Xi Asserts China's Middle East Role as Iran Sanctions Lifted

(Bloomberg) -- President Xi Jinping will wade into the feud between Iran and Saudi Arabia on Tuesday with a Middle East tour that shows a new willingness by China to flex its diplomatic clout in one of the world’s most volatile regions.

Xi’s five-day swing through Riyadh, Cairo and Tehran represents the president’s first foray into the Middle East since taking power three years ago and marks 60 years of relations between Beijing and the Arab League. He’s also seeking to protect Chinese influence that accumulated in Iran during the country’s long isolation, with Xi becoming the first major world leader to visit since the U.S. and European Union lifted sanctions Saturday and cleared the way for its reemergence in the global economy.

The trip may show China playing a more hands-on peacemaking role as the Syrian conflict exports violence around the world, regional powers quarrel along sectarian lines and U.S. influence wanes. China doesn’t want more strife between Saudi Arabia -- its largest source of foreign oil -- and Iran, a potential strategic ally sitting at the crossroads of Xi’s Silk Road plan to build railways, pipelines and other infrastructure from Asia to Europe. He’ll be the first top Chinese leader to visit Iran since 2002.

“China has found itself increasingly enmeshed in the region’s conflicts and diplomatic disputes,” said Michael Singh, managing director at the Washington Institute for Near East Policy and a former regional adviser to the National Security Council. “Iran represents a strategic opportunity for China. As Beijing seeks to project power globally to secure its interests, Iran will be its most important partner in the Middle East."

Oil Suppliers

Chinese business interests in the region have been expanding for decades and the country is the top trading partner with all three nations on Xi’s tour. Saudi Arabia supplied China with 16 percent of its imported oil in 2014, according to the U.S. Energy Information Administration. More than 160 Chinese companies are operating in the country, the official Xinhua News Agency reported.

In Iran, Chinese interests prospered while sanctions over the country’s nuclear program blocked U.S. and European competitors from the market. China buys 40 percent of Iran’s oil exports and has become the country’s top source of capital and technology. Almost 100 Chinese companies have a presence there. With the sanctions lifted, China is counting on initiatives like the $40 billion Silk Road fund to counter an influx of competition. 

“China will face rivals in a market that heretofore was under sanctions and uncontested,” said Ali Vaez, an Istanbul- based senior Iran analyst with the International Crisis Group. "The timing of Xi’s visit in the wake of lifting the sanctions seems designed to ensure that China’s predominant position in the Iranian market is preserved."


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Copyright 2016 Bloomberg News.

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