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How China Is Erasing US Influence in The Middle East

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From the sands of the Arabian desert to the bustling streets of Jakarta, China influence is steadily rising in the strategic regions of the Middle East and Southeast Asia. 

As the United States turns its focus to competing with China and countering its global ambitions, Beijing patiently built robust economic and political relationships across both regions over the past two decades. 

This was evident in China’s recent hosting of foreign ministers from Saudi Arabia, Egypt, Jordan, Palestine, and Indonesia in Beijing to discuss possible efforts to end the war in Gaza.

By also leveraging its economic might as the top trading partner for most states, China now seeks to parlay trade dominance into greater geopolitical clout.

This emerging power shift threatens decades of unmatched U.S. strategic supremacy in these key parts of the world. With China flexing its diplomatic muscles through mediation and investment, the balance of power is tilting. 

Arab nations like Saudi Arabia and Indonesia now face difficult choices managing relationships with both superpowers. 

Can they walk the tightrope between U.S. military protection and Chinese economic enticements? Or will the gravitational pull of China’s massive economy compel realignment toward Beijing’s orbit?

China is strengthening relations with Arab countries and seeking a greater role in resolving conflicts in the Middle East. 

This was evidenced by China hosting a delegation of foreign ministers from Saudi Arabia, Egypt, Jordan, the Palestinian Authority, and Indonesia in Beijing. The ministers chose to start their tour of UN Security Council members in China, showing trust in China’s growing influence. 

During the talks, Chinese Foreign Minister Wang Yi expressed China’s commitment to supporting Arab and Islamic countries as well as the Palestinian cause. The visiting ministers called for an immediate ceasefire in Gaza and humanitarian assistance, while appreciating China’s role. 

Though China has long backed Palestinians, it also has growing economic ties with Israel. By hosting the ministers, China signals its desire to be more directly involved in mediating disputes, as it did in mending Saudi-Iranian ties. The Gaza conflict presents an opportunity for China to increase its geopolitical role.

China recently played a pivotal role in brokering an agreement to normalize relations between regional rivals Saudi Arabia and Iran. After years of tensions, the two Gulf countries resumed diplomatic ties in March 2022 following negotiations hosted by China. 

Chinese President Xi Jinping laid the groundwork for this breakthrough during visits to both Riyadh and Tehran earlier this year, where he emphasized non-interference in internal affairs. The timing coincides with Xi’s third term as president, allowing China to position itself as an alternative mediator to the U.S. in the Middle East. 

While China portrays its “non-intervention” role as constructive, its interests in mediating are not altruistic. The Gulf region is vital for China’s economic and energy security needs. Stronger ties with Saudi Arabia and Iran boost China’s regional infrastructure projects and access to oil. 

The Saudi-Iran deal demonstrates China’s growing influence in the Middle East at the expense of U.S. dominance. It reflects China’s ambition to play a larger geopolitical role globally.

Diplomatic ties between Saudi Arabia and China have steadily strengthened over the past few decades across political, economic, cultural, and scientific realms. 

Major milestones include high-level leaders’ visits, agreements signed during King Salman and Crown Prince Mohammed bin Salman’s trips to China, Saudi Arabia joining China in moon exploration, and establishment of language programs. 

The countries also share key goals like Saudi Vision 2030 and China’s Belt and Road Initiative. Their flourishing bilateral relations and summits demonstrate deepened trust and a desire to collaborate closely on political and economic interests.

The recent currency swap agreement worth $6.93 billion between the central banks of Saudi Arabia and China represents deepening economic cooperation between the two strategic partners. Under the 3-year pact, which can be extended, the Saudi riyal and Chinese yuan can be directly exchanged and used for bilateral trade and investments. 

This will expand use of local currencies and promote growth in trade and investment flows. The swap line provides each country with access to the other’s currency to shore up reserves when required. 

For Saudi-China ties, this currency swap builds on already robust energy, infrastructure, and technology links. It follows China importing over $65 billion of Saudi oil annually and Saudi interest in conducting oil sales in yuan. 

