Last month, details emerged of a mammoth new strategic accord that is now in the works between the People's Republic of China (PRC) and the Islamic Republic of Iran. Once finalized, the $400 billion, 25-year strategic pact will give Iran's ailing clerical regime—which has been hit hard over the past two years by the Trump administration's "maximum pressure" campaign—a much-needed economic boost in the form of new Chinese investments, construction and aid. In turn, the deal cements Iran as a major hub along China's vaunted "Belt and Road," providing the PRC with access to new ports and naval bases, making Iran a force multiplier for China's fledgling regional military presence and transforming it into a significant supplier of oil for the energy-hungry Chinese economy.
But Beijing isn't just banking on a partnership with Iran. The evidence is increasingly undeniable: China is making major moves in the Middle East. As part of that offensive, even as it cements its strategic bonds with the Islamic Republic, the PRC is simultaneously expanding its ties with Iran's two biggest regional adversaries.
The first is Israel, which has become a major focus of China's economic outreach to the region in recent years. Over the past half-decade, the PRC has become a major investor in the Jewish state, focusing in particular on Israel's vibrant (and highly lucrative) high-tech sector. That penetration, in turn, has become a serious source of concern for the Trump administration, which is increasingly worried that Beijing could gain insights into an array of emerging technologies and sensitive defense-industrial projects. U.S. officials have gone as far as to intimate that, unless it is properly regulated and overseen, China's deepening footprint in Israel might end up harming the latter's longstanding "special relationship" with the United States.
The second is Saudi Arabia. Since 2017, China has concluded over $100 billion worth of energy and trade deals with the House of Saud, in the process becoming a major enabler of the Kingdom's sweeping domestic modernization plan, commonly known as "Vision 2030." But Beijing is also feeding Riyadh's great power ambitions. As the Wall Street Journal has reported, China is aiding Saudi Arabia's drive to master nuclear processes by helping it build a facility to extract uranium yellowcake. That effort, many now fear, might be a precursor to a serious Saudi effort to develop nuclear weapons as a strategic counterweight to a nearly-nuclear Iran.
The results are undeniable. Through its shrewd straddling of the Sunni-Shiite divide and its contacts with Israel, the PRC has deftly positioned itself to become a key regional power broker. As Hudson Institute scholars Michael Doran and Peter Rough lay out in a masterful new essay for Tablet magazine, China is creating a "Middle Eastern kingdom"—a sphere of influence where it can advance its economic, political and strategic interests.
Significantly, it is also apparent that China is doing so at the expense of the United States. "American policymakers have long assumed that Chinese and American goals in the Middle East are largely complementary," Doran and Rough note. But China's recent machinations suggest that policymakers in Beijing see things quite differently, and that their ultimate goal is to supplant America "as the dominant power in the Middle East."
That makes China's burgeoning Middle East presence a cardinal challenge for the United States. Over the past three years, the Trump administration has made "great power competition" with the PRC a major tenet of its foreign policy. That focus has intensified dramatically in recent months against the backdrop of the global coronavirus pandemic, as the Trump White House has embarked upon what amounts to a "whole of government" effort to roll back Beijing's international position. Yet the United States now appears to be losing ground to China in one of the most important arenas in this contest: the Middle East. Unless Washington can formulate a serious response, it risks ceding its position in the region, as it is progressively outflanked by an ambitious and increasingly activist Beijing.