China’s leader Xi Jinping meant business when he traveled this week to Saudi Arabia’s capital, Riyadh. Promising to “usher in a new era” of China-Saudi relations, Xi oversaw the signing of 35 commercial agreements between the two countries, including contracts with the Chinese telecoms giant Huawei, according to Chinese state media.

The celebratory atmosphere stands in contrast to the souring mood around the U.S.-Saudi relationship, which took another downward turn in November when the Gulf Kingdom agreed to OPEC oil production cuts — despite the Biden administration’s pleas to get more fuel flowing. 

That, in turn, speaks to an emerging view among experts that while China may have failed to qualify for the World Cup underway in Qatar, it is competing strongly in the off-pitch battle for influence in the region. The sheer scale of China’s financial ties with the Middle East have even raised the question of whether it could replace the U.S. as the region’s key power broker. 

“In many ways, when the Gulf countries think about their future, they see China as a very good partner,” says Gedaliah Afterman, an Asia expert at Reichman University’s Abba Eban Institute for Diplomacy and Foreign Relations in Israel. 

“China offers the region something that no other power can offer: the combination of being a major energy client, as well as a provider of infrastructure and technology,” he adds. “That’s a pretty good deal. If you’re not worried about human rights or transparency, it’s even better.”

Energy is key to Beijing’s ever closer links to Gulf nations: China is Saudi Arabia’s top oil customer, taking 27 percent of its exports in 2021, and has become the biggest trading partner for every Gulf Cooperation Council (GCC) country except for Bahrain, according to Asia House, the London-based think tank. As the World Cup kicked off last month, Chinese oil giant Sinopec signed a 27-year liquefied natural gas (LNG) supply deal with state-owned QatarEnergy.

China offers the region something that no other power can offer: the combination of being a major energy client, as well as a provider of infrastructure and technology. That’s a pretty good deal. If you’re not worried about human rights or transparency, it’s even better.

Gedaliah Afterman, an Asia expert at Reichman University’s Abba Eban Institute for Diplomacy and Foreign Relations.

Chinese technology and infrastructure firms are carving out a larger role in Gulf countries’ development too. State-owned China Railway Construction Corporation built Qatar’s largest sporting venue, the Lusail Stadium, which will host the World Cup Final. Four of the World Cup’s 14 top sponsors are Chinese companies, including electronics firm Hisense and conglomerate Wanda Group. Meanwhile, Chinese investment in Saudi Arabia reached record levels in 2022, according to the American Enterprise Institute’s China Global Investment Tracker, which monitors deals over $100 million. 

Historically, the Middle East was low on China’s priority list. Far from China’s immediate neighborhood, and deeply embedded in the U.S. sphere of influence, countries in the Gulf served a useful purpose as an energy supplier, but little more. 

That began to change around 2010, a period when China’s overall foreign policy started to become more assertive and far-reaching. 

“China always viewed the Middle East as its periphery. It always needed energy, but it didn’t treat it as strategic,” Afterman says. “That’s been changing since the Arab Spring [in 2010], when China found itself in a position where it didn’t know who to talk to after the fall of [Egyptian dictator] Hosni Mubarak. The Chinese understood they needed to be more proactive in understanding the region, diversifying their relationships and making them deeper.”

When Beijing launched Xi’s signature foreign investment policy, the Belt and Road Initiative, in 2013, it placed the Middle East at the heart of plans to integrate Asia and Europe through Chinese infrastructure and construction. The region has been a major beneficiary of the BRI’s technology component, the Digital Silk Road: Huawei, for example, has played a key role in building 5G infrastructure in most Gulf countries.

China’s investment plans have presented a timely opportunity for hydrocarbon-dependent Gulf countries looking to diversify. Between 2012 and 2018, Beijing signed partnership deals with Oman, Kuwait, Qatar, the UAE and Saudi Arabia — agreements driven by energy cooperation, but expanded to support large infrastructure projects and technological tie-ups.

“A lot of the Gulf countries have intense development needs, and are flush with cash, which means they are a tremendous source of contract revenue for Chinese companies, even though in terms of market size, [the Gulf] is not that big,” says Jonathan Fulton, a nonresident senior fellow at the Atlantic Council. 

As Gulf states have deepened their relationship with China, some have undergone a crisis of confidence in their traditional security relationship with the U.S.

A series of events have reinforced the regional view that the U.S. could be abandoning the Middle East, beginning with the Obama Administration’s encouragement for the Arab Spring uprisings, its “pivot to Asia” and withdrawal from combat in Iraq and Afghanistan, and continuing with President Donald Trump’s failure to intervene when Iran bombed Saudi oil facilities in 2019. U.S. President Joe Biden vowed to treat as Saudi Arabia as a “pariah” when running for office over its human rights abuses and the murder of journalist Jamal Khashoggi in 2018. 

“Despite all evidence to the contrary, everyone here [in the Gulf] seems to think the U.S. is leaving,” says Fulton, who is based in the UAE. “And they look at China and think, ‘how can we make provisions for an uncertain U.S. commitment’.” 

For sure, the idea that China could replace the U.S. as the region’s principal security guarantor remains remote. According to The Wall Street Journal, Saudi Arabia is manufacturing ballistic missiles with Chinese help, and the UAE last year snubbed U.S. F-35 fighter jets before announcing a planned purchase of 12 Chinese L-15 planes. They are not direct substitutes for U.S. planes but nevertheless sent a message to Washington.  

The Gulf countries look at the global picture, and see the U.S. as more and more reluctant to act in the Gulf. They see the rise of China, and think ‘we need to prepare for the day the U.S. leaves’.

Jean-Loup Samaan, a China-Middle East expert at the National University of Singapore.

But Chinese weapons sales to the Gulf are nowhere near the scale of U.S. equipment deals. Nor has the Chinese government ever signaled a willingness to get involved in conflicts in the Middle East to the extent that the U.S. has so often done. Indeed, a more active military role would be challenging for Beijing, which aims to maintain close commercial ties with rival states in Iran, Israel and the Gulf.

Analysts say deepening commercial ties with China remains Gulf countries’ main priority: An added benefit could be to stoke an American strategic response.

“The Gulf countries look at the global picture, and see the U.S. as more and more reluctant to act in the Gulf. They see the rise of China, and think ‘we need to prepare for the day the U.S. leaves’. At the end of the day, that’s their biggest obsession,” says Jean-Loup Samaan, a China-Middle East expert at the National University of Singapore. “They’re realistic – if bringing the Chinese into the equation leads the Americans to stay, for them that’s the perfect result. They can use that as leverage.”

It’s a trend that hasn’t gone unnoticed by the United States, with Colin H. Kahl, the U.S. under secretary of defense for policy, warning at a recent conference in Bahrain that China “pursues ties based solely on its narrow, transactional, commercial, and geopolitical interests, period.” 

Karen E. Young, a senior research scholar at Columbia University’s Center on Global Energy Policy, says that for countries like Saudi Arabia, a visit from Xi Jinping is still mainly about commercial ties, rather than sending a message to Washington.

“I don’t think it’s that pointed,” she says. “But does it still have an effect in the U.S.? Sure it does. It makes the Biden Administration, the U.S. Congress, the intelligence community, nervous.”

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