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This transcript is from a CSIS event hosted on November 4, 2024. Watch the full video here.
Dr. Alterman: Hello, and welcome to CSIS. I’m Jon Alterman, senior vice president and Zbigniew Brzezinski Chair in Global Security and Geostrategy, and director of the Middle East Program at CSIS. I could not be more pleased to welcome you today to a discussion about China in the Middle East.
I’ll be joined by three special colleagues. First, my friend and colleague, Jude Blanchette. He holds the Freeman Chair in China Studies here at CSIS. Before joining CSIS in 2019, he was the engagement director at the Conference Board’s China Center for Economics and Business in Beijing, where he led the Center’s research on China’s political environment. Yun Sun, who is a senior fellow and co-director of the East Asia Program, and director of the China Program at the Stimson Center here in Washington. Rick Waters is the managing director of the China Practice of the Eurasia Group, a political risk consulting firm. He spent almost three decades as a U.S. diplomat, covering both the Middle East and Asia, where our paths often crossed. Before he left the State Department in 2023, he helped create and lead the department’s Office of China Coordination, known informally as the China House. He also served as the deputy assistant secretary of state for China and Taiwan.
The work that I have done on China in the Middle East forms some of the basis of this conversation. I recently published a report titled “The Middle East’s View of the ‘China Model’” which came out a few months ago. Some of the work within that was published in an article in Survival, “The ‘China Model’ in the Middle East,” in the April and May issue. Another article, entitled “China’s U.S. Driven Middle East Strategy” was published in The Washington Quarterly, in the fall publication. I also testified before the U.S.-China Economic and Security Review Commission on China in the Middle East last April. You can find links to those articles on the CSIS website and on the event page.
To the three of you, thank you for joining me. Welcome to this conversation. As people who think a lot about Chinese foreign policy, how often does the Middle East come up? How central is the Middle East to the way the Chinese think about their global interests and think about the world? Jude, why don’t we start with you?
Mr. Blanchette: First of all, Jon, thanks for having me. Congratulations on the report. I know we’re going to have a chance to talk about the report, but let me just say at the front end how rich and rewarding I found it. On a topic that I thought I had somewhat of a handle on, your report indicates how much more there is to explore about this important topic. You certainly have seen China’s interest in the Middle East grow in significant proportion over the last decade. Part of this is based on how central strategic competition with the United States is for how the Chinese conceptualize their interests, how they should expand them, and how they should build new relationships.
Beyond that, there’s also just a functional imperative for China seeking to build greater inroads in the Middle East. That’s just based on pure, raw economics. China sees the Middle East—even as it talks about an energy transition, even as China pumps significant amounts of money into its ability to produce batteries, solar technologies, and wind power—they’re still heavily reliant on hydrocarbons. The Middle East remains vital for that, in fact, more so, as China has become concerned about what it sees as a U.S effort to contain the country and thwart its development. Building out these relationships in the region, especially ones based on critical inputs like energy, are all the more important. I think later, we’ll talk about “axis of upheaval” and attempts to undermine the U.S.-led international order. All that matters, but I should just say that from a baseline primal instinct, Beijing is thinking about its relationship in the Middle East on very transactional terms.
Dr. Alterman: Yun, we were talking just before we went on that China approaches Africa a little bit differently than it approaches the Middle East. How would you capture that?
Ms. Sun: If you look at China’s engagement with Africa and the Middle East, both have a strong element of economic cooperation and economic transaction. But in the case of Africa, maybe “condescending” is the wrong word, but China comes as a superior partner in the region. Because China has the financing, China has the technical advantage, and China also believes that it has experience in terms of economic development and domestic governance. When China comes to Africa, there’s a strong element of, “Let us share how we made it work, and how this can be successful in your country as well.” But you rarely see that in the case of the Middle East. It’s more of a transactional relationship, but on an equal footing.
The Chinese don’t pretend to be the teachers or the lecturers of Middle Eastern countries. If you look at the framing in the Chinese diplomatic playbook, a lot of the time, the Chinese diplomats will refer to the term “mutual learning of great civilizations.” So: China is a great civilization, and the Middle East also has great civilizations, so let’s learn and cooperate with each other. That’s a very different element in terms of China’s relationship with the Middle East.
Another factor is the Chinese have had a very clear understanding from the very beginning that not all Middle Eastern countries are in need of Chinese financing. They are more so clients of Chinese technology and Chinese products rather than the recipients of Chinese assistance. That is also another element that shapes Chinese thinking when they look at the Middle East: they see partners. They don’t necessarily see countries that are deeply in need of China’s help.
Dr. Alterman: Rick, you’ve looked at China’s activity around the world, but you’ve also been engaged in the Middle East for decades. How have you seen this changing over time? I’m particularly interested in how you think China’s changed the way it engages in the Middle East over the last five to ten years.
