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China Is the Middle East's Rising Power. Israel Must Tread Carefully

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Chinese President Xi Jinping and Prime Minister Benjamin Netanyahu shake hands ahead of their talks at Diaoyutai State Guesthouse in Beijing, China March 21, 2017.
Chinese President Xi Jinping and Prime Minister Benjamin Netanyahu shake hands ahead of their talks at Diaoyutai State Guesthouse in Beijing, China March 21, 2017.Credit: Reuters

As Israel enters a new era in its relations with the Middle East following the Abraham Accords, and with a new president entering the White House, there is another critical element that Israeli policymakers should not overlook: China. 

China’s rapid ascent to superpower stature, its efforts to promote a multipolar world order, and the intensifying superpower competition all illustrate the Middle Kingdom’s remarkable success in returning to the center of the world stage. Over the last decade, China has substantially expanded its engagement in the Middle East in ways that are already altering it. 

Israel must improve its understanding of China’s aspirations and policies and weigh the challenges and opportunities its growing presence present. Long-term policies will help Israel better prepare for the future - one that seems to point increasingly to the East. 

Beijing’s Middle East policy was relatively narrow in scope until 2010. That has changed considerably over the last decade, especially in the aftermath of the Arab Spring.

The Arab Spring caught China, like the rest of the world, by surprise. However, Beijing accurately predicted that the autocracies would prevail and decided to take a more hands-on approach to its relationships in the region – a decision that seems to have paid off.

Chinese Paramilitary guards flank Abu Dhabi's Crown Prince Mohammed bin Zayed after his meeting with Chinese President Xi Jinping in Beijing. December 14, 2015.Credit: AP

China has positioned itself as the largest investor in the Middle East, the largest trading partner of the Arab League, and a reliable partner, especially for countries rich in resources. 

China had a subdued response to Israel's normalization accords with Gulf states, and is still coming to terms with their implications for its regional interests. It suspects that the agreements were designed to serve the Trump administration’s (domestic) political interests rather than those of the Arab states, and would ultimately do more harm than good in the long run. 

Moreover, Beijing also seems to be concerned about a U.S. resurgence in the region. After all, the agreements are a colossal and unexpected disruption in a region where China started to feel quite comfortable. Lastly, an emerging coalition against Iran does not serve China’s interests.

The result of the U.S. election could, however, alleviate much of China’s concerns. A Biden administration returning to the Iranian nuclear agreement, and a revival of the two-state solution, would make the Chinese feel much more comfortable in the new regional reality.  

China’s strategy of "Going out" ("Zou Chuqu") encourages increased public and private investments in foreign markets. While not trouble-free, China’s Belt and Road Initiative (BRI) aims to position it at the center of global trade and its Digital Silk Road at the forefront of innovation and technology. 

Chinese tech-companies, often more comfortable with private-sector-led growth than their western peers, are involved in several major regional projects, such as Smart Dubai 2012 and Saudi Arabia’s National Transformation Program 2030. China’s investment has also increased in the Israeli tech sector, especially in software, IT services, and electronics.

According to the Tel Aviv-based IVC Research Center, Chinese investors have equity in each of the 17 hi-tech companies that raised over $20 million in the first three quarters of 2018. In contrast to the West, China’s effective management of the COVID-19 pandemic, its medical aid, and its vaccines were met with enthusiasm in the Middle East.  

U.S. President Donald Trump, left, and Chinese President Xi Jinping Credit: Alex Brandon,AP

Beijing’s involvement in Israel has increasingly become a flashpoint in U.S.-Israel relations, especially after Chinese investments in Israel reached a high of $325 million in 2018. The U.S. remains the most formidable force in the Middle East, especially militarily, but China’s share in energy, infrastructure, and technology projects is proliferating. Coincidingly, its influence and ability to exert soft power in the region are growing too. 

The Trump administration has taken a harsh stand against Beijing. It implemented protectionist policies and pushed towards economic and technological decoupling, rather than cooperation.

Biden’s strategy will most likely pivot to rebuilding U.S. alliances and establishing broad coalitions to confront China: but no matter the new administration’s course, technology competition will probably be at its core. China, feeling increasingly alienated by western countries, is likely to focus on more welcoming regions such as the Middle East.  

While the U.S. is jousting to retain its place as the world leader and European countries are preoccupied with domestic challenges, China is fortifying its position in the Middle East.

Israel must closely monitor these developments and understand the risks and opportunities they present. It profits significantly from China’s investments in infrastructure projects and technology cooperation, and China’s involvement will become only more material, particularly to the technology sector.  

The flags of China flag and the U.S. fly near the U.S. Capitol in Washington during Chinese President Hu Jintao's state visit. January 18, 2011.Credit: Hyungwon Kang / REUTERS

Despite China’s lukewarm reaction to the Abraham Accords, one consequence is that Israel and China are likely to see greater regional cooperation in the Gulf, particularly in the technological sphere. This will surely catch Washington’s eye. Indeed, the U.S., Israel’s most important ally, will continue to be at the frontline of its cost and benefit analysis. 

There is much speculation about what shape Chinese involvement in the region might take and how the U.S. and China might collide. Israel simply can no longer think about the Middle East without thinking about China. It has no substitute for the United States – certainly not on the defense and diplomacy fronts, but China’s growing importance on other fronts is already a reality. 

As tensions between the superpowers intensify, Israel and other middle powers stuck between the United States and China should tread carefully. Israel should base its decisions and policies on a much deeper understanding of China’s global and regional aspirations, policies, and the situation on the ground. 

A clear strategy and comprehensive policies vis-à-vis China, signaling reassurance to the U.S. that its concerns are addressed while reflecting a longer-term approach towards the Middle Kingdom, will lower risks of strategic mistakes with both Washington and Beijing - mistakes that Israel, dependent on both, cannot afford.  

Dr. Gedaliah Afterman is head of the Asia Policy Program at the Abba Eban Institute for International Diplomacy at the Interdisciplinary Center Herzliya (Israel). He previously served as an Australian diplomat at its embassy in Beijing, where he focused on issues related to China’s foreign policy, including the Middle East.

Theresa Hoffmann is a Research Fellow at the Abba Eban Institute for International Diplomacy's Asia Policy Program at the Interdisciplinary Center, Herzliya

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