November 2018

November heralded a suite of far ranging issues gracing the pages of Chinese media; from the reinstatement of American sanctions against Iran, to Sino-Qatari economic cooperation, to new projects for Chinese companies in the Balkans. Additionally, the Ministry of Commence, the National Bureau of Statistics, and the State Administration of Foreign Exchange have jointly released the “2017 Statistical Bulletin of China’s Outward Foreign Direct Investment” which outlines new data of interest concerning the value of Chinese assets around the world. The bulletin notes that while the value of Chinese assets in Southern Europe and the Balkan peninsula grew by 22%, the increase in North Africa and the Middle East was only 6% and 8% respectively. Though small in value in absolute terms, it is worth noting the increase in Croatia and Montenegro from USD 12 to 39 million and from 4,4 to 39.5 million respectively. The Chinese company NORINCO is also now investing EUR 160 million for the construction of a 156 megawatt wind farm in Croatia. Moreover, Chinese assets in Greece quadrupled their value from USD 40 to 182 million. In contrast, the most significant decrease in investment occurred in Algeria (dropping USD 2.5 to 1.8 billion) and Saudi Arabia (dropping 2,6 to 2 billion).

Concerning the future of Iran, Chinese commentators are pessimistic. Tian Wenlin, an associate researcher at the China Institute of Contemporary International Relations, has positively argued that that Iran, in recent times and ancient history alike, has already proven its resilience in the face of extreme external challenges.[1] However, Shanghai International Studies University’s Han Jianwei in her interview with The Observer about the future of this Middle Eastern country was far more compelling. According to Han, though the risks of large-scale protests are low, as the economic situation continues to slow and Iran faces growing external pressure the return to power of more conservative politicians is extremely probable. Signs Iran’s decline are already visible, continues Han, with declining support to its proxies in Yemen and its marginalization in negotiations over the Syrian civil war. Han concluded that it is possible a hardline government may attempt to invert this trend but whether the country has the resources to do so is far from assured. Against this background, an editorial published by the Global Times offers a clear explanation of China’s position.[2] According to the writer, China demonstrated to the United States its intention to continue economic cooperation with Iran. Hence “Beijing is not thankful to Washington” for being granted a waiver to import up to 350.000 barrels per day from Iran until June 2019. Given the fact that Iranian oil makes for about 7% of China’s total crude imports, it would be nigh impossible to find alternative suppliers of the same type of crude oil that Chinese refineries are equipped to process. The commentator concurrently noted, however, that even though Iran is not in fact a core issue for either side, current Sino-American relations are tense. China has no need to give the United States leigh way in increasing economic pressure in the name of protecting Iran. As long as China’s interests are not damaged in a serious way, the commentator seems to suggest that it is willing to compromise on this issue to improve the other areas of relations with the United States. Lin Boqiang Director of Xiamen University’s Energy Policy Research Center, also suggested this careful adjusting to the geopolitical trends, especially in the Middle East, to ensure energy security while also staying removed of dangerous quagmires.[3]

In other affairs, Sohu.com reported on an exchange of visits between representatives of the Qatar Financial Center Authority, the Madaeen Al Doha Group, and China Minsheng Investment. Minsheng’s delegation visited the Qatar Investment Authority, the Qatar Development Bank, Barzan Holdings, and Qatar Free Zones Authority. Chairman Wang Dongzhi has proposed to his Qatari interlocutors the use of Minsheng as a partner and platform for their investments in China and Asia more broadly.[4] Wang’s proposal was well received, with the two parties signing a Memorandum of Understanding during the visit. Concurrently, the Qatari Ministry of Foreign Affairs also invited the Chinese ambassador Li Chen to present plans for China’s Belt and Road Initiative to officials from a number of ministries and administrations.[5] Without being sure of the ramifications yet, it is difficult at present to interpret the recent development of Qatar pulling out of OPEC. A recent analysis of the Chinese approach to the problems between Qatar and so-called Anti-Terror Quartet (Egypt, the United Arab Emirates (UAE), Saudi Arabia, and Bahrain) indicates that China is, at present, not concerned. It is possible that a steep decrease of the value of Chinese assets in Saudi Arabia between 2016 and 2017 hint at what Beijing’s preferences could be. This speculation should, however, be taken in light of Xi Jinping’s recent words of support to the Saudi Crown Prince Mohammed bin Salman during the G20 meeting in Argentina.

In further news regarding major players in the region, the Global Times published an article commenting an October visit to Israel by Vice President Wang Qishan’s.[6] Unsurprisingly, the trip centered around technological and economic cooperation between China and Israel, with the reporting journalist keen to stress how good a fit the two nations are with regards to these fields. This notion was emphasized further in an interview with XIN Center (中以交叉创新中心) scholar, Jiang Yi. Founded in 2014, the XIN Center is itself a product of this cooperation, with the founding partners being Tsinghua University and Tel Aviv University.[7] In the midst of these positive cooperative effort, it should be noted that the Chinese ambassador to the United Nations has been agitating for renewing talks on the two-state solution.[8] Another top China expert on Middle Eastern affairs experts, Li Weijian, has warned against forgetting the issue of this ongoing issue for Israel and Palestine.[9] Li cautions that the emergence of parallel conflicts such as civil war in Syria and unrest in Yemen, have captured international attention and coverage of the Middle East once again. Moreover, he argues, many UN countries still champion the two-state solution so it is unlikely there will be any concrete initiative from China as the instigator of the issue at large.

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