balancer against Iran is far from over, albeit its declining influence.[1] At the same time, however, neither Russia, not Turkey, nor Iran can clearly be identified as “winners.” Syria and those three countries need the support of the West and the approval of the United Nations.[2] Moreover, the absence of American forces and Trump’s declaration that terrorists have been defeated might makes less justifiable the presence of Russian forces in Syria in front of international opinion.[3]

Although none of the articles published by Chinese media mention China’s role or preferences, a paper written by a scholar with SISU argues that the best scenario for China would be the withdrawal of both Russia and the United States.[4] All the other scenarios, from both Russia and the United States remaining in Syria to the stepping back of one of them limit China’s choices. According to the author, the second-best scenario is one with the Americans out and the Russians still in because Washington would be forced to invest more energy in the Middle East to regain its position, thereby easing pressure on China. It is important to note that Chinese interests in Syria are not described in terms of economic opportunities in that country but in terms of energies that the United States and, importantly, Russia have to expend against each other. Despite recent comments in English language media about Chinese plans to invest in Syria, other Chinese sources indicate that there is not much for Chinese companies there besides risks and uncertainties.[5]

December 2018 was also the anniversary of Chinese antipiracy operations in the Gulf of Aden that began ten years ago as part of international efforts against Somali pirates.[6] The most interesting news on this is the report on the deployment of Chinese special forces to free the Taiankou from Somali pirates in November 2010. Although the report seems to indicate that the pirates left before the arrival of the Chinese, this is the first time that similar events have been disclosed to the public.[7] At the same time, Chinese media took this event as an opportunity to celebrate the role the newly launched military base in Djibouti has been playing since August by supporting the missions of the Navy logistically, and increasing the opportunities for Chinese soldiers to cooperate with foreign militaries. According to an article published in Sohu.com, every day more than 1,000 Chinese ships transit through the Suez Canal going to or coming from Europe. They transport every kind of good back and forth. This is why, some of the officers interviewed said, it is necessary for China to maintain and improve the capability of the armed forces to protect not only Chinese interests at sea but, as demonstrated in 2011 during the evacuation of almost 36,000 Chinese nationals from Libya, on land.

Finally, Chinese media have also been celebrating the “birth” of the fourth “oil barrel” (桶油, Tǒng yóu), a term used to indicate the main oil companies in China.[8] Zhenhua Oil, the oil exploration and production subsidiary of Chinese defense contractor Norinco, acquired 4% of the onshore concession of Abu Dhabi National Oil Company (ADNOC). Originally, those shares were held by CEFC China Energy, a formerly private energy company that run into fiscal and legal troubles in spring 2018. CEFC rose spectacularly from obscurity to become China’s fourth-largest oil conglomerate in the space of a few years thanks to the financial support of the China Development Bank. Shanghai’s municipal government has taken over management and daily operations of CEFC since March 2018. CEFC bought the shares in ADNOC in 2017 for USD 880 million. As for Zhenhua, it is wholly owned by the State-owned Assets Supervision and Administration Commission of the State Council. Zhenhua joins British Petroleum, Total, China National Petroleum Corporation, Inpex Corporation, and GS Energy as one of ADNOC’s stakeholders. ANDOC retains the other 60 per cent of the concession. Through its newly acquired stake in ADNOC, Zhenhua has access to over 3.2 million tons of oil per year at the current level of production. The number will exceed 4 million tons per year when the fields reach their production plateau. On top of this, Zhenhua also inherited a 40-year supply contract for 10 million tons of crude oil every year. These two deals combined will provide China with stable access to an additional 13.2 million tons of high-quality crude oil on a yearly basis. Over 2018, Zhenhua also launched 11 new oil and natural gas projects in Iraq, Kazakhstan, Egypt, Syria, Myanmar, and Pakistan that in total should produce almost 10 million tons of oil every year.

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