China’s emergence as key mediator in the Middle East

On March 10, 2023, the announcement China had mediated a deal between Iran and Saudi Arabia to resume diplomatic relations took the region by surprise. The signing ceremony held in Beijing signalled a promising thaw in relations following a seven-year rupture in formal ties between the two regional rivals. While details have yet to be released on the extent of China’s involvement in brokering such an agreement, a joint trilateral statement expressed the parties’ gratitude towards Iraq and Oman for initiating rounds of dialogue starting in 2021. The announcement received praise from around the region.

In addition to reopening respective embassies to formally re-establish diplomatic relations, the agreement also paved the way for future cooperation in the fields of economy, trade, investments, and technology, among others. It is anticipated China may now play a larger role in resuscitating future JCPOA talks with the promise of providing investments in Iran’s ongoing currency crisis. China has also announced its intention to host a conference between GCC members and Iran in the near future, signalling its long-term commitment to play a larger role in Middle East politics — a stark contrast to the US whose main priority remains its own strategic competition with China and serving as Ukraine’s main military backer against Russia’s unprovoked war.

The significance of such an agreement signals a new chapter in rapprochement between the regional heavyweights whereby reducing regional tensions unlocks the potential for substantial economic benefits for both countries.

Backdrop

Since the 1940s, China has implemented a non-interventionist approach towards its foreign policy, abstaining from raising concerns in the internal affairs of other countries. Such an approach poised China as a neutral mediator gaining confidence from both sides — a position that would have been impossible for the US to obtain considering its long history of interfering in the politics of the region. Considering the US’s non-existent diplomatic capacity with Iran, the Americans would have had little to no ability to enforce such an agreement.

China’s role

Seeing as the announcement of the Iran-Saudi agreement coincided with the start of Chinese President Xi Jinping’s third presidential term, China’s role in brokering the rapprochement between Iran and Saudi Arabia underscores Xi’s ambition of offering an alternative to a US-led world order. However, it will remain a test for the viability of China’s newly-executed political influence and whether it holds enough sway to deaccelerate Iran’s nuclear programme — one of the main drivers undermining regional stability.

Following the 2021 agreement in which China committed $400 billion in infrastructure investments over 25 years in Iran in return for a steady flow of discounted oil, such partnerships further deepen President Xi’s influence in the region while undermining America’s efforts to keep Iran economically crippled and isolated via sanctions as a means to renegotiate the nuclear deal. Today, China’s rise as a more assertive power broker in the Middle East would serve as a seismic shift from its previous approach which centered mainly on promoting trade and investment in the resource-rich region rather than wading into seemingly intractable conflicts.

China stands to gain several benefits from brokering the Iran-Saudi rapprochement. Mediating an agreement between the Middle Eastern rivals underscores the Chinese leader’s ambition of offering an alternative to a US-led world order while nailing down a diplomatic and PR win — one could argue at the expense of the US. Furthermore, the implications of regional calm resulting in stabilised oil markets serve as an economic win for China in the long term.

(Dr Kristian Alexander is a Senior Fellow and the Director of International Security & Terrorism Program at TRENDS Research and Advisory, Dubai. Gina Bou Serhal is a researcher at the Strategic Studies Department at TRENDS Research & Advisory, Dubai.)