October 2022

The 20th National Congress of the Chinese Communist Party (CCP) and the possible regional consequences of the newest round of American trade restrictions on China fueled much debate in media across the wider Mediterranean region this October.

Israeli experts seemed the most concerned about the US’ tech sanctions on China. In an interview for Globes, Yair Geva, head of the high-tech department at Herzog, one of Israel's largest and most prominent law firms, revealed that the new American regulations are forcing Israeli companies that develop and produce sensitive technologies, such as integrated circuits and semiconductors, to obtain special licenses to continue to interact with their Chinese counterparts. [1] This will not only affect many Israeli start-up companies, but given the Chinese market’s importance, Geva predicted that Israel’s tech sector will likely suffer severe consequences as well. Indeed, some analysts predict that major companies like Applied Materials, Lam Research and KLA will experience a 5-10% decrease in sales.

Eran Nitzan, an expert on US-China relations who served as Israel’s economic advisor in Washington, stated that Israel will inevitably be affected by the US-China competition. [2] Nitzan is convinced that Tel Aviv needs to find a way to maneuver between its traditional, familiar, but overbearing American ally and China, a new power which plays an important role in its economy. However, given China’s “foreignness” and its deep ties with several actors in the Middle East hostile to Israel, above all Iran, Tel Aviv has no choice but to continue to stand by the United States to protect the existing global order and, therefore, its own national interests.

Some Arab commentators reflected on the state of Sino-Israeli relations as well. Palestinian media agreed that the pressure exerted on Israel by the United States to limit its interactions with China will likely to grow and that Israel will increasingly struggle to maintain its fruitful ties with the East Asian power. [3] Another perspective is offered by the Lebanese media outlet al-Mayadeen which published an interview with Dr. Shaher Al-Shaher, a professor of International Relations at Sun Yat-sen University, who pointed out that the relations between Israel and China are far more complex. [4] Tel Aviv and Beijing are at odds on several issues. While China diplomatically supports the Palestinian cause and has ties with Iran, Israel maintains strong relations with Taiwan and has condemned Beijing for its policies in Xinjiang. Nevertheless, China remains interested in having positive relations with Israel due to its important geostrategic location in the context of the Belt and Road Initiative as well as economic reasons such as the significant amount of Chinese infrastructure investment in the country and the large amount of the trade between the two states. Therefore, the professor estimated that the economic interactions between the two parties will not be heavily influenced by their diplomatic quarrels. On the other hand, Al-Shaher recommended that Arab countries strengthen their ties with China to be treated as strategic and equal partners.

Interestingly, Washington’s new policies also left a mark in the Tunisian debate. Following a letter from the US Senate to US Secretary of State Anthony Blinken asking for G7 aid to Tunisia to be given on the condition that democracy be restored in the country, Youssef Cherif, a political and international relations analyst, claimed that this event marked one of the lowest points in the already uncertain relations between the two countries. [5] Moreover, Cherif linked the substantial decrease in loans from Washington to the renewed tensions between the United States and China. Nevertheless, according to him, Tunis “must not in any case take position” in this rivalry because it would have dire consequences for the country’s already unstable domestic situation, economy and diplomacy.

For their part, Iranian media assessed the outcomes of the 20th National Congress of the CCP positively. Professor Fatemeh Mahrouq, for example, stated that the further concentration of power in the hands of President Xi Jinping and his focus on industrial and technological advancement will unlikely lead to any significant change in China’s foreign policy in the next five years, especially for what concerns Iran. [6] According to Mahrouq, this is because the continuing tensions with Washington will make Tehran more strategically important for Beijing. An article published by Donya-ye Eqtesad went even further, claiming that the deepening confrontation between China and the United States in both East Asia and the Persian Gulf “lays the groundwork for the strengthening of cooperation between Tehran and Beijing in the fields of military and security.” This is because of Iran’s reputation of it being in the “anti-American camp” and having a “revisionist” approach to the international order. [7] It should be noted that confidence in China’s support seems also to stem from Beijing’s statements regarding the EU’s intention to impose new sanctions on the Islamic Republic because of its repression of the ongoing protests in the country. Donya-ye Eqtesad pointed out that China’s intention to prevent a so-called “color revolution” in Iran highlights Beijing’s need to maintain stable relations with its allies to secure its own national interests and foreign policy goals. [8] Nonetheless, the Iranian debate on the usefulness of the country’s membership in the Shanghai Cooperation Organization (SCO) continues to be heated as the government launched the final parliamentary procedures to complete the membership process. In this context, the conservative political activist Mohammad Mohajeri stated that Tehran is unlikely to be able to significantly increase its economic relations with the SCO’s other members and observers, most of which, such as Turkiye and India, still rely heavily on Washington rather than on the organization’s network and will therefore avoid Iran as long as the United States and the UN Security Council’s sanctions are not lifted. [9]

Iranian observers also paid much attention to the development of Sino-Saudi relations, claiming that “trade between China and Saudi Arabia reached its highest recorded values since the two countries established political relations.” Saudi Arabia was the first destination of Chinese foreign investment in the first half of 2022, for an estimated total of 5.5 billion dollars. [10] In anticipation of Xi’s expected visit to Riyadh in December, there have been several summits and diplomatic meetings in October between Chinese and Saudi officials during which both sides stressed the need to strengthen bilateral cooperation. During a meeting between the Saudi Minister of Energy and his Chinese counterpart, the two officials expressed their countries’ willingness to expand cooperation to research and develop technologies in the fields of nuclear and renewable energy. [11]

Similarly, the National Iraqi News Agency focused on the positive impact of Chinese companies’ presence in Iraq, especially in the southeastern provinces. For example, several Iraqi officials praised PetroChina, one of the first Chinese companies to participate in the country’s post-war reconstruction, for its role in the oil sector of the Maysan Governorate. [12] Additionally, representatives of the Basra Governorate announced that they succeeded in granting the tender for the construction of a desalination and electric power plant to a Chinese company rather than to the British one initially selected by former Prime Minister al-Kadhimi, who has often been criticized for not having increased cooperation with Chinese entities. [13]

On the contrary, while announcing that a Turkish company won a contract for military drones over a Chinese competitor, [14] this month Turkish media described China as a potential economic rival, especially in North Africa. In fact, due to Ankara’s efforts to become a vital hub for supply chains since the outbreak of the Covid-19 pandemic, it also started to invest in North African countries like Egypt that have lower energy and labor costs. However, Chinese companies have been doing the same, moving their production to Egypt to benefit from the free trade agreements between Cairo and Western countries. According to Turkish businessman Gürkan Tekin, this move poses the biggest threat to Turkiye’s investments and exports. [15]

Finally, we also report that France continues to be wary of China’s, and to a lesser extent Russia’s, influence in the African continent. Nicolas Baverez, a high-ranking French official, lamented that many African states have started to diversify their relations, thereby “destabilizing” France’s position in Africa. [16] China now controls the continent’s strategic assets through its exports (that grew twenty-fold over the last decade) and investments in infrastructure projects. According to Baverez, Beijing is using its influence to try to “mobilize them [the African countries] in its crusade against the West.” He called on France and Europe to rearticulate their relations with African countries by making them aware “of the risks of being influenced by China.” For him, Europeans should also propose a “New Deal for Africa” that takes into consideration the continent’s economic, diplomatic and security transformation.