May 2021

The search through the media outlets of the wider Mediterranean region reflected two main trends in their perception of the Chinese presence. On the one hand, Middle Eastern and North Africa countries emphasized, despite occasional critics, the importance of China’s continuing economic and diplomatic engagement in the region. On the other hand, European countries and Israel expressed deep concerns over their relationship with China, especially vis-à-vis their political and economic ties with the United States.

The news agency al-Ain reported the resuming of the development project of the Algerian port of El Hamdania under the framework of the Chinese Belt and Road Initiative. [1] As stated by the Algerian Ministry of Transport, this will be the largest Chinese project in Algeria and the country’s largest and first deep-water port, co-financed by the two countries for a total cost of USD 6 billion and extending over a total surface of 310 square hectares. The port will consist of 23 berths for a capacity of 25.7 million tons annually. This project is expected to become the largest port in the Mediterranean, as it will connect Algeria to sub-Saharan Africa through the 46000 km-long Trans-Saharan Highway, thus turning Algeria into a “connection between the African and European market” and “a global industrial pole.”

Against this background, it is interesting to look at the latest developments in the dispute between the Greek government and the Chinese state-owned company Cosco over the Piraeus Port Authority (PPA), which is becoming more critical as the August 2021 deadline for the transfer of the remaining 16% share of the PPA to Cosco closes in.  As stated in the concession agreement stipulated in April 2016, Cosco would obtain the additional 16% of the PPA shares if all mandatory investments were completed. However, only one third of those investments were completed due to the Greek government’s delay in granting the necessary permits. A legal source talking to Kathimerini said that, since the Chinese company is not responsible for these delays, if an amicable settlement is not reached and the parties will have to resort to an arbitration, Cosco is likely to win. [2] The same newspaper reported that the Greek government is willing to reach an agreement, thus granting the Chinese company the requested 16% of shares and forfeiting the letters of guarantee Cosco needs to obtain a 2-year extension to complete the investments. However, Cosco seems only interested in the additional shares through which the company will strengthen its position in the decision-making process. According to Giorgios Georgiou, writing for Capital.gr, the main issue is the construction of Pier 4, the cruise pier, which is still being discussed in court, following the emergence environmental issues and protests from the residents and the Labour Centre of Piraeus. He also stated that the Chinese party stresses the criticality of the new pier, as the “increased competition from neighbouring countries”, for example the port of Tangiers in Morocco, may “threaten the dominance of Piraeus in the movement of containers.” [3] Moreover, Greek shipyard owners and trade labor unions continue to accuse Cosco of failing to meet the terms of the agreement for providing ship repair facilities and of trying to establish a monopoly. [4]

The importance of the wider Mediterranean region is also highlighted in Iranian media. With regards to the Iran-China 25-year cooperation document, Abuzarr Moradi pointed out that, while US dependency on Middle Eastern oil has diminished due to improvements in shale oil extraction technology and changes in domestic production policies, China’s need to secure its energy sources in the Middle East, which provides 60% of its oil consumptions, has increased. Therefore, if, due to the withdrawal of US forces, the tensions in the region increase and damage the oil infrastructures, “China will lose more than the United States.” [5] Moradi suggested that Iran could use its relations and cooperation plan with China to re-enter the oil and commodity markets, and global value chains. Moreover, the opportunities envisioned in the Iran-China cooperation document could improve Iran’s bargaining power in the negotiations with the United States and ensure a more active Iranian role in regional cooperation. It may be interesting to note here that Iran seems to look attentively at China’s moves in the rivalry with the United States, especially with regards to anti-sanctions policy. In fact, a new report issued by the Majlis Research Centre thoroughly analyzed China’s “Regulations Against Unfair Foreign Territorial Acts and Other Foreign Measures”, arguing that it could be used as a model by the relevant Iranian authorities. [6]

However, Iranian rivals in the region still look critically at the cooperation document. For example, Abdallah al-Awlaqi, from the Saudi newspaper al-Yaum, stated that the signing of the 25-year deal could have deep repercussions on both Iran and the region. On one hand, the journalist foresaw that this deal will completely subject Iran to China’s wishes, thus undermining the country’s sovereignty. On the other hand, the renewed Sino-Iranian cooperation could ease the re-instalment of Joint Comprehensive Plan of Action, that will enable Iran to gain more influence, will help China secure its energy supplies, and strengthening its companies’ ability to operate in the area. [7]