Mr. Waters: I got my start with this issue in the ’90s, when China was first looking at a very transactional level at buying U.S. defense technology from Israel. That was a complicated period, which I know you were a part of in the Bush administration.
The transactional period has diversified over the past 25 years into areas that go beyond energy into technology. But it’s increasingly, over the past five to six years, been subsumed by the geopolitical overlay. Both things remain, the dependence on hydrocarbons, the complementarity between the Chinese economy and Gulf economies—less so with Egypt—and the desire by the Chinese to diversify at a transactional level into the technology space, where they now look at the Gulf both as a market for their technology, but also as a source of investment in areas where U.S. restrictions are closing, and the Gulf countries’ heft in Washington might allow them to do some sort of a hedge.
The newer element though—and this isn’t unique to the Middle East—is how the shift in the Chinese leadership’s view of their primary concern being the United States and the strategic competition, by our frame. That overlay increasingly affects their behavior, and we’ve seen that especially since October 7, 2022.
Dr. Alterman: In the technology space, the UAE has recently tried to signal that it is heavily weighted toward the United States and away from China. Saudi Arabia seems to be not in that same space but is perhaps considering it. Does that represent, in your view, success for the United States and defeat for China? Or some clever operating by the Gulf states as they try to navigate great power competition?
Mr. Waters: Probably more the latter. The Gulf states, together with China, will see how far they can get until the United States uses its leverage. That’s what we saw in the G42 case. If the United States is at the forefront of advanced AI—which is still the case for now—the United States has the ability, through defensive measures like export controls, to force that choice.
The Emiratis accepted that bargain, perhaps reluctantly. But we should expect that, particularly in the case of Saudis and the UAE, with their sovereign wealth funds and their national development strategies, they will look to invite both countries’ tech stacks, to the extent that they’re able to coexist within the same country. The United States and China will tussle and struggle; China advocating for the inclusion of its tech stack, and the United States applying defensive controls where they exist.
Dr. Alterman: I’m wondering then if China sees the United States as trying to exclude it from the Middle East or trying to hem in China. How is what Rick’s described perceived from the Chinese perspective? Is it seen as hostile? Is it seen as fair and what competition is?
Mr. Blanchette: One point is that I don’t think we can overestimate the extent to which a competitive framework with the United States impacts how China sees lots of bilateral and regional relations. That overlays everything. I don’t think it subsumes everything, China is still able to look at specific transactional elements of specific bilateral and regional relationships, but it overlays everything. And that has become stronger certainly since the Trump presidency, but even through the Biden administration.
The second point is China is also trying to figure out where the play space is as the United States’ relationship with the Middle East evolves. Oftentimes, we can overestimate the extent to which China sees the full chessboard. Just think about the view from Beijing right now, and the number of variables it is having to navigate. There was a lot of rhetoric right after the Biden administration’s somewhat haphazard withdrawal from Afghanistan, that essentially this is going to open up vast new vistas of strategic play space for the Chinese. You didn’t hear the Chinese saying the same thing. Publicly, there might have been some gloating about it. However, there was this quiet sense of unease that now with the United States out of Afghanistan, Beijing wasn’t entirely sure how developments would progress.
The Communist Party likes predictability more than anything. You start out with Afghanistan. You move through the Houthis in the Red Sea. You now have October 7 and the burgeoning conflict with Iran and Lebanon. Beijing will look for angles and bank shots in all of these. But, it’s also important to remember that there’s a lot going on that the Chinese are deeply uncertain about, just even thinking about their relationship with Iran, since some of the strategic gains that Israel has had with their pager attack and Nasrallah’s death. Over the last week or so, you’re already starting to see Beijing, at the margin, recalibrate its approach vis-a-vis Iran.
There are some tentative green shoots of Beijing toward Israel, because they’re again wondering if the horse they backed in the form of Iran wasn’t quite as strong as they wanted. That is a long way of saying, they certainly have a plan, but Beijing is dealing with an awful lot of contingencies in the Middle East that is making it challenging for them to find a straight-through line.
Dr. Alterman: Yun, you wrote an article about how Afghanistan was an example of China sort of filling into the vacuum when the United States pulled out. That this was China looking for a way to maybe strike some deals or do some mediation. What are the parts of China’s presence in Afghanistan after the U.S. withdrawal that you think represent China’s ambitions for its role in the Middle East? And how do you think it might be different?
Ms. Sun: If we look at how China approached Afghanistan since the U.S. withdrawal, I would say “regionalism” is a key word. China organized the foreign minister’s meeting of Afghanistan’s neighbors, a mechanism that meets regularly to discuss what the region and, especially, the neighbors of Afghanistan can do. The mechanism was first set up in the prevention of a potential implosion of Afghanistan.
