Pax Sinica in the Middle East?

New hope for Palestine and Iran? 2023 re-post about Xi in MENA shows China's long-term planning at its best.

I’m preparing a double post on the strategic and the tactical implications of the Iran war. In the meantime, this 2023 post reminds us how much work Xi personally did to prepare for this moment by showing MENA leaders that another world is possible.

In 2022, the China-GCC Summit was one thing, and China’s strategic partnership with Iran another, but both Saudi Arabia and Iran applying simultaneously to multipolar institutions – BRICS and the SCO? Plus the idea of a BRICS Coin as a commodity-weighted neutral reserve asset that encourages members to pledge their commodities to the BRICS cause? The combined force of those four changes may prevent inflation from slowing and interest rates from falling in the West until 2030. Zoltan Pozsar, Credit Suisse.

It is difficult to exaggerate the degree to which China has transformed the Middle East from a region of squabbling, unstable states into a semblance of Mohammed’s ummah, a supra-national community with a common history and a shared destiny. All it took was decades of diplomacy, promises kept, and a trillion dollars.

But you wouldn’t know it. As far as Western media were concerned, it never happened. Nothing ever happened. Even while it was happening it wasn’t happening. It didn’t matter. It was of no interest. But it was, because between China’s ally Russia and the Middle East own most of the world’s oil and gas reserves.

Prelude to a kiss

They may have faded from our memories, but America’s Mideast Color Revolutions sent Saudi Arabia, Turkey and India rushing to Moscow for $4 billion S-400 air defense systems. Furious, Washington tongue-lashed India for ‘human rights,’ ejected Turkey from the F-35 program, and threatened to turn Saudi Arabia into a ‘pariah state’. A year later, facing elections, Biden flew to Jeddah to request a temporary rise in oil production, but Prince Mohammed bin Sultan refused and publicly derided him.

Return of the Sheik

Xi established his bona fides when, during a 2016 Middle East visit, he promised an ambitious infrastructure program and subsequently delivered it. Six years later, he returned to a royal welcome, gleaming ports, new highways, railroads, refineries, airports and factories and, above all, booming economies.

Xi attended the China-Arab States Summit and the China-GCC Summit in Riyadh, met with Egyptian President Abdel Fattah El-Sissi, Kuwaiti Foreign Minister Salem Abdullah Al-Jaber Al-Sabah, Bahraini Foreign Minister Abdullatif bin Rashid Al Zayani, Tunisian President Kais Saied, Palestine’s Mahmoud Abbas, Sudan’s Abdel Fattah al-Burhan, Iraqi PM Mohammed Shia al-Sudani, Morocco’s PM Aziz Akhannouch and Lebanese PM Najib Mikati. Notable amongst the thirty-four agreements they signed:

• The Middle East will integrate its development plans with the BRI.

• The Saudi Defence Ministry will order missiles, helicopters and air defense weapons without further authorization. 

• China will invest $1 Trillion in a regional hub of 21st century industries.

• China will buy half Saudi’s petrochemicals for $24 Billion annually and buy $450 Billion of oil for RMB.

• KSA will pay Huawei $30 Billion for 5G, cloud computing, data centers, and IoT.

• Saudi Aramco and Sinopec will integrate their refining, petrochemicals, engineering, procurement, construction, oilfield services, upstream and downstream technologies, carbon capture and hydrogen processes and build local capacity in renewable energy. 

• The region will join China in protecting non-Arab Iran and winning Palestine’s independence.

At Arab League headquarters in Cairo, Xi signed a five-year plan to deepen Egypt’s integration with the BRI, complete the CBD in the new capital and the China-Egypt Suez Trade Zone, import more quality products from Egypt, and expand cooperative investment and financing for vaccine production and aerospace.

In Tehran, he signed a Comprehensive Strategic Partnership integrating Iran’s development into the BRI. In exchange for a 12% oil discount, China will invest $120 billion in infrastructure and $280 billion in downstream refining, petrochemicals and plastics, and ‘fully utilizing the Shanghai Petroleum and Natural Gas Exchange platform for RMB settlement.  

Twilight of the Gods

Turkey is withdrawing from Syria, leaving US expeditionary forces isolated in the Syrian desert and, after forty years, the US Navy has withdrawn its carrier from the Gulf. 

Concludes Poszar, “At the 2018 BRICS Summit, China launched renminbi-denominated oil futures contracts on the Shanghai International Energy Exchange and made the renminbi convertible to gold on the Shanghai and Hong Kong Gold Exchange. Money is as money does, and convertibility to gold beats convertibility to dollars. The central bank digital currency project already carries out real-time, peer-to-peer, cross-border foreign exchange transactions between China, Thailand, Hong Kong and UAE, without involving the US dollar or the network of Western correspondent banks that the dollar system runs on: the dawn of the petroyuan. ”