July 2019

As tensions in the Strait of Hormuz and between Iran and the United States continue, Iran and American policy in the Middle East, unsurprisingly, received significant attention in Chinese media. Overall, Chinese commentators remain skeptical about the break out of a war between Washington and Tehran, although they do acknowledge that the situation is tense and it is unlikely that there will be any breakthrough any time soon. [1] From Beijing, the news that the American government authorized American companies to cooperate with Saudi Arabia in the field of nuclear energy is unequivocally read as proof of the double standards of American diplomacy. This is what Xu Guoqing, Researcher at the Institute of African and West Asian Studies of the Chinese Academy of Social Sciences, argues in an article published by Xinhua’s Globe magazine. [2] Given the more or less tacit consent and support to Israel and Saudi Arabia to develop nuclear technologies, while attacking Iran’s plans to use nuclear energy for civilian purposes and objecting to proposals to create a nuclear-free zone in the Middle East, Xu accuses the United States of not being a credible actor. Interestingly, Xu makes no reference to China’s own ambitions to sell nuclear reactors in the region, one of the pillars of its own strategy there. Another article published by the Global Times directly blames the current situation on the US Secretary of State Mike Pompeo and the National Security Advisor John Bolton. [3] As for Iran, Chinese commentators seem more understanding. They see Iran’s hard response, such as in the case of shooting down of an American drone, as a move that is dangerous but justified by the nature of the American threat as well as the significant pressure on Iranian policymakers from public opinion. As Li Guofu, Director of the Middle East Research Center of the China Institute of International Studies (CIIS), pointed out, neither side seems willing to start a war but the risks keep on growing as an incident can easily become a casus belli. [4] 

It is through this lens that Chinese scholars looked at the mutual seizure of tanks by Iran and the United Kingdom. Dong Manyuan of CIIS declared that the United States pushed the United Kingdom to seize the Iranian tanker in order to undermine the Iranian and European commitment to the nuclear deal. [5] The American attempt, they predict, will fail. On the one hand, Iran wants to preserve good relations with European countries. Indeed, Iran’s decision to seize the British-flagged oil tanker, the Stena Impero, on July 20 was reactive in nature and other countries should not fear Iran unless they provoke it by acting on behalf of the United States. On the other hand, European countries do not agree with Trump’s policies and remain eager to return to the Iranian market. Yet, according to an article published by China Business Network, the situation is also creating problems for China. [6] According to the journalist, every negative event in the Strait of Hormuz makes the cost for insuring tanker and cargo ships increase. As proof of this, he mentions the decrease of the China Containerized Freight Index (CCFI) from 913 to 890,13 in early July. CCFI tracks spot and contractual freight rates from Chinese container ports for 12 shipping routes across the globe, based on data from 20 international carriers. Yet, the data from the Shanghai Shipping Exchange show that the CCFI rose from 871,44 to 899,2 between July 19 and July 26.

This is an issue that is particularly important as PetroChina keeps on expanding the scale of its operations in the Middle East. Its projects there are predicted to produce more than 100 million tons of crude oil this year. [7] Today, PetroChina has 15 ongoing oil and natural gas projects in five different countries in the region. One of the factors that made this development possible is PetroChina’s improved capability to work with complex carbonate reservoirs, which account for the majority of the reservoirs in the Middle East.

Meanwhile, China and the United Arab Emirates (UAE) continue to strengthen their relationship. According to Xinhua, the key factor behind this development is Xi Jinping’s visit to the UAE in July 2018. [8] Since then, the article highlights, many high-level visits by Chinese and Emirati officials prepared the ground for Sheikh Mohammed bin Zayed Al Nahyan to visit China exactly one year after Xi’s trip to his country. Xinhua also does not fail to mention the UAE’s support to China over human rights, deradicalization, and Xinjiang at the United Nations. It is clear that the UAE is an important partner for China or, as Xi declared, “the relationship is rich in content and deeply strategic in nature.” During Sheikh Mohammed bin Zayed Al Nahyan’s visit, Chinese and Emirati representatives signed 16 Memoranda of Understanding. At the same time, commercial relations between China and Israel continue to move forward, also thanks to the visit of 36 Chinese entrepreneurs and representatives of industrial associations at the China Israel Innovation Forum, which was held in Tel Aviv on July 15. According to the Global Times, there are Chinese commercial delegations in Israel almost every day and the volume of trade between the two countries reached USD 12 billion in 2018. [9]

Finally, we close this issue of the ChinaMed Observer with the comments of Li Yanan, an associate researcher with the China Institute of Contemporary International Relations, and Gu Yan, an associate researcher at the Shanghai Academy of Social Sciences, on Turkey’s acquisition of Russia-made S-400 SAM system. [10] Both scholars agree on the fact that this is a remarkable event as both Russia and Turkey see it as part of the response to important problems that they are facing. On the one hand, they argue, selling the S-400 to Turkey further strengthens Russia’s position in the Middle East, while also undermining NATO’s unity. On the other hand, Turkey is cementing relations with Russia, a country that seems a more reliable partner in the Middle East, especially in times of tensions with the West. However, Li Yanan points out, it is important not to overemphasize the importance of the S-400 for Turkish foreign policy. Ankara, he believes, bought the S-400 in an attempt to rebalance its relations with NATO and the EU but it is not abandoning its traditional Western partners.