Beijing ‘exploits’ Iran, says US advisory panel

Reuters

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American officials have identified the Middle East, and particularly the GCC, as crucial turf in superpower competition between the US and China, singling out energy and advanced technology as the main fields where a tug-of-war is taking place.

The US-China Economic and Security Review Commission, a 25-year-old Congressionally-mandated independent US government agency, dedicated an entire chapter to the Middle East in its latest annual report which came out on Tuesday, the sole region in the world outside of Asia to receive such treatment.

Beijing is working to “peel the region away from the United States,” the 800-page document claims, citing Jon Alterman, director of the Middle East Program at the Center for Strategic and International Studies – one of several experts who testified before the Commission throughout the year.

China’s involvement in the region “runs across the whole spectrum of economic, security and military issues and we think it bears closer scrutiny and consideration from Congress,” said Republican-appointed commissioner Randall Schriver during an event launching the report in Washington.

The paper calls China’s approach to the Middle East “selective and transactional”, focused on advancing its economic and soft-power interests but “free-riding” on the US’s regional security architecture. 

Beijing’s role is destabilising, it claims, exploiting “Iran’s international isolation” to purchase 90 percent of its oil exports “at a steep discount” and supporting the Iranian drone and ballistic missile programmes. 

China “effectively pays for almost half of Iran’s entire government budget,” Reva Price, the commission’s vice chair and a democratic appointee, said during the presentation.

The UAE, Saudi Arabia and Egypt are China’s other main targets in the region, according to the commission.

Beijing and Riyadh appear keen to further their engagement amid fears that the US may be “abandoning” the Middle East to pivot to Asia. There is also a sense that China’s development over the past five decades may “hold lessons for Saudi Arabia’s own ambitious economic diversification efforts,” the report says, citing the Alterman testimony.

China has been the largest trading partner for the Middle East since 2010, when it replaced the US.

Huawei, ZTE and other Chinese telecom firms have “aggressively” expanded in the Middle East and, as of the beginning of 2023, Huawei had contracts with 11 countries in the region to build out 5G infrastructure including Egypt, Turkey, Iran, Lebanon, Jordan and all six GCC countries, the commission found.

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China’s imports of crude from the Middle East increased from 34 million metric tons in the early 2000s to 257 million metric tons in 2021, the report says, just as American and European imports slid. 

“Chinese construction companies have partnered with Gulf countries to build nuclear reactors,” it said.

“In May 2023 the Emirates Nuclear Energy Corporation reached agreements with three Chinese nuclear energy companies to support its nuclear energy program, and Saudi Arabia is reportedly considering similar partnerships with China to build reactors capable of supplying 17 gigawatt-electric of nuclear capacity by 2040.”