They were afraid that there will be millions of refugees leaving Afghanistan and flowing into neighboring countries, which was a concern that was shared by most of the Afghanistan’s neighbors. That mechanism has played some role in terms of economic engagement and assistance provided to Afghanistan since the Taliban took over. And now, they’re definitely morphing towards the direction of what would be a regional economic engagement plan. But, there are preconditions, including the Taliban’s attitude toward Islamic organizations that are still being harbored inside the country.
There are conditions, but you see a Chinese attitude morphing away from the previous sole focus on terrorism. Now, they’re talking more about economic cooperation, economic opportunities, and how the region can come together in terms of working with Afghanistan. Just this past week, we saw the resumption of the China-Afghanistan railway.
Chinese analysts see that as a sign of China moving forward with more economic engagement with the Taliban regime—despite the fact that a diplomatic recognition of the regime has not yet happened. China has already made it quite clear, at least in private channels, they won’t be the first, they won’t be the last, but they will be one of the first.
Dr. Alterman: Rick, as somebody who was both a diplomat out in the field and also a senior official in Washington, how do you see China approaching the tasks of diplomacy, and these multilateral structures? Is it profoundly different from the United States? Is it contrasting with the United States but has important elements of similarity? As somebody who did U.S. diplomacy, what’s the same and what’s really different?
Mr. Waters: One element of it—which is similar to what China has done in other regions—is they tend to create dedicated structures that position them to deal with countries on a bilateral basis, maybe under a plurilateral grouping, where they can deal with them from a position of advantage. You mentioned some of the ones in South Asia. In the Middle East, you have the Arab League mechanism, and you’ve also got one with the GCC.
At a more practical level—and I don’t mean this in an overly-judgmental sense—the depth, for better or for worse, that U.S. diplomats and policymakers had in the Middle East, the Chinese lack. Their surface area is much more transactional. It was business relationships in the Gulf. That is changing. But when you look back to the period when Xi Jinping first put forward his four-point Palestinian proposal, you didn’t have Martin Indyks and Dennis Rosses, with deep relationships with the key players that inform that document.
It was more of a top line declaration of principles, meant more for a geopolitical purpose. That is one piece that is changing. Looking at the evolution of their diplomacy on issues like Palestinian reconciliation, or the Iran-Syria deal, they’re learning. Their depth is growing. They’re starting to train mediators. They’re trying to build deeper ties, but they still have a long way to go before they have that intuitive understanding of the region. This is particularly the case outside of the areas they’ve been involved in, places where their diplomacy could become more active and involved if they made that choice.
Dr. Alterman: The other question is what their ambition regarding their diplomacy is? Do they think that mediation is going to get wins? What would a win look like in those circumstances?
Mr. Waters: Up until now, they’ve had the advantage of being a classical IR hedging state in the sense that they have benefited from the existing order without having to make significant investments. It’s great for the United States to be the external security provider while China sells domestic security equipment. Where things are changing, to Jude’s point a second ago, is that China is ultimately a status quo power. They’re not interested in a disruptive or escalatory environment that affects their interests. They can be reactive when it comes to how they use their leverage with Iran and others when they feel things are getting out of hand.
Dr. Alterman: The question is whether some of this mediation is meant to throw shade on U.S. mediation and how that plays out. In a regional environment, there are a number of opportunities for mediation because there’s so much conflict.
Mr. Blanchette: There’s a forest and trees dynamic to this. At a macro level, Beijing is attempting to tell a new story that transcends Middle Eastern concerns and extends through Europe and over to the Indo-Pacific. That new story is that there is an order breaking down and this is an order that the United States and the West have built and run for the better part of 70 years, but it is atrophying and disintegrating.
The international community, outside of the United States and its Cold War lackeys, are watching disruption and instability in the Middle East, which is “caused by Israel.” We are watching insecurity in Europe, which was caused by NATO. We’re now seeing the United States bring this instability out into the Indo-Pacific, which is why Beijing is warning about an Asian NATO, even though there is not anyone advocating for an Article 5-like treaty organization.
One of the reasons they’re doing this is to leverage this concern and the flashpoints around the world to say that “We, the Chinese, are bringing new solutions and answers to this.” You see this with China articulating the Global Security Initiative (GSI) and the Global Development Initiative (GDI). Now, scratch the GSI, and there still is not much by way of details, but that’s largely beside the point.
By putting out peace plans for the Palestinian issue and for Europe, Beijing is trying to sort of say, “As one order dies, one order is taking hold and we, the Chinese, are part of building it.” To Rick’s point, this is difficult trigonometry because, functionally speaking, China would like to see elements of the existing order pertain and endure.
This is, as the Chinese say, trying to see progress amidst stability. They’re looking to make marginal advances in rewriting this macro narrative of the international order, but doing so in a very calibrated way that. Looking at China’s relationship with Iran right now, it’s clear that they are trying very hard not to give Iran a green light to retaliate against Israel.
