‘More of China, less of America’: how the superpower fight is squeezing the Gulf

As the first senior United Arab Emirates official to visit the Biden administration touched down in Washington, the message the Gulf state sought to promote was “the strength and continuity” of the partnership between the two countries. Yet when Anwar Gargash, diplomatic adviser to the UAE’s president, sat down with his American counterparts it was another of the Gulf state’s relationships that was the focus of much of the discussions: China.

The UAE has long been one of Washington’s closest Middle East partners; investing heavily in US assets, buying tens of billions of dollars of American weaponry and supporting the superpower in military operations, from Somalia to Afghanistan and the battle against al-Qaeda militants in Yemen.

Its deepening ties to Beijing, however, are adding a layer of strain to the alliance as Washington takes an increasingly hawkish stance towards China, and raises concerns about the potential security implications of its partners using Chinese technology, such as Huawei’s 5G telecommunications network. It is set to become even more sensitive for the UAE as it prepares to take a temporary seat on the UN Security Council in January, fully aware that it risks being squeezed between the competing interests of the two superpowers.

“In the past, so-called middle [sized] states could avoid making choices, but the UAE’s going to come under increasing scrutiny from both sides, depending on how it votes and the signalling when it is on the council,” says a person briefed on Gargash’s discussions in Washington. “The US wanted to have a conversation about this, and the sensitives about China overall.”

It is “going to come down to the hard choices you have to make”, he adds, “and the 5G issue has become the faultline for many countries.”

It is a balancing act that the UAE and other Gulf states have been grappling with since China began broadening its economic and political footprint across the Middle East two decades ago — Beijing is now the biggest buyer of crude oil from the Gulf region. It is a trend that has coincided with the perception among Gulf rulers that the US political establishment is bent on disengaging from the region, a sentiment exacerbated by its chaotic withdrawal from Afghanistan in August.

Saudi Arabia’s Crown Prince Mohammed bin Salman poses with the Chinese Ambassador to Saudi Arabia Li Huaxin during a visit to the Great Wall of China in Beijing © Bandar Algaloud/Courtesy of Saudi Royal Court/Reuters

“There’s a trust deficit with America, which is growing by the day,” says Abdulkhaleq Abdulla, an Emirati professor of politics. “The trend is more of China, less of America on all fronts, not just economically, but politically, militarily and strategically in the years to come. There’s nothing America can do about it.”

For decades, Gulf leaders viewed Washington as the guarantor of their security, while the US looked to them as reliable suppliers of global energy. But US oil imports from the region have declined markedly over the past 10 years as a result of the shale gas boom in North America. In contrast, demand for oil in Asia soared, and as the economic ties deepened, the China-Gulf relationship has flourished into one that today is far more than just about crude.

BigRead: Gulf states trade China

With a younger, ambitious generation of Gulf leaders at the helm seeking to modernise their nations, they are increasingly looking to tap into Chinese technology and artificial intelligence for smart cities, as well as armed drones, healthcare and renewable energy.

A veteran US diplomat says the China factor has already become a “real point of acrimony” in relations with the UAE.

“This is one of those issues that make the current relationship with Abu Dhabi and other Gulf states scratchy,” the diplomat says. “There’s an effort to make them choose in a pretty binary fashion and the Emiratis have been equally firm in saying ‘don’t make us choose’.”

Attendees walk past a display for 5G services from Chinese technology firm Huawei at the PT Expo in Beijing
Riyadh decided to use Huawei’s 5G technology in Neom, the flagship development project in Tabuk province that will include a futuristic city © Mark Schiefelbein/AP

The Huawei factor

Gulf officials insist that Washington remains their number one ally, citing the historical security relationship and massive investments into the US, particularly in Treasury bills, as well as cultural ties that have developed as young Arabs studied in American schools and universities and feasted on its movies, soap operas and music. They add that there is no prospect of China replacing the US as the dominant foreign military power in the region, or the main exporter of arms to the Gulf powers.

But as more assertive rulers in Saudi Arabia and the UAE — the Middle East’s two biggest economies and traditional US partners — look to diversify their relations and project their power through broader alliances, the more they look eastward.

Often it is a pragmatic choice, officials say, as China provides technology that is cheaper and more readily available than western options, with Huawei’s 5G technology a prime example. Beijing is also willing to sell equipment to Gulf states that Washington is not — and it comes without political conditions.

“More and more is going to be done with China for obvious reasons,” says Ali Shihabi, a Saudi analyst. “First of all the Chinese are willing to transfer technology and don’t have a Congress to harass you; secondly, China is our biggest market and, thirdly, China has influence with [Saudi Arabia’s rival] Iran. It’s virtually Iran’s only valuable ally, so exceedingly important to Saudi Arabia.”