The agreement demonstrates a willingness to move the relationship beyond dollar-denominated oil trade as well as shift power from global currencies to their own. 

With already over 40 currency pacts worldwide, this deal highlights China utilizing swap lines more regularly to deepen bilateral economic bonds aligned with its geopolitical interests.

China has also steadily expanded ties with Jordan in recent decades, though the relationship has faced some setbacks. Landmark moments include establishing diplomatic relations in 1977 and King Abdullah II’s trips to China aimed at economic and political cooperation. In 2015, China and Jordan signed a strategic partnership and deals worth $7 billion in sectors like energy, railways, and manufacturing. 

However, projects stalled due to financial disputes and U.S. pressure on Jordan over Chinese investments. 

Though trade grew, reaching $4.4 billion in 2021, relations remain asymmetrical given the two countries’ vastly different economies. While China provides aid and investment, Jordan struggles to balance economic interests with China and its strategic alliance with the U.S. Still, China considers Jordan an oasis of stability in the region.

China has also developed strong and flourishing bilateral economic ties with Indonesia in recent years. Under President Joko Widodo, China has become Indonesia’s top trade partner and a major source of investment and infrastructure funding. 

Bilateral trade between the two nations has surpassed $130 billion annually, nearly double the trade volume when Widodo first took office in 2014.

Indonesia has welcomed major Chinese-funded infrastructure projects under Widodo’s leadership. This includes the $8 billion high-speed railway connecting Jakarta and Bandung, with 75% of the funding provided by loans from the China Development Bank. 

Another flagship project is the development of Indonesia’s new capital city Nusantara, which has also received significant Chinese investment. 

Beyond infrastructure, China has become Indonesia’s second largest source of foreign direct investment after Singapore. The growing economic bonds are also seen in the increasing use of China’s currency, the yuan, in bilateral trade and financial transactions.

While there are concerns about environmental degradation and labor issues with some Chinese projects, Indonesia recognizes China’s importance in helping fund Widodo’s ambitious economic growth goals. 

Indonesia aims to become one of the world’s top five economies by 2045. China similarly sees Indonesia as vital to its Maritime Silk Road initiative under the Belt and Road program. 

The strategic partnership between the two Asian nations continues to deepen, with Indonesia open to further Chinese investment and collaboration on major economic initiatives. 

By expanding engagement with Arab states, China is signaling its growing ambition to play a larger role in the Middle East. By hosting Arab ministers and mediating disputes like Saudi-Iran ties, China is positioning itself as an alternative geopolitical power to the U.S. in the region. 

China portrays itself as a partner supporting development and non-interference in internal affairs. However, its interests are not altruistic. The Gulf’s energy resources and infrastructure potential boost China’s economic interests. Stronger relations with Saudi Arabia, Iran and others also grant China more influence over global oil markets.

China’s deepening strategic partnerships with Saudi Arabia and other Arab nations reveal attempts to shift the regional balance of power. Robust trade, swap agreements and Saudi acceptance of oil sales in yuan all reduce the dominance of the U.S. dollar. 

As Arab states hedge between the U.S. and China, they grant Beijing more room to exert its political and economic weight. China’s mediation roles also aim to undermine U.S. influence and establish its model of non-interference as an alternative.

For the U.S., China’s growing ties with Arab partners represent a significant geopolitical challenge. As Arab states boost economic bonds with China, they may become less willing to stand against it on issues like Iran, Taiwan or human rights. 

China’s ability to mediate disputes in the Gulf also robs the U.S. of strategic leverage. While America remains the dominant military power, its political sway is increasingly tested by China’s financial strength and willingness to boost trade and investment without conditions. As U.S.-China rivalry intensifies, competition over relationships with Arab states will likely escalate further.

As China deepens economic and political ties with Arab states, its rising regional clout could reshape the geopolitical landscape of the Middle East. Though the U.S. still retains military primacy, China’s approach of non-interference and unconditional investment may gain more appeal and allow Beijing to exert greater leverage. 

With the Middle East taking on growing importance in the U.S.-China strategic rivalry, the future of the region could see diminished Western sway and increasing alignment with Chinese interests.

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