It’s not because they’ve become a friend of Israel, but because of some of the primordial reasons for China’s interest in the Middle East. They do not need to see a massive spike in energy prices right now, especially while their economy is performing weakly. This is as close to 3D chess as you get, in terms of the number of interests that China is trying to advance. We can talk about how well they’re doing it, but the macro story is an important overlay over some of these more tactical considerations by China.
Dr. Alterman: Arguably, the sort of version 1.0 of this was the Belt and Road Initiative, which got tremendous attention in the Middle East, as every country in the Middle East saw itself as the hub of the Belt and Road Initiative in the region. You certainly had the launch of the Asian Infrastructure Investment Bank (AIB). But we keep hearing the Chinese don’t really have the capital to support these. That the Belt and Road projects have really diminished. AIB seems to have disappeared, at least for my consciousness. Has China abandoned these, refined these initiatives, learned from these initiatives? How do we think about those initiatives as we think about China’s longer-term objectives, Rick?
Mr. Waters: I was in Beijing, actually, for the last Belt and Road Forum. To be fair, I didn’t make it to the forum. I was stuck in traffic the whole time. But I mention this because what was clear to me is that from China’s perspective, the Belt and Road Initiative is not going away. There was a little bit of a false demise during the COVID period when lending dipped precipitously. If you look at the numbers now, it’s back up close to where it was in 2018, but the composition has changed.
This is the big difference. It’s moved away from big ticket infrastructure to smaller projects. It has an institutionalized secretariat and it’s increasingly reflecting the lessons they have learned from the excesses of the early period. In the Middle East, digital, health, renewables, creating markets for these products and creating the ability to leverage those economic relationships to give influence in standard setting bodies, this is more of how conceptually the BRI will look going forward. And that is very consistent with their overall economic interests.
Dr. Alterman: Yun, that fits with your concept that the Chinese are targeting, directing, learning, or adapting. It is more dynamic than the way in which a lot of people in the United States see China. The see China as having a direction and an indomitable march toward a predetermined destination.
Ms. Sun: China still does. BRI is Xi Jinping’s signature flagship foreign strategy. I agree with Rick that it’s not going to go away. The Chinese will never declare BRI has ended, or BRI has succeeded, or BRI has failed. That’s not going to happen. We’re going to see it morphing from different stages.
From the beginning, there were a lot of white elephants, big infrastructure, and a hard infrastructure-oriented approach. Then, there was capacity building focused on bilateral trade facilitation and trade promotion, especially in the case of Middle East and Africa. But now, we’re seeing even more market segmentation.
In terms of the BRI in the Middle East, you have to look at specific countries. In Iran, BRI looks very different from the UAE, which also looks very different from Saudi Arabia. China has differentiated within BRI and has different priorities and different approaches towards different country. For example, the UAE is seen as China’s hub for regional trade. A lot of the Chinese export go to the UAE first and then disperse among the region. For Saudi Arabia, we see bigger ticket items like cooperation and the alignment of China’s BRI and Saudi Arabia’s Vision 2030.
For different countries, there are definitely different priorities. For countries that are poorer, like Jordan, Syria, or even some of the countries in North Africa, the Chinese BRI approach is leaning more towards a traditional approach focused on trade facilitation and agricultural capacity building. Different countries have different priorities.
Dr. Alterman: Jude, you and I have talked at various points in the last several years about what the Communist Party is thinking and its internal dynamics. How much of the Chinese approach to the Middle East and competition with the United States is a reflection of Xi Jinping personally? How much of it is a consequence of the correlation of economic and other forces around the world? If China goes through an economic dip, as it may, if it had a different leadership, do you think China would be likely to take a different approach to these issues? Or do you think there is ideological uniformity among the leadership that Xi has been able to forge, and there aren’t really alternative voices?
Mr. Blanchette: Great question. The honest answer is I don’t know, but I could easily imagine a completely different leadership group in Beijing and us having approximately the same orientation of policy towards the Middle East. This feels like a classically Chinese interest-driven approach to diplomacy, and interestingly one where the narrative of axis of upheaval runs up a bit against the rocks of reality. The Chinese are quick to calibrate and recalibrate their interests based on who they think the stronger power is and who they need to build a good relationship with to have influence in the region.
They are, for all intents and purposes, blind to regime type. Ideologies matter. You can’t understand Chinese policymaking without understanding ideology, but here, I imagine that if we had a different set of leaders, I struggle to see how things would be that different. So many of the specific bilateral strategies at work here make sense given what China needs to accomplish, diplomatically and in terms of energy policy.
I can also link this to the last question on BRI. BRI and your view of it is very much a Rorschach test for how you think about the Chinese. There’s two stories you could tell about it, even as it pertains to the Middle East. The first story is that BRI shows the capability of the Chinese system to fall on its face. They come out big and brash, spending a lot of money, buying bowling alleys in Poughkeepsie, New York. Then they find that they’ve overspent.
