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China and the Middle East – Update up to 30/06/2024

The files we follow: China in the Indo-Pacific; Chinese Defence and Taiwan Strait; China-Russia Relations; China and the Middle East; Chinese economic strategies and tendencies; Dynamics and challenges of Chinese international tourism…     

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Dear EurasiaPeace readers,

Welcome to our watch on “China’s engagement in the Middle East“! This watch will both be focusing on China’s position on the Israeli-Palestinian conflict, of which you can find a more complete analysis in our first watch on China and the Middle East, but also explore less discussed signs of China’s growing influence in the region. Enjoy your reading!

 

– Strengthening of Sino-Saudi defense cooperation against the backdrop of Houthi activism

Saudi Defense Minister Khalid bin Salman landed in Beijing on June 25. There, he met his Chinese counterpart, Dong Jun, as well as one of the vice-chairmen of the Central Military Commission, Zhang Youxia. 

While security ties between the two states have strengthened significantly in recent years (Chinese arms purchases, first joint exercises, etc.), this visit was tinged with conjunctural considerations: Riyadh wishes to push China to use its influence on the Houthis to bring relief to Red Sea tensions. China has no direct leverage over the armed group, but the Houthis depend on Iran for support. It is by putting pressure on Iran that Beijing could indirectly bring about a lull in the strait.

In this light, Admiral Dong Jun’s words reported in the official communiqué on the meeting take on a different meaning: in it, he affirms that China “stands firmly by Saudi Arabia on issues concerning their respective core interests“, and that the two sides “communicate and coordinate in a timely manner on international and regional affairs” to defend their “common interests“.

– Hezbollah threatens a port operated by the Shanghai International Port Group 

Hezbollah, which operates notably in southern Lebanon, can also represent a danger or a hindrance to Chinese interests. In mid-June, the armed group released a video filmed by a drone flying over the port infrastructure of Haifa, a coastal city in northern Israel. Israel’s Foreign Minister, Israel Katz, quoted China on his X account following the publication of this video: “Today, Nasrallah is proud of the images of the Haifa ports, operated by international companies from China and India, and threatens to attack them“. In plain English: Israel Katz calls on India and China to react, to take a public stand against Hamas in order to protect their commercial interests.

Galia Lavi, a researcher affiliated to the Institute for National Security Studies at Tel Aviv University, has published an article analyzing this initiative on Aurora Israel. The researcher considers that Israel Katz’s appeal to India and China can only have a limited impact: she does not believe that China will take a firm stance on this issue, given the latter’s moderately but undeniably pro-Palestinian line since the beginning of the conflict.

What the researcher G. Lavi seems to omit, however, is that Hezbollah is subordinate to Iran, and that China exerts a strong influence on Teheran. As with the Houthis, China could therefore act behind the scenes to ease tensions between the armed group and Israel – not by taking a public stance, but by using diplomatic leverage to exert indirect pressure on Hezbollah (1). 

– Sanctions against Chinese companies supporting the Houthi movement

On June 17, the U.S. Office of Foreign Assets Control (OFAC) announced that it was freezing the assets of ten entities directly or indirectly supporting the Houthi terrorist movement, three of which are companies based in China (2). These three companies, Guangzhou Tasneem Trading Company, Ningbo Beilun Saige Machine Co. and Dongguan Yuze Machining Tools Co. are accused of helping the Houthi movement to obtain essential components for the production of their weapons.

On June 10, OFAC had already designated ten entities (including the Hong Kong-based shipping company Lainey Shipping Ltd.) involved in the import-export of products for sale to the Houthis, notably in China and Syria.

Although these designations have not had a significant impact in the international press, they nevertheless undermine the image of a neutral and irreproachable player that China is striving to build. Although the Chinese government does not appear to be directly involved, it is difficult to gauge the energy it puts into preventing this type of transaction. These sanctions also highlight China’s credibility in the eyes of the Houthis themselves, explaining the precautions taken with regard to Chinese-flagged vessels – which will not be targeted, according to spokespersons for the movement. Houthi aggressiveness in the Red Sea, however, remains a cause for concern for Beijing, as it continues to impact Chinese trade.

(1) It should be noted that the recomposition of Iranian power following the death of the previous president, Ebrahim Raissi, may compromise the immediate implementation of these efforts. However, the degree of danger represented by the partial or total destruction of the port, and the very likelihood of its realization, do not appear high enough to justify a major change in Chinese foreign policy. Even in the face of a temporary stalemate on the Iranian side, it remains unlikely that China will express any public criticism of Hezbollah’s actions.

(2) OFAC is a branch of the US Treasury Department charged with maintaining vigilance against actors violating human rights and/or acting against US interests. OFAC sanctions consist of freezing the assets of entities or individuals it designates. As a result, they can no longer access their funds and assets located on US soil, carry out a transaction with a US national, or transit any funds or assets through the United States. Any other person or entity offering support to those sanctioned (whether in the form of funds, goods or services) may also be affected.

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