Why it 'doesn't hurt' Middle East nations to avoid taking sides in China-US rivalry narrative of the West

Chinese President Xi Jinping's landmark visit last week to Saudi Arabia laid the groundwork for numerous economic joint ventures with potentially far-reaching consequences for the struggling economies of Africa, the Arab world and South Asia.

Among the many agreements announced in Riyadh on December 9, the two sides intend to join forces to provide economic help, development funding, and debt relief to poor countries that are already close to either China or Saudi Arabia, or both - such as Egypt and Pakistan.

Xi and Crown Prince Mohammed bin Salman said they would also establish joint petrochemical and renewable power generation projects in investment-starved Africa and power-hungry Europe. Such plans could thereby improve the odds of China and Saudi Arabia securing major shares of the global energy market amid a transition away from dependency on hydrocarbon fuels.

Do you have questions about the biggest topics and trends from around the world? Get the answers with SCMP Knowledge, our new platform of curated content with explainers, FAQs, analyses and infographics brought to you by our award-winning team.

By signing the pact, Xi and the crown prince have taken the first steps towards combining the enormous sovereign wealth of the two countries to achieve common goals. The deals will establish Saudi Arabia as the base for China's Belt and Road Initiative projects at the crossroads of Africa and Asia, and align it with the kingdom's equally ambitious Vision 2030 economic growth and diversification programme.

If the joint economic plans agreed in Riyadh are gradually realised, analysts said they would provide a rich alternative to developing countries who are desperate to avoid having to choose sides in the great power competition between the United States and China.

"If the Gulf and others become major players in these countries, that's going to mean that the state of these countries and regions will become more multipolar," said Guy Burton, a Brussels-based adjunct professor of international relations and author of China and Middle East Conflicts.

Then "we may well see more transactional relationships developing" in which both China and the Gulf Arab states "look to increase their influence with these regional/partner/debtor countries", he said.

Growing multipolarity will mean these developing countries will "potentially be able to play their external partners off against each other, to minimise rise and maximise opportunity [of investment, security, et cetera]", he said.

According to a study published last month by the London-based International Institute for Strategic Studies (IISS), the six Gulf Arab states disbursed an estimated US$231 billion in bailout funds to more than a dozen countries in the Middle East and North Africa region and beyond between 1974 and 2022 - far more than the US$81 billion lent in the region by the International Monetary Fund during the same period.

"By providing bailout help at such a scale, the Gulf states have established themselves as central players in the MENA region's development aid landscape," IISS said in a research report published on November 17.

Foreign direct investment flows to Africa from the Gulf states totalled nearly US$102 billion between 2012 and 2022, making them the 4th largest source after China, the US and EU. Egypt received US$69.8 billion of that total.

The UAE was the largest bilateral investor with US$59.4 billion, followed by Saudi Arabia with US$25.6 billion.

Likewise, China is a major project financier and creditor of Algeria, Egypt, Iraq and Pakistan.

It is also the largest trading partner, foreign direct investor, and lender in sub-Saharan Africa.

Beijing restructured about US$19 billion worth of loans to Africa between 2000 and 2019, according to research published by the China Africa Research Initiative at Johns Hopkins University's School of Advanced International Studies in Washington.

Beijing in August announced it was forgiving 23 zero-interest loans to 17 African countries.

Chinese foreign direct investment to Africa has surpassed the US since 2013, and at US$4.2 billion in 2020 was double that coming in from America.

Looking to catch up, the US announced on Tuesday that it would invest US$55 billion in sub-Saharan Africa over the next three years, including US$15 billion in private trade and investment ventures.

Ironically, maintaining the geopolitical status quo in the Middle East, wherein the US has ensured the security and stability of Saudi Arabia and the five other oil- and gas-rich Gulf Arab monarchies for more than 40 years, will be key to the success of the deals struck in Riyadh, analysts said.

Xi's visit did not represent a shift of geopolitical allegiance by Saudi Arabia from the US camp to China's, as has been widely suggested by the international - mostly Western - media, they said.

Ali Shihabi, a prominent Saudi analyst said what the kingdom is trying to do is complement its US security partnership "with a variety of other alliances for arms supplies [that the US does not want to supply] and also for political weight that a power like China and others can exert on Iran."

Instead, Xi's visit has enabled Salman, Saudi Arabia's de factor ruler, to once again assert Riyadh's right to make "sovereign decisions", irrespective of the political agenda of its security guarantor the US, analysts said.

In the same way that securing belt and road financing for Saudi Arabia's Vision 2030 strategic diversification initiative to wean itself off oil, joint debt relief and investments are equally important for Gulf Arab states to "execute a proactive foreign policy," said Clemens Chay, a research fellow at the National University of Singapore's Middle East Institute.

For Saudi Arabia, in particular, as well as the neighbouring United Arab Emirates and Qatar, there is a need to show their relevance internationally, and to lead in region-wide projects, he said.

By refusing to take the West's diplomatic side in the Ukraine war, or to increase oil production to offset Western sanctions on Russia's oil exports, Saudi Arabia and the UAE have shown a desire "to assume the role of a mid-level power in a multipolar world order", Chay said.

Regarding the recent China-Saudi Arabia, Brussels-based professor Burton said that it was "as much about optics as anything else".

While China has "no intention of replacing the US" in the Gulf and the Saudis "aren't about to blow up" their alliance with Washington, "it doesn't hurt" them if Beijing comes across as more powerful or Riyadh seems more independent than they actually are, Burton said.

"It helps them not just in the eyes of the US, but with other partners inside and outside the region as well if they give off this impression," he said.

But there won't be a sudden surge in the immediate aftermath of the signing of the comprehensive strategic partnership agreement between China and Saudi Arabia during Xi's visit, analysts said.

Though it does continue "the momentum of an upwards trend in Sino-Saudi economic relations in the last decade", Chay said, adding it is a "catalyst for further investments to take off".

This article originally appeared on the South China Morning Post (SCMP).

Copyright (c) 2022. South China Morning Post Publishers Ltd. All rights reserved.