The other way to look at it is that this shows the strengths of the Chinese system because they came out large, overspent, and then never recalibrated. If you look at BRI investments into the Middle East right now, in some ways, they’re much more targeted on energy, digital infrastructure, and attempts to facilitate and build out Chinese companies, tech platforms, and technology for integration into the Middle East. I think both stories are true. The BRI was gut out over its skis and showed many the weakness of the Chinese system, but it has the ability to recalibrate it. We are not talking about Africa, but if you look at spending in Africa and nominal BRI, they’re moving into critical areas like rare earths and critical minerals. They are being strategic. The wallet is thinner. They’re going to spend less money, but as Xi Jinping said at the BRI forum, it’s smaller and smarter investments.
Dr. Alterman: Rick, you deal with business folks all the time. If the Chinese economy continues to soften and the rest of the world’s economy continues to strengthen, China seems less attractive to both investors around the world and to Middle Eastern states. How does that affect China’s reach in the Middle East? How do you think it’s going to affect Chinese behavior in the Middle East?
Mr. Waters: In a couple of ways. First, the situation in China right now for many of its companies in, say the renewables sector, is one of dramatic over-supply and limited profitability. They’re looking for external markets, and they’re seeing the United States close up, and they’re seeing Europe tighten but not close altogether. They’re centered on the Middle East as potential safe space, both to create new overseas capacity and to export it abroad. There is an interesting confluence between the drying up of U.S. and many European pools of capital and China’s need for investment funds and their technological know-how. I think that is coming together Saudi Arabia and the UAE, in particular, in sectors like renewables. But how much will that matter on a macro level? There are more variables than just the Middle East. It will depend on where trade protectionism goes, not just in the United States and Europe, but even among many of China’s allies. What has become a very mercantilist model is creating trade barriers to those products, even among its friends in BRICS.
Dr. Alterman: Let me shift gears a bit to talk about how Chinese diplomacy has adapted to a very different kind of global environment. Jude talked about China edging closer to Israel and perhaps away from Iran through the war in Gaza and the subsequent rising conflict between Israel and Iran. Is China agile enough to do that, or do you think China is likely to trip as it tries to reposition?
Mr. Blanchette: You can always trip forward and still make progress while falling on your face. Maybe that is a third possibility. If I can zoom out a bit, we are seeing this playbook happen in a number of regions right now. You constantly see this undulation between charm offensives and overly aggressive Chinese actions which marginalize or create setbacks. This is a recurrent pattern of Chinese statecraft. Once the Chinese make a royal screw-up, or they push too hard and they squeeze too hard, they can turn on a dime and try to recalibrate those relationships.
I think what’s different though is the receptivity to some of the nation states, which have been on the adverse end of some of these Chinese actions, to wanting to recalibrate. We talked about Israel. I don’t know this issue well enough, and other will have views, but I would be surprised if, after more than a year now of the Chinese very overtly taking the side of Hamas after October 7, the Israeli public has an appetite to go back to where they were with China in 2018 or 2019.
So, I think China is nimble enough to affect recalibrations. China can recalibrate very quickly with the leaders of many of these nation states in the region, but their ability to understand sentiment at the more popular level is woefully inept. They are looking at how to recalibrate with Saudi princes and with elected leaders, but I think they underestimate how much they have upset people for quickly abandoning Israel after October 7 and making a pivot to speak for the Global South.
Dr. Alterman: Right. China saw Gaza as an opportunity to pick up the mantle of the Global South and saw itself being the state that could articulate what billions of people around the world felt. China really instrumentalized this idea of a Global South as a way to differentiate itself from the United States and criticize the United States for supporting Israel.
I’m curious how you’ve seen this Global South concept develop. It seems to me that China has nurtured the idea of a China model, at least in the minds of many governments around the world that want to be like China and have that economic growth and stability. Now there is this shared resentment and sense of disenfranchisement. How does that look from a China perspective? In terms of identifying with the Global South, it does feel like something the Chinese are really trying to breathe even more life into because it serves so many Chinese interests. It isolates the United States and its closest allies and associates China with the bulk of the world’s population and an increasing fraction of its economic strength.
Ms. Sun: I feel that the Global South narrative in China has a strong element of reframing the international system. When we talk about great power competition between the United States and China, we’re primarily talking about a bipolarization of the international system. Through this Global South narrative, what the Chinese are trying to reframe is that this competition or this problem is not between the United States and China as a status quo power or revisionist power. In fact, it is the Global North or the developed world, represented by the United States, versus China, which is seen as a representative of the developing world. So, in a way, when we see China talking about the Global South, I think there is a natural sense of China being the representative or being the face of Global South, fighting a battle against the United States on behalf of the broadest developing country community. I think that’s basically the essence of what the Chinese are trying to reshape. This is not about the United States and China. This is actually about the United Sates versus developing countries that China is trying to fight for.
