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The decision by the BRICS countries to admit Egypt, Iran, Saudi Arabia and the United Arab Emirates to the grouping is the latest attempt by China, in particular, to raise its political and economic standing in the Middle East.

Late on 23 August 2023, the BRICS grouping of Brazil, Russia, India, China and South Africa agreed at a summit in Johannesburg to admit six new countries in 2024, amongst which were four Middle Eastern states: Egypt, Iran, Saudi Arabia and the United Arab Emirates (UAE). The admission of these countries follows recent high-profile efforts by Beijing to carve out more significant political influence in the Middle East and North Africa (MENA), notably by facilitating an Iranian–Saudi diplomatic agreement in March and the entry of several Middle Eastern states into the Shanghai Cooperation Organisation in 2022.

China’s outreach to the Middle East fits into a broader Chinese coalition-building strategy among countries of the global south, in part through its Global Development and Global Security initiatives, through which it has articulated its vision for a new international economic and security order. Until recently, China wielded limited political influence in the Middle East, where the United States has traditionally loomed large. But the entry of key Middle Eastern powers into BRICS is a significant development for China as it seeks to translate its economic clout into tangible regional political support for its global ambitions. 

More Chinese engagement

China has gradually upgraded its political ties with key Middle Eastern powers over the past decade. Between 2014 and 2018, it signed comprehensive strategic partnership agreements with Algeria, Egypt, Iran, Saudi Arabia and the UAE. In addition, China has engaged Middle Eastern powers multilaterally through the China–Gulf Cooperation Council (GCC) Strategic Dialogue and the China–Arab States Cooperation Forum. In 2016, it released an ‘Arab Policy Paper’ outlining its vision for cooperation with the Arab world. The paper described a ‘1+2+3’ cooperation framework focused primarily on energy cooperation, supported by improved infrastructure and trade, and identifies emerging fields for cooperation including space, nuclear energy and renewable energy.

Energy has indeed been central to China’s concerns in the Middle East. The region is critical to China’s energy security, accounting for over half of its oil imports, according to 2021 figures from the Observatory of Economic Complexity. The same year, Iraq was the world’s top recipient of Belt and Road Initiative (BRI) projects, with about US$10.5 billion in Chinese loans and investments deployed into oil and gas projects. Nonetheless, China has expanded the scope of its BRI-related projects in the region under the Digital Silk Road to include fintech, e-commerce and smart-city solutions.

More recently, China has used new tools to draw the Middle East closer into its orbit. The BRICS expansion follows that of the Shanghai Cooperation Organisation, a Eurasian grouping promoting regional cooperation in defence and energy that China and Russia founded in 2001. In 2022, it welcomed Iran as a new member and Egypt and the GCC states (except Oman) as dialogue partners.

Interestingly, China’s 2023 mediation effort involving Iran and Saudi Arabia became public shortly after Beijing released its Global Security Initiative white paper, which presented a framework for peaceful conflict resolution. This suggests that China may be approaching the Middle East as a testing ground for the more prominent global role it intends to play. 

Regional motivations

Middle Eastern powers have multiple motivations for drawing closer to China. While China’s economic heft is a common point of attraction, Egypt, Iran, Saudi Arabia and the UAE all have their own geopolitical rationales for forging closer links with Beijing.

Iran, given its anti-West worldview, is a natural candidate for China’s coalition-building strategy in the global south. Its oil exports are under US sanctions and it relies on Chinese purchases of Iranian oil as its principal source of foreign earnings. Since 2005, Iran has pursued a ‘Look East’ policy to emphasise cooperation with China and Russia. Iranian President Ebrahim Raisi also declared expanding relations with China, Iran’s top trading partner, a foreign-policy priority for his administration shortly after assuming office in 2021. Under a 25-year agreement signed in 2021, Iran is reportedly eyeing $400bn in Chinese investments. Nevertheless, the scale of China’s commitment seems unrealistic, and the agreement faced opposition within Iran over fears that Chinese investments could erode the country’s sovereignty.

For cash-strapped Egypt, accessing Chinese loans and investments is a key incentive for closer ties with Beijing. Egypt is one of the few beneficiaries in the MENA region of Chinese rescue loans, which have helped Cairo manage liquidity shortages since 2016 and enabled it to clinch an IMF loan for US$3bn in 2022. Egypt is also exploring Chinese investments worth US$5bn in the Suez Canal Economic Zone, targeting iron and steel plants, energy, textiles, petrochemicals and bromine production. Egypt, which receives US$1.3bn in military assistance from the US but suffers from chronic shortages in its dollar reserves, is banking on BRICS to develop alternative currency arrangements to mitigate its dependence on the US dollar.

From Saudi Arabia’s and the UAE’s perspectives, securing long-term oil exports to China – respectively, their largest and second-largest oil market in 2021 – is a strategic imperative. OPEC expects China to remain a long-term growth market for oil despite the global transition to renewable energy sources. To lock in Chinese demand for their oil and undercut their competitors, Saudi Arabia and the UAE are investing billions of dollars in Chinese oil refineries and petrochemical industries and negotiating long-term contracts to supply Chinese companies with oil. Beyond energy, Saudi Arabia and the UAE view China as an attractive partner in achieving their ambitions for economic diversification. Saudi Arabia has been at pains to highlight the compatibility of Saudi Vision 2030 with China’s BRI and has forged partnerships and joint ventures with Chinese institutions and state-owned enterprises to access Chinese technology and expertise. 

Implications for the US

China’s deepening relations with Egypt, Saudi Arabia, and the UAE – all US defence partners – are increasingly affecting the military domain. Although Chinese arms sales to the region remain small, China’s political push coincides with a desire among Middle Eastern states to rely less on the US. Middle Eastern powers view China as an attractive partner because of its willingness to sell systems and share technology, such as armed uninhabited aerial vehicles and ballistic missiles, which they have not yet been able to source from Western partners. Saudi Arabia, Egypt and the UAE are also reportedly exploring deals to buy Chinese aircraft, including the FC-31 fifth-generation fighter jets, the J-10 multirole fighter jets and L15 trainers, respectively, raising the possibility that China could position itself as a more significant arms supplier to the region.

Although China’s deeper engagement with the Middle East remains low-cost and involves no commitment to maintaining regional security or freedom of navigation comparable to what the US provides, it does not seem to suffer from the United States’ reputational troubles. The US has recently focused on deterring China in the Indo-Pacific while seeking to de-prioritise the Middle East. But China’s recent coalition-building efforts will increase the pressure on the US to find ways of reinvigorating its partnerships and demonstrating its staying power in the region.