China Is the New Power Broker in the Persian Gulf

Oil is transforming 
the country’s foreign policy. Can the 
United States handle 
the consequences?
For much of its history, China has made a point of steering clear of other countries’ internal affairs. But that changed late last year, when the Middle Kingdom entered into the international arena in a way it hadn’t before, offering both money and military might to fight the terrors of the Islamic State. More than China’s typical muscle flexing, these actions—like much of the country’s foreign policy in the past decade—can be traced back to a growing trend: an urgent and gluttonous appetite for imported energy, specifically oil.

This raises one of the big, looming questions that will help define relations between Washington and Beijing in the decades to come: As the shape of China’s energy addiction starts to resemble that of the United States, will China’s global role follow suit?

In just a single generation, thanks to unprecedented economic growth, China went from being self-sufficient in crude oil (producing what it consumed) to nearly displacing the United States as the fuel’s biggest importer. In 2014, China imported about 6.2 million barrels per day on average, while the United States took in roughly 7.4 million. In December, Chinese oil imports topped 7 million barrels a day for the first time, while U.S. crude production continued to increase to more than 9 million barrels a day, virtually as high as it has ever been.

Where and how China gets all that oil has become a headache for the country’s leadership, now experiencing many of the same problems that have bedeviled U.S. presidents since Richard Nixon. Beijing is learning the lesson of OPEC’s 1973-1974 oil embargo—that steady supplies of oil, especially from the Middle East, are critical for steady economic growth. China now imports about 60 percent of its oil, and the list of key suppliers includes some of the world’s most volatile countries: Iran and Iraq and, outside the Middle East, Sudan and Venezuela. All these states have had oil output disrupted by violence, terrorism, dysfunction, or international sanctions.

This increasing reliance on unstable countries has spurred China to undertake its first-ever overseas deployment of combat forces in a peacekeeping role—in Africa, where China has long been involved in investment, infrastructure, and agriculture programs. In 2013, Beijing sent 170 troops to Mali to help prevent the country’s tumult from spilling into its oil-rich neighbors, such as Algeria and Libya. A year later, in another first, China leaped into peace talks between warring factions in South Sudan.

But securing oil production isn’t China’s only worry; shipping, of course, is also a key concern. More than 80 percent of Beijing’s imported oil has to wind its way through a global choke point, the Strait of Malacca—a channel near Singapore that shrinks to less than two miles wide and handles more than 15 million barrels of oil shipments a day. In a 2003 speech, Hu Jintao, then China’s president, articulated the “Malacca dilemma”: the fear that “certain major powers”—code for the United States—could cut China’s energy lifeline in this narrow passage, mirroring what America did to Japan during World War II. In turn, Hu accelerated a naval modernization program, which has continued under President Xi Jinping, with the launch of China’s first aircraft carrier, the introduction of its first anti-ship ballistic missile, and a tripling of its destroyers, frigates, and attack submarines. Some of this progress has been on display since 2008, when China deployed long-term anti-piracy patrols in the sea lanes off the coast of Somalia and in the Gulf of Aden—its first overseas naval mission in 600 years. And in a step intended to eliminate its seaborne vulnerabilities, China opened a gas and oil pipeline across Myanmar in late January 2015.

China’s new oil-fueled engagements saw a definitive shift toward the Middle East when, in November 2014, Beijing offered Washington money (some 
$10 million) to aid displaced persons in Iraq. A month later, it offered Iraq military support in the form of airstrikes for combating the Islamic State. Coming from a country that has long viewed U.S. military interventions as the sharp end of nefarious Western plots, these offers were startling. But they were in line with open discussions by top officials, including Foreign Minister Wang Yi, about an increasingly prominent Chinese role in the region. As a case in point, Beijing’s new Middle East envoy is an expert in Israeli-
Palestinian peace talks—a sign that China is preparing for full-bore involvement in one of the Middle East’s most intractable issues.

The change in China’s foreign policy comes just as the United States is trying to detangle itself from a decade of troubled wars. A full withdrawal from the Middle East will be impossible, given the eruption of the Islamic State and a long-standing promise to protect energy supplies for America’s allies. Consequently, the United States will need to figure out how to work with a confident China—not just in Washington’s pivot to Asia, but in Beijing’s pivot to the west.

In a way, Washington has been asking for this. U.S. officials have long pushed China to pull its weight internationally; President Barack Obama complains that China has been a “free rider” for decades, benefiting immensely from global trade and energy flows made possible by the U.S. Navy. In that sense, Chinese peacekeepers in Africa and China’s anti-piracy patrols have been welcomed as a sign that Beijing is becoming, in the words of former Deputy Secretary of State Robert Zoellick, a “responsible stakeholder” in the international system.

But there is an important and potentially dangerous flip side, particularly in the Middle East: As China gets big enough to pull its own weight, it will also get big enough to actually throw it around.As China gets big enough to pull its own weight, it will also get big enough to actually throw it around. This reality is already becoming apparent in China’s backyard, where air-defense zones and bristling gunboats are helping Beijing push territorial claims against smaller neighbors. Where the Chinese military feels comfortable operating—in the South China Sea, for instance—it has repeatedly and recklessly challenged U.S. aircraft and surface vessels. One fear for Washington is that this behavior will reach the Middle East. The last thing the United States wants to see is its freedom to maneuver in the region curtailed by an active and capable China.

Granted, that’s not going to happen overnight. Unlike the United States, China doesn’t have formal alliances in the Middle East or air and naval bases nearby—not yet, anyway. And despite recent advances, the Chinese navy is still decades away from matching U.S. firepower. But that doesn’t mean that China will cede the playing field. It still has plenty of leverage: economic influence, a no-strings-attached approach to aid and investment, and an increasingly proactive diplomatic corps backed by strong leadership. The United States may not have to confront a Chinese carrier-strike group in the Persian Gulf just yet, but it still needs to prepare for cohabitation or collision—or both.


Published in Foreign Policy Magazine 26th March, 2015