There is a caveat, though. In China, there are at least two debates on the Global South narrative. The first one is, is China part of Global South or Global East? If you think about during COVID in 2021, Xi Jinping said, “Well, this is a rise of the East and the decline of the West.” At that time, China did not talk about the Global South being China’s core mechanism or the core angle that China was trying to aim for. And that raises the question: is China really the Global South, which is an economic term, or is China essentially representing the Global East, which is seen more as a political and ideological term? That’s one caveat. Since 2023, I think the Chinese have tried very hard to differentiate between China’s Global South and Russia’s Global East and say, “We have nothing to do with the Global East.”
The second question is whether China really is a natural leader of Global South. That’s a much deeper debate, even the Chinese policy community, because there’s India, there are many countries in the Middle East, and there are also countries in Latin America and in Africa, each representing a core corner or a strong voice within the Global South. So, you’re absolutely correct that China is still trying to breathe more energy and ambition into the Global South narrative through a coalition of voices and countries that are not satisfied with the global order that—in the Chinese narrative—is defined and dominated by the Gobal North. Through coalescing with these different power centers in different continents that represent the Global South, the Chinese are trying to form a broad coalition against the United States.
Dr. Alterman: Does that sound right, Rick?
Mr. Waters: You hit on a really important point, which is that China is not the only leader in this coalition. They expand the BRICS, but they brought in India. They focus on the SCO, but it’s very difficult to see how far those groupings can get the further they expand, because the lowest common denominator becomes less and less. I’m intrigued by something, Jon, that you had in your report. If you go back to the 2016 Arab position paper, the Chinese kind of laid their cards on the table about what their real interest is: defense of their own system and model. While I do think their ambitions go beyond that, the basic bargain they put forward in that Arab position paper was their narrative of the One China principle, which is their explanation for how Taiwan is an internal conflict and how it should be treated under international law. We’re starting to see them leverage this at a practical level in the General Assembly or in the Human Rights Commission, where the vote count reflects the ability to mobilize disaffected portions of the Global South in a numbers game. But how far you can go beyond that into alternatives to the dollar or more meaningful plural-lateral actions remains to be seen.
Dr. Alterman: It’s a little bit like the Lilliputians tying down Gulliver. You don’t have to be completely successful in all the things you do; you just have to encumber the United States. As you pointed out, the remarkable thing about the Arab strategy paper is that it lays out a whole list of things that China will do for Arab states. The only request is to recognize the One China policy, for which China expresses its appreciation.
Mr. Waters: Right.
Dr. Alterman: It’s a remarkable bargain from the point of view of Arab states. It does seem to me that China is really good at assessing what countries want from it. It feels to me like the U.S. government is not very good at assessing what people want from the United States. It’s good at telling people what they should get. China does seem to be much better, as a non-democratic system, at understanding what populations and leaders want. The United States, which has a system that, arguably, is totally built on understanding what people want, is good at telling people what they’re going to get and not very good at understanding what they want. Why do you think that is?
Mr. Waters: China is very good at doing that with elites. Their model is exceptional at elite capture, particularly with authoritarian regimes. It’s less good at assessing what happens below that level. Jude sort of alluded to this point earlier. A lot of their strategy towards Gaza after October 7 was built around a notion of what would play well among elites. But now, the foreign ministry statement that Jude pointed out, tells us they’re having to recalibrate a little bit. They’re sending signals for the first time that Israel does have legitimate security interests. Some element of their challenge going beyond an elite capture model is that is what their system is and understands. It also has to do with the way their overseas missions operate. They’re under very strict rules. Often their diplomats are not allowed to just mingle in society, but they have to do meetings in groups of two. This has very little to do with their global strategy and everything to do with the discipline commission and the ways the CCP manages the internal structure. It makes it hard for them to have a very clear sense of where other power centers in a society might be, how democratic or semi-democratic polities operate, or how to engage an authoritarian system after a regime has changed, when the power dynamics may scramble and you have to reconnect to them.
Dr. Alterman: Jude, do you have views on that?
Mr. Blanchette: Without detracting from the skill of the Chinese system at elite capture, there’s a simple story to tell here. China understands that the way to the hearts of the vast majority of leaders is money. I don’t think we would be sitting here having a panel discussion about this if China was the 118th ranked country in the world in terms of economic size and the 27th largest trade partner with all of these countries, but it is the largest trade partner with all these countries. Going back to things like the BRI, China has something to offer. In some sense, it is not surprising. There’s no 3D chess going on. It is simply the fact that they have a checkbook and are willing to write the correct checks to the right people at the right time that gives them this capability.