As an example of the blossoming relationship, he cites Riyadh’s decision to use Huawei 5G in Neom, Crown Prince Mohammed bin Salman’s $500bn flagship development project to include a futuristic city, even though the “American’s were dead set against it”. The tech firm is already building its biggest overseas retail outlet in the kingdom as China cements its position as Saudi Arabia’s biggest trading partner. Over the past two decades, trade between the two has soared from less than $4bn in 2001 to $60bn in 2020, nearly half of which was Chinese imports.

“We don’t really pivot to China, but we have to be onside with China,” a senior Saudi official says. “With 5G, it wasn’t a question of ‘we are taking theirs over yours’, it was we are taking the best available. You do the same and we will buy from you. But we have to protect our own interests, so develop your technologies or we will develop our own.”

An artist’s impression of Neom, which will be built in northwestern Saudi Arabia
An artist’s impression of Neom, which will be built in northwestern Saudi Arabia ©

Fight for regional influence

The kingdom, once a staunch opponent of communism and supporter of Taiwan — which Beijing characterises as a renegade province — was the laggard of the Arab world when it formally established relations with China in 1990. It was a move that in part had its roots in the frustration with Washington felt by the Saudi rulers.

In the mid-1980s the kingdom was desperate to secure missiles from the US as a deterrent to Iran. When Washington refused the request, Saudi King Fahd secretly approached Beijing and arranged to purchase Chinese ballistic missiles. “It was a sort of message from King Fahd, ‘we can do this’ and we are buying these,” the Saudi official says.

More recently it has been the US refusal to sell armed drones to Gulf states that has caused both Riyadh and Abu Dhabi to procure the weapons from China instead. After Saudi King Salman and Crown Prince Mohammed held talks with President Xi Jinping in Beijing in 2017, a deal was reportedly agreed to establish a Chinese drone factory — the Gulf’s first — at the kingdom’s King Abdulaziz City for Science and Technology.

A medical worker prepares a dose of the AstraZeneca Covid-19 vaccine
The UAE turned to China as it scoured the globe for the resources to tackle the coronavirus outbreak © Fayez Nureldine/AFP via Getty Images

Three years later, as coronavirus hit the region, the UAE turned to China as it scoured the globe for the resources to tackle the disease. Group 42, a state-affiliated company chaired by Sheikh Tahnoon bin Zayed al-Nahyan, the federation’s national security adviser, quickly established ventures with Chinese firm BGI, to open a coronavirus laboratory in Abu Dhabi and conduct trials for a vaccine.

In contrast, when Khaldoon al-Mubarak, one of the most trusted lieutenants of Sheikh Mohammed bin Zayed al-Nahyan, the UAE’s de facto leader, contacted Honeywell to supply much-needed personal protective equipment, the conglomerate was unable to deliver because of a US ban on PPE exports. Honeywell ultimately sourced supplies from its subsidiary in China as Beijing allowed the equipment to be shipped to the UAE, before setting up a joint venture with Mubadala, a state investment fund, to manufacture it in the Gulf state.

Mubarak, the chief executive of Mubadala and the UAE’s special representative on China relations, told the FT this year that more than $100bn of the state fund’s $232bn of assets was invested in the US, before adding that it was looking to increase its investments in the Asian power. Mubadala is seeking to increase its investments in technology, healthcare and disruptive industries. “The sectors we like all have a significant growth trajectory in China,” Mubarak said.

Another senior UAE official says that while the relationship with China is strong, “it’s not overpowering”, adding that he does not believe it will jeopardise Abu Dhabi’s relations with the US.

The US has expressed concerns that the sale of F-35 fighter jets to the UAE risks China gaining access to its latest military technology
The US has expressed concerns that the sale of F-35 fighter jets to the UAE risks China gaining access to its latest military technology © David McNewAFP/Getty Images

“The Emirates is a place where we like to do things quickly and sometimes western bureaucracies and corporations are slower to move and perhaps don’t see the strategic relationship as clearly as some of the Chinese do,” he says. He and others add that the UAE is not being treated differently from other US partners.

Yet the notion that it will not have an impact on relations with Washington is consistently being put to the test. The latest example being US concerns that the sale of F-35 fighter jets to the UAE risks China gaining access to some of America’s latest military technology.

