The Silk Road in the Red Sea

Gabriela Dominguez Africa, Analysis, Asia, Conflict & Security, Economics Leave a Comment

The opening of China’s military base in Djibouti has surfaced as an initiative that seeks to further the progress of its One Belt One Road Initiative. While Beijing argues that the interest behind the initiative is to increase regional connectivity and trade benefits, other states continue to stand against it arguing that this is a thinly veiled attempt by the Chinese to place themselves at the centre of the global trading-network.

Economic growth has become one of China’s main priorities, consequently so has the drive to implement an economic land belt and maritime road that increases trade in Eurasia. To increase their probabilities of success, President Xi Jinping has emphasized a “Three No’s” statement to assure that their trade initiative has no intent to exploit or politically control any of the collaborative states. However, these efforts have failed to ease global concerns; it seems inevitable to ignore the political influence that a state is likely to acquire through the control of a military base at the entrance of the Red Sea. As an artery for global shipping, control of this area extends a state’s power over trade and their ability to cut off its flow when desired.

Beijing has already acquired the port of Hambantota in Sri Lanka and is looking at the possibility to establish a bridgehead in the Middle East. In the past, China has not had much influence in the geopolitics of the Middle East, however, the recent progress of China’s ambitious plan for a Silk road trade route threatens to affect the balance of power in the Middle East and the U.S. influence within it.

Despite growing international concern, it is unlikely for President Xi Jinping to jeopardize relations with the Gulf given that their oil supplies make up for a 51% of China’s imports. But after their latest troop deployments at the base in Djibouti, Beijing might find itself drawn ever deeper into the region’s conflict, especially the Sunni-Shia rift between Riyadh and Tehran, both of which have a dialogue with Beijing. Additionally, Beijing has emphasized the importance of developing relations with Saudi Arabia and Iran, which have great strategic significance and huge development potential due to their big reserves of oil and energy.

China has been relatively unfamiliar with Iran for many years, but Tehran’s recent rise as a regional leader has inspired efforts of cooperation between both nations. The inauguration of the MOU think tank marks the first international cooperation agreement between these two powers on the Belt and Road Initiative. Both nations are growing closer together but their joint actions seem to be getting further away from their initial intentions to further development and peace. A joint naval exercise in the Gulf has already taken place; two Chinese warships docked at Iran’s Bandar Abbas port, which has furthered Beijing’s military expansion in the area. Given their geopolitical history, the latter actions imply China’s willingness to use its military muscle to keep strategic channels open given the existent probability to engage in conflict with the U.S or India.

Beijing has also fueled a plausible economic shift in the Middle East after signing $65 billion worth of contracts with Saudi Arabia during King Salman’s visit to Beijing this past March. The resulting loss of faith in the Middle East allies towards the American government increases Chinese odds to engage in cooperation with Saudi Arabia and the Gulf States. Beijing has wanted for oil to be traded in yuans to increase its capital inflow and for it to become a probable alternative to the American dollar. Consequently, it has increased energy imports from non-OPEC countries in recent years. The latter efforts alongside growing Saudi-Chinese relations, give Beijing a valuable foothold in the Gulf to persuade a leading oil producer to upend the way oil is traded: from American dollars to Yuans.

Economic development has been a priority in China since 1978, therefore the emerging desires to establish a relationship between the Chinese Communist State, Iran and Saudi Arabia are of no surprise. China’s view of the Middle East is not Saudi-Centric; Iran represents an ideal partnership in terms of oil supplies and because of its position on the land route to Europe. China grew closer to Iran after the signing of the Nuclear Deal and have continued to build since then. However, recent American withdrawal from the Nuclear Deal might compromise the development of economic cooperations between China and Tehran.

China has already invested on its One Belt One Road Initiative and is planning to do the same for its Silk Road initiative, which seeks to connect East Asia, Central Asia and Europe to increase economic connections and trade. As a way to further these projects Beijing has already developed relations with key states in the Middle East, consequently, mantaining regional stability in the area has also become a central factor in the development of a ‘Silk road’.

Moreover, given that the tendency of powerful countries to interfere militarily with the domestic affairs of smaller states has not worked out well in the past, it is necessary for China to maintain its current policy of non-interference in the area. In essence, as China keeps to grow its economic presence in the Middle East, it will get more involved (politically and economically) in a region that has been plagued with turmoil and conflict for decades, which immediately raises concerns at the international geopolitical level.

About the Author

Gabriela Dominguez

Gabriela Domínguez is a research analyst at the Canadian Centre for Strategic Studies. As a recent alumnus of Concordia University (’18), she holds a Bachelor of Arts in Political Science and a Minor in Law and Society. Her fields of research include economics, conflict and security. Gabriela intends to pursue further research in International Security and Diplomacy.

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