It is an asymmetric competition in that sense, because the United States does not have the bandwidth to operate legally in some of the areas that China can. The United States take concerns about corruption seriously. China isn’t encumbered by that. China has the space to create new, novel mechanisms for engaging with countries. They are just less encumbered by bureaucracy than the United States. Some things like BRI would take the United States probably 78 years to conceptualize and implement, but China was able to push this out pretty quickly.
I’m not trying to detract from this. There is a sophisticated playbook that China runs. But at the heart of this, it’s important to remember that they’re just willing to pay for influence in a way that the United States government is not legally or bureaucratically capable of. That explains some of this.
Dr. Alterman: Broadly, what should the U.S. government be doing, not so much to combat Chinese influence, but to deal with growing Chinese influence in the Middle East? What should it prioritize as it thinks about a challenge from China to at least untie some of the close relationships the United States has established in the Middle East over the last 50 or so years?
Ms. Sun: I’ll leave that question to Rick and Jude, but I can talk about how the Chinese have decided to proceed in the Middle East despite the fact that they see a narrative in the United States that China is in the Middle East to displace or replace the United States. Also, China recognizes that its approach in the Middle East is met with pushback, not only from the United States—who is still the sole security provider in the region—but also from the regional countries. The heightened strategy does carry a cost.
For the Chinese, they have decided to focus on the strengths of their own strategy, independent from what the United States may or may not do. They’re focused on relationship building with individual countries, independent of U.S. policy or U.S. pushback.
I find that strategy eventually coming to what the Chinese are preparing for after the U.S. election. It goes back to the calling that China should build up its own strengths and build up its own policy in each individual region instead of making that policy dependent on what the next administration may or may not do. In the end, it is self-enforcing. But it also reflects a reality or recognition on the Chinese side that there might be very little they can do to shape or change U.S. perception and U.S. policy towards China in this particular region. So, they decided to move forward with or without the U.S. approval.
Mr. Waters: I can delve back into Middle East policy in a semi-informed way, and you can tell me where I’m wrong. There are probably three initial thoughts that I would have. One is that the United States has been the security guarantor for the region for all our lifetimes. Yet, for that to continue in a way that doesn’t require the United States to be constantly drawn in in terms of personnel, blood, and actual direct involvement, that requires something that we need for every other aspect of our China policy too. It’s fixing the defense procurement system because right now China only sells 5 percent of the weapons to the region. The preference is still for us and for defense support more broadly, particularly in Saudi Arabia. We have unparalleled relationships and advantages, but if our system can’t deliver, that will be a challenge.
A second broad area has to do with the questions we’ve tossed around here about how the respective systems operate. A Chinese ambassador has power over the state-owned enterprises, the lending spigots, and the full menu of options that are available to the Chinese government. Whereas a U.S. chief of mission probably can’t get confirmed for two years by the Senate, and when she or he gets to post, it’s a negotiation with USAID or an opinionated head of an agency about how to use and deploy U.S. resources and diplomatic bandwidth. Strengthening the chief of mission authorities and getting people to post matters.
The final piece, which goes beyond the Middle East region, is to have a regional strategy that is not all premised around China. It has to be tailored to the value proposition in that region, including the affirmative economic piece.
Dr. Alterman: Jude, do you want to weigh in on this?
Mr. Blanchette: All I will add is a great summary of what the United States should do at the end of a report written by Jon Alterman, which calls for establishing a clearer set of U.S. priorities, making assessment and partner motivations—and this echoes what Rick just said—crafting a mix of incentives and consequences that can shape partner behavior. The incentives are big here. We were just having a discussion on China’s ability to zero-in on what a given stakeholder needs or wants and the ability to execute on that.
I think this is quote from Henry Kissinger. If it’s not, he won’t be around to challenge it. But simply to say, “Show me an area where the United States is playing its A-game and China is still winning.” That is often not the case. It’s areas where the United States is playing its B- or C-game that China finds avenues for advantage. Jon, this is a space you know extraordinarily well, so I’d love to hear your thoughts on this. It seems to me that China is operating in an area where the United States’ vision for what it’s trying to do is a bit confused right now.
Dr. Alterman: Let me ask you a final question, and then I want to leave a moment for any questions that you have for me. What do you think success in the Middle East looks like for China? I’m not sure they will ever think that they’re going to have won, because the game is never over. However, if somebody were able to craft a successful Middle East strategy for China, what would the characteristics of the actions be and what would the characteristics of victory be?
Ms. Sun: Do you have a timeframe? Because China’s carbon strategy does have a date to it.
Dr. Alterman: Give me options.
Ms. Sun: China aims to achieve peak emissions by 2035 and carbon neutrality by 2060, which means that Chinese energy dependence on the Middle East is going to change. Is there a timeframe we are using to measure success?
Dr. Alterman: Give me an answer for five years from now, and then one for 15 years from now.
