China continues to tout its economic ties in the Gulf this month, from a new low-carbon steel processing facility in Saudi Arabia to a series of meetings with Iranian officials and media campaigns promoting investment in the Iranian economy. But as investment continues at a rapid pace in Saudi Arabia, Iran has received little but platitudes and diplomatic meetings, showing little has changed since the Iran-KSA agreement vis-à-vis China’s economic engagement with the region. Beyond the Gulf, Egypt saw a surge in Chinese tourists, as China’s continued diplomatic support for Syria’s return to the Arab League signalled China’s growing comfort in its role in the region’s politics.
China and Saudi Arabia go Green…
China’s Baowu Iron and Steel Group has partnered with Saudi Aramco and the Public Investment Fund to jointly build the world’s first green, low-carbon thick plate steel manufacturing plant. The project highlights China’s focus in Saudi Arabia on jointly owned projects and greener, more sustainable technology. Chen Derong, Chairman of China Baowu, highlighted the significance of this project as an exemplar of international collaboration and a model for “mutually beneficial” economic cooperation between China and Saudi Arabia. The project also simultaneously contributes to Saudi Arabia’s two goals of domestic development and becoming a global power. Amin Nasser, President and CEO of Saudi Aramco, emphasized that the Saudi heavy plate project will enhance the local steel industry, strengthen supply chain localization, generate job opportunities, and promote economic growth and diversification in Saudi Arabia. Yazid Hamid, Vice President of the Public Investment Fund, expressed his confidence that the project will position Saudi Arabia as a prominent global steel industry supplier.
…While Iran Struggle for Attention
Meanwhile, in Iran business and investment remains low. There are some encouraging signs on the horizon, but we’ve heard it all before. On May 9, Wang Yi met with Mohammad Bagher Zolghadr, secretary of the Expediency Discernment Council of Iran, to (once again) commit to the implementation of the 25-Year Agreement. Yi also linked China’s relationship with Saudi Arabia and Iran to Syria once again, praising the return of Syria to “the big family of the Arab league” and expressing support for Middle Eastern countries “taking their destiny into their own hands.” Zolghadr also met with other officials, including Liu Jianchao, Minister of the International Liaison Department, where they discussed increasing regional and international coordination between the two countries.
But What About Those Oil Purchases?
Outside of the official economy, there are reports that Iran continues to sell large amounts of oil to China. While at first glance this may appear like more “mutually beneficial” activity, a closer look reveals a more complicated story. Although China is Iran’s only serious oil customer, the oil is being sold at a heavily discounted rate, a sign of the increasingly desperate state of its political and economic position. And the fact remains that Iran has no serious oil customers other than China. In fact, much of the oil purchases are likely driven by private Chinese “tea pot refineries,” which are less driven by Beijing’s desire to help out an ally and more by economic opportunism.
It’s not Boeing, but it’s a start
Thought it didn’t stop the international press, there were also several official media reports highlighting events like the 5th Iran Export Potential Expo, which was held in Tehran on May 10 to promote business partnerships between Iranian companies and international buyers, as well as an in-depth report on the development of Iran’s airline industry that had overt political overtones. Titled “Seeking Development in Adversity,” the article highlighted Iran’s Yasin training jet, and the potential of its aviation industry overall. “Throughout the history of the development of its aviation industry, Iran has long been seeking development in the face of adversity, and has made great progress…It can be said that the successful launch of new weapons and equipment represented by the “Yassin” trainer aircraft is a powerful blow to the sanctions imposed by the United States and Western countries, and it also heralds a new starting point for Iran’s aviation industry.”
Cairo or Bust
Elsewhere in the Middle East, there are signs of China’s continuing diplomatic and economic presence. A surge of Chinese tourists in Egypt have been a boon for the local economy. Abbas Saeed, a 38-year-old Egyptian tour guide, told reporters that since the beginning of this year, the momentum of Chinese tourists returning to Egypt has increased dramatically. “This not only increases the income of Egyptian tour guides and other tourism practitioners, but also promotes the development of tourism in Egypt overall.” Egypt has taken pro-active measures to take advantage of its popularity with Chinese travellers, who are drawn to a country that, like China, has an “ancient civilization.” In order to attract more tourists, the Egyptian tourism department introduced measures to make the process easier, such as visa on arrival. “When we learned that Chinese tourists could return to Egypt, we started various preparations to attract [them],” according to Mohammad Salama, head of the Tourism Office of the Egyptian Tourism Promotion Agency. China is also deeply involved in development and construction in New Alamein City, a major government project designed to support Egypt’s “Vision 2030” development program. Several high-rise apartment complexes are being constructed under the supervision of Chinese companies, which are being touted as a “symbol of Sino-Egyptian friendship and the success of the BRI initiative.”
