Iran-Saudi deal: China's growing clout in the Middle East

After China successfully brokered a deal last week to restore relations between Iran and Saudi Arabia, Beijing appears set to take on a larger role in the Middle East and potentially challenge US dominance in the oil-rich region.   

Under the agreement reached in the Chinese capital on Friday, Riyadh and Tehran agreed to reopen their embassies and exchange ambassadors after seven years of severed diplomatic ties and tensions. 

The rivalry between Iran and Saudi Arabia, respectively the leading Shiite and Sunni Muslim powers in the Middle East, has dominated regional politics in recent years, affecting not only the two nations but also others with both sides backing rival camps in proxy wars from Yemen to Syria and elsewhere. 

Beijing described the result as a "major outcome" achieved through "concerted efforts" by the three countries, emphasizing that China "pursues no selfish interest whatsoever in the Middle East." 

"China has no intention to and will not seek to fill the so-called vacuum or put up exclusive blocs," Beijing said in a statement on Saturday, adding: "China will be a promoter of security and stability, partner for development and prosperity, and supporter of the Middle East's development through solidarity."

Tricky region for Chinese diplomacy

The deal is a major triumph for Chinese diplomacy, said Camille Lons, a research associate at the International Institute for Strategic Studies. 

It also marks a shift in Beijing's strategy as "until now, it had refused to get entangled in regional disputes, and smartly benefited from the US-led security umbrella while doing business with the entire region," she noted. 

"But by getting more involved in politics, China takes the risk of exposing its own limits." 

Ian Chong, an expert on China's foreign policy at the National University of Singapore (NUS), shared a similar view.  

He pointed out that Beijing may find the Middle East to be a tricky region to operate in. 

"There are lots of complicated interests and tensions so how brokering this deal between Iran and Saudi Arabia will play out remains to be seen," he told DW.  

A long presence in the Middle East 

China has cultivated strong economic and political ties with both Riyadh and Tehran in recent years. Saudi Arabia is China's largest oil supplier, with trade between the two countries amounting to $87 billion (€81 billion)  in 2021. 

Commerce between Iran and China, meanwhile, was worth more than $16 billion in the same year, with Tehran depending on the Asian giant for as much as 30% of its foreign trade. 

China has also pledged to invest $400 billion in Iran over 25 years. 

Chinese President Xi Jinping traveled to Saudi Arabia in December for a state visit, and Iranian President Ebrahim Raisi visited Beijing in February.

Chong from NUS said that by facilitating this deal, Beijing is signaling that it is now not just a leading economic player but is also willing to get involved in politics in the Middle East, a region which is the primary source of China's energy imports. 

Tuvia Gering, an expert on China-Middle East relations at the Diane and Guilford Glazer Center at the Institute for National Security Studies in Israel (INSS), said Beijing hopes to carve out a bigger role for itself because the region has become "strategically important" to it. 

"It's not just for energy security, but on this wider gamut of areas," Gering told DW, pointing to Chinese investments in regional infrastructure as part of its massive multibillion-dollar Belt and Road Initiative. 

The Saudi-Iran deal comes at a time when many countries in the region perceive the US as winding down its engagement there. 

This doesn't mean Beijing could replace Washington in the Middle East, said Gering. 

"China said it doesn't want to be dragged into regional conflicts, and I don't think that wish has changed even though recent developments may have given Beijing a bit more appetite to become more active," he underlined, adding that China still needs to gain the region's trust before it can become a reliable partner. "China is still a new actor and these things take a long time." 

Is US influence waning? 

The US, meanwhile, welcomed China's efforts to help end the war in Yemen and deescalate tensions in the Middle East, but rejected the notion that it was stepping back from the region. 

It also stressed that the agreement was two years in the making.

"This is not about China. We support any effort to deescalate tensions in the region. We think that's in our interests, and it's something that we worked on through our own effective combination of deterrence and diplomacy," said White House national security spokesperson John Kirby.

John Calabrese, director of the Middle East-Asia Project at the Middle East Institute, said Beijing's role in brokering the deal doesn't fundamentally alter Washington's position. 

In his view, Beijing's main goal in the region is still "maintaining its economic interests and expanding its economic equities."

"This requires regional stability to the extent that the US is still equipped to do so," he said, adding that de-escalation between Tehran and Riyadh is in the interest of the Middle East, China and the US.

And despite US-Saudi tensions over an array of issues — ranging from human rights violations to Riyadh's continued participation in a pandemic-era oil pact with Russia — Saudi Arabia remains one of Washington's staunchest security partners in the region.

Lons from IISS said the agreement shows that Gulf states like Saudi Arabia are willing to diversify their security and strategic partnerships so that they do not rely entirely on the US.

She described these countries' approach as "pragmatic" and warned against overestimating Beijing's importance to the region.

"When it comes to hard security guarantees, they are fully aware that the US remains their key partner."

Edited by: Srinivas Mazumdaru