Ms. Sun: In five years, China will see its continued energy dependence on the Middle East as a crucial factor in their strategy towards region. They will want to maintain relative regional peace and stability so that they can continue their crude import from the region. The maintenance of stability in the region will be a core criteria for their Middle Eastern strategy and the success of that strategy.
In 15 years, China would like to see the emergence of some regional security architecture that would act as a replacement of the current U.S.-dominated security structure. China is very keen on fostering the independence and autonomy of Middle Eastern key players in the region, including Saudi Arabia, Iran, and the UAE to think creatively about what the future regional security architecture will look like.
Dr. Alterman: Rick, to you.
Mr. Waters: Depending on which timeline you choose, at the level of the global order, China wants an order that’s safe for their political system and for their model of governance. That implies making incremental progress in shifting the global coalition, both in the UN and specialized agencies, and at a broader level. Economically, they want to flip it from being dependent on hydrocarbons to making themselves the main supplier of advanced technology and renewables. They’re making some headway along that road. At the level of the U.S.-China competition, they don’t mind if the Middle East is the graveyard of our empire. It is part of the “East is rising and West is declining” narrative. The more that the United States is bogged down, and China prevents pivots, rebalances, or Indo-Pacific strategies from materializing in a way that threaten their immediate interests, so much the better. So long as it stops short of outright instability that affects China’s interests.
Dr. Alterman: Jude, do you want to weigh in?
Mr. Blanchette: It’s all been said well.
Dr. Alterman: It’s been said very well. Jude, you asked if there will be time to ask me questions. We’ve left two minutes. I’m open to whatever slings and arrows you want to throw.
Mr. Blanchette: Let me just ask one question in light of time. You’ve been having a lot of discussions with interlocutors in the Middle East as you’ve been working on this report, and you know the region well. I wanted to go back to something Rick had mentioned about BRICS. In your conversations with the elites in the Middle East, how often does joining multilateral institutions that China is shepherding, such as the Shanghai Cooperation Organization and BRICS, come up? In other words, Beijing’s objective is to enlarge some of these institutions to create momentum behind this shift from an old international order to a new international order. From a would-be participant in an SCO or a BRICS, what is the value proposition for some of these countries potentially joining? Do they see any there? Or is it just a cheap way of essentially signaling to Beijing, “We’re on your side,” but it doesn’t actually require much of them?
Dr. Alterman: There are several things going on. First, they’re very weary of being drawn into great power competition battles and being the victims of them. They’re very interested in signaling, “We’re not choosing sides. We don’t want to choose sides.” That’s sometimes to the deep frustration of U.S. diplomats who feel that they must choose sides because this is a moral issue about the way that we guarantee security in the world. However, there’s a very deep interest in the Middle East in not choosing sides. I don’t hear very much about BRICS, SCO, or any other sort of institution. The Arab League has been around since 1945 and has not done much in the last 80 years to promote Arab unity, which was its goal. People are not looking for more meetings to go to, although they certainly will go to the meetings.
What they’re really interested in is this notion of a Global South and this notion of like-minded states, which a lot of Arab states think they could have a leading role helping to guide. They like the idea of having alternatives to U.S. hegemony whether it’s on economic, political, or social reforms. There is a sense that the United States comes in with a whole set of asks which are potentially destabilizing. As we’ve talked about before, there’s a sense that China is a status quo power, and the Middle East is full of status quo powers. They can build up this sense of a Global South by saying, “We’re not picking sides, but we’re pushing back on U.S. hegemony, and we are having some way to keep the United States from destabilizing our societies.” That notion is very attractive. I hear a lot more about the Global South than I hear about China. I hear the Global South being spoken about in remarkably optimistic terms. There’s a sense in which people are less hopeful for the Chinese economy and Chinese investment. I have a friend who used to run a Chinese investment fund in Kuwait. He’s now outside of Kuwait and doing other kinds of investment. It has nothing to do with China. The people who thought they were going to make millions in China have abandoned that. But there is this sense that the Global South could provide huge opportunities.
Getting out from under the thumb of the United States is attractive, even for countries that want to rely on a U.S. security umbrella and that have a fundamental strategic orientation toward the United States. It’s an attractive notion to have other options and be able to think about approximately 80 percent of the world’s population and more than 50 percent of the global economy. China, in a very deliberate way, is pushing the Global South brand without necessarily pushing China. That serves the same purpose and doesn’t arouse all the same antibodies.
I could this for about six hours, but that’s not fair to any of you. I am so grateful to you for taking an hour to talk with me about these issues. I have enjoyed talking about all of them with you before. I will look forward to talking about these issues with you in the future. For now, I just want to say thank you. Thanks to all our viewers, and we look forward to seeing you again soon. Thank you.
Mr. Waters: Thanks, Jon.
Ms. Sun: Thank you.
