When Russia re-entered the Middle East arena for the first time since the Cold War by deploying its military in Syria back in September 2015, there was much anxiety in Israel and the West about a surgent Moscow. It was overwrought in the extreme: Five years later, Russia is bogged down in seemingly endless conflict, its Syrian client is a smoldering rubble of an economy and its influence on the rest of the region remains marginal.
Now, in July 2020 we are facing another pivotal moment, and this time there is a much better reason to be anxious. The New York Times reported over the weekend that Iran and China have quietly reached a giant agreement on investment and security. The pact calls for military training and exercises, joint weapons development and intelligence sharing as well as an oil-for-investment swap worth $400 billion over 25 years.
As the Times notes, the pact will strike a major blow to the U.S. drive to isolate Iran economically. But it goes far beyond that: Beijing is no longer a wheeler and dealer that buys oil, exports merchandise and builds infrastructure without dirtying its hands in the region’s messy politics and security.
China is now emerging as a competitor to the United States in the Middle East. It is not a rusting Sparta like Russia. China is the world’s second-largest economy. It can supply countries with technology, finance deals and provide the labor and engineering skills to build ports and highways, and it can leverage its insatiable demand for Middle East oil gain preference over rivals.
As Israel has discovered, the U.S. has woken up to the strategic threat and is getting tougher on its allies about trade and technology ties with Beijing. The same message U.S. Secretary of State Mike Pompeo gave Israel in May is being relayed to the Gulf states.
Unfortunately, America may have woken up too late. Trade and investment ties with the Gulf countries have grown enormously in recent years and it’s no longer just about Gulf oil in exchange for Chinese imports. That is a trade relationship the U.S. can tolerate. Increasingly it’s about technology and investment, which puts the Gulf states much closer into the Chinese orbit.
The next-generation 5G mobile technology is a case in point. Deploying 5G networks is critical for any country that aims to call itself advanced but whoever supplies the gear can also use it to spy on users or even wage cyberattacks against them. China is the world 5G leader, leaving the U.S. in the embarrassing position of telling its allies “Don’t buy China” without offering a competing alternative.
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Fear of China
The coronavirus has contributed further to U.S. weakness, as was highlighted in a flap over testing of American embassy staff in Abu Dhabi last month. Abu Dhabi offered to provide free testing, but the U.S. turned it down because the testing company was a joint venture between China’s BGI (which, by the way, is also operating Israel) and a local partner. U.S. officials feared Beijing would get access to employee DNA data.
The backstory to the flap, of course, is that China has been doing a far better job than the U.S. in containing the pandemic. China not only makes most of the medical hardware needed to control the pandemic, it has worked hard to polish its image as the country that knows how to manage the crisis, in sharp contrast to American bungling.
Meanwhile, as Karen Young points out in a recent essay in Al-Monitor, Trump is squandering the assets America does have in competing with China. It is still the go-to military power, but Trump has sought to roll back the U.S. presence in the Middle East. The U.S. can offer private sector capital and global institutions that ensure good governance and the rule of law, but Trump’s trigger-happy sanctions policies and his disparaging of global institutions have dulled that edge.
The Iran agreement, if it really happens, elevates China to a new level that encompasses not just trade and investment but defense. Ironically, the deal may set back Chinese ambitions by aligning itself too closely to Tehran at a time when the Gulf powers regard Iran as a dangerous enemy, but Beijing may not care.
Iran is in such a bad state economically that it has no choice but to award China big discounts on oil prices and give away the rights to develop and control critical infrastructure. Beijing may be betting that the Gulf countries will turn the other cheek because they desperately need China to buy their oil.
For Israel, U.S.-Chinese competition is far more dangerous than Russia’s play-acting as a superpower in place like Syria and Libya. I’ve contended that faced with the choice of the U.S. or China, Israel will have to go American. But the calculations become more difficult if China is now the rising superpower in the Middle East. We’re still far from that day, but it is approaching.