China’s increasing presence in the infrastructure sector of the region is also a concern for Israeli media. Raul Srugo, president of the Builders of Country Contractors Association, in an interview with Ynet described the growing role of real estate and infrastructure projects, above all the ports of Ashdod and Haifa, in the Sino-Israeli relations as “worrying and dangerous.” [8] According to Srugo, Chinese presence in the Israeli construction industry brings forth unfair competition, hurts local employment, and could harbor security threats. As a solution, he suggested to implement a joint venture policy, similar to what happens in Europe, so that Chinese companies operating in Israel are required to employ Israeli workers, companies, and subcontractors. Israeli media seems also concerned about China’s mediating role in the Gaza conflict. According to Ynet, “Beijing is trying to ‘make friends with everyone’ in the Middle East”, cultivating ties with opposing factions and pushing for peace efforts in the region. [9] In these circumstances, diplomats and experts think that the Unites States’ opposition to China, Tunisia, and Norway’s resolution to stop hostilities in Gaza may improve Beijing’s reputation as a “responsible country,” thereby further isolating the United States on the matter at the UN Security Council.

Unsurprisingly, Silva Razzouk, a Syrian journalist with al-Watan newspaper, shared the same views. In her article, Razzouk praised the new Chinese role of mediator in the Palestinian issue and suggested that this, together with Beijing’s sympathetic approach to the different countries in the region, could restore the balance lost “as a result of American control […] over the joints of international resolutions which resulted in the exacerbation of problems and crises." [10]

At the same time, the relations between China and the European Union are worsening. After the two sides exchanged mutual sanctions in the past few months, the European Commission decided to freeze the implementation of the Comprehensive Agreement on Investments (CAI). Ferdinando Nelli Feroci, president of the Istituto Affari Internazionali, and Valdis Dombrovskis, Latvian European Commissioner, considered this move “a great political indicator” and “a meaningful, unprecedented gesture”, as it may signal a political rapprochement between the Union and the Biden administration. [11] In any case, Nelli Feroci expects a revision of the CAI, under better conditions for the European countries and taking into consideration American views, especially since Europe will need to strike a balance between the two global powers in the arena of technology. In this regard, the Spanish newspaper CincoDìas called the United States and the European Union to overcome their skirmishes, mostly due to Trump’s trade tariffs, to join efforts against Chinese expansion. [12]

We conclude with an al-Jazeera assessment of the situation surrounding the Grand Ethiopian Renaissance Dam (GERD). [13] According to the report, authored by Arif Abd al-Basir, Ethiopia will proceed with the second filling of the dam without having reached a binding agreement with the downstream countries, Egypt, and Sudan. The author pointed out that the two Arab countries now have a small opportunity window to either continue with a diplomatic process or carry out a military action. Moreover, the UN Security Council is unlikely to intervene, as all permanent members have direct interests in the dam project, thus giving Addis Ababa the upper hand in the issue. Abd al-Basir reported that China has invested in at least 22 dam projects in Ethiopia since 2002, although it “avoided lending money directly for the GERD project in fear of provoking Egypt, which harbours an increasing amount of Chinese investments.” Likewise, in the last two years the United States and the International Monetary Fund have granted Ethiopia loans for, respectively, USD 6 billion and USD 2.9 billion, while the United Arab Emirates invested USD 1.2 billion in the African country.

Meanwhile, Sudan continues to call on China to support its position in the matter, to acknowledge the importance of reaching a binding agreement, and to strengthen the relationships between the countries, also by condoning Sudan’s debt. [14] It is interesting to note that Sudan might soon become a stage for the international competition between China, Russia, and the United States beyond the issue of GARD. In fact, Nikola Mirkovic, a political analyst writing for the Emirati news agency Imarat al-Youm, reported that Russia is negotiating with Khartoum to establish a naval base with adequate capabilities to receive nuclear-powered ships in the Port Sudan area. [15] As “US military command in Africa is no longer focused solely on preventing terrorism, but on curbing the influence of the Chinese and Russians on the African continent”, the presence of a Russian military base, in addition to the Chinese base in Djibouti, and the Turkish one in Somalia, might push the United States to re-evaluate their presence and interests in Sudan.

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