“I am concerned about that, but I believe we are working hard both internally within the United States and with our UAE partners to ensure that’s resolved satisfactorily,” General Kenneth F McKenzie, the commander of the US central command, told a webinar this year. “We need to recognise that competition against Russia and China simply doesn’t only occur in the western Pacific or in the Baltics, it occurs in places like the Middle East, where they are expanding and coming in.”

A worker wearing a protective suit sprays disinfectant to stop the spread of the coronavirus in Sharjah, United Arab Emirates
A worker wearing a protective suit sprays disinfectant to stop the spread of the coronavirus in Sharjah, United Arab Emirates © Francois Nel/Getty Images

The appeal of Beijing

Saudi Arabia and the UAE have both taken formal steps to deepen their relations with China in recent years.

In January 2016, Beijing issued its first “Arab policy paper,” which looked at everything from security to commerce and counter-terrorism. The same month Saudi Arabia and China agreed to establish a “comprehensive strategic partnership” to enhance political, cultural, security and military ties during a visit to the kingdom by Xi. Gulf states are seeking to benefit from Beijing’s Belt and Road Initiative, and Prince Mohammed, the kingdom’s day-to-day ruler who co-chairs the “China-Saudi Arabia High-Level Joint Committee”, has linked it to his own “Vision 2030” plan.

The UAE and China agreed to establish their own “comprehensive strategic partnership” with a focus on economic ties, technology transfers, IT and energy when the Chinese president visited Abu Dhabi in 2018. But there were also political and military aspects to their agreements, including a desire to “enhance practical co-operation between the two armies” in “various forces and weapons, joint training and training of personnel and other domains”.

A Pentagon report on China’s military power, released last year, listed the UAE among countries it believed Beijing “likely considered” as locations for “military logistics facilities”. And from a Gulf perspective, China offers something the US and other western powers cannot — an autocratic, state-led development model that resonates with the Gulf’s dynastical rulers.

“There’s a lot to learn from China and its ability to develop the way it has is predicated on the fact it’s not a democracy . . . it can make the decisions and it has to be state led,” says the Saudi official. “They are becoming light years ahead on a lot of things. We are also studying their industrial cities, not just big industry but downstream industries, technology, and looking at how they built them so successfully.”

A military vehicle carrying an unmanned aerial vehicle travels past Tiananmen Square during a military parade in Beijing
The US refusal to sell armed drones to Gulf states caused both Riyadh and Abu Dhabi to procure the weapons from China instead © Reuters

The Gulf states and China also appreciate pledges not to meddle in internal affairs. When much of the western world was chastising Prince Mohammed in the months after the 2018 murder of Jamal Khashoggi by Saudi agents, the crown prince was warmly welcomed in Beijing. And Prince Mohammed, whose father, King Salman, is custodian of Islam’s two holiest mosques, made no public comments about China’s mass internment of the predominantly Muslim Uyghur minority. Instead, he said Beijing had “the right to take anti-terrorism and de-extremisation measures for safeguarding national security”, according to a Chinese foreign ministry account of his meeting with Xi.

In August, the Associated Press quoted a Chinese woman as saying she was held in a secret detention centre in Dubai with at least two Uyghurs. Dubai Police dismissed the woman’s claims as “false”, insisting she was not detained. “Dubai does not detain any foreign nationals without following internationally accepted procedures,” the government said in a statement at the time. “Nor does it allow foreign governments to run any detention centres within its borders.”

Jonathan Fulton, an expert on Chinese-Middle East relations at Zayed University in Abu Dhabi, characterises the Gulf powers’ ties to Beijing as a “pretty good hedge for Gulf leaders”.

“They look at China and they see a rising power that creates a lot of opportunity and they don’t demand a whole lot, whereas western countries tend to tie in human rights issues, or political ideology,” Fulton says. “China’s got this very firm, non-interference principle hard baked into its foreign policy . . . ‘we’re not going to tell you what to do and we’re not going to get involved in politics’.”

He believes the US still has the ability to influence the direction of relations between China and the Gulf, but adds that “there’s no way they can stop it from happening”, adding: “I don’t think there’s any changing it, just look at markets, population projections: the global centre of gravity, economic gravity, is just constantly moving eastward.”

Others take a blunter view — particularly if Washington seeks to pressure Gulf leaders, such as Saudi Arabia’s crown prince, over human rights and other issues. President Joe Biden entered the White House criticising Saudi Arabia over Khashoggi’s murder and promising to reassess relations with the kingdom, while freezing some arms sales.

“I think China is going to slip in and eat more of America’s lunch in Saudi Arabia because every hassle the Americans give the kingdom, it just encourages them,” Shihabi says.

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