China’s BRI might reshape the GCC’s geostrategic environment
The BRI is the most high-profile aspect of China’s foreign policy. It has the potential to reshape multiple global and regional trade flows, which means it will have global geostrategic implications, not purely economic effects. The BRI is an evolving concept, and some changes to planned routes linking China with other countries are likely. Implementing the BRI faces many logistical, financial and political challenges, so its future reach and impact are difficult to assess.
Despite these uncertainties, many in the Arab world are keen to be part of China’s grand plans for the BRI. All the Gulf Cooperation Council (GCC) countries have expressed support for it. Saudi and Chinese leaders have highlighted common interests between the BRI and the Kingdom’s Vision 2030, including during King Salman’s visit to China in March.
To date, the land routes completely bypass the GCC. The maritime routes are more directly relevant, passing through the Arabian Sea and Red Sea. The GCC is more likely to be linked to the BRI via its trade and political relationships with other countries along the routes. In some cases the BRI is likely to benefit GCC allies, but some rivals stand to gain advantages too.
As GCC states seek to continue expanding their trade, investment, tourism and other parts of their relationships with China, they will have to balance their natural interests in those relationships with the potential pros and cons from the BRI. While Beijing takes a broader view of the BRI than simply routes plotted on a map, the GCC faces some risk of being sidelined as China’s expanding economic relationships and emerging trade flows develop elsewhere.
At the same time, while understanding the importance of China’s growing global role, GCC leaders are wise to maintain diversified economic and political relationships that involve other countries, some of them economic or political rivals to China. This creates a complicated balancing act.
The BRI offers potential economic advantages to the GCC, even without a specified land corridor to the Arabian Peninsula. As China invests in developing energy and infrastructure in countries such as Kazakhstan, Pakistan, Malaysia, and others where GCC states often have good relations and shared economic interests, China’s involvement is likely to increase investment, trade and other business opportunities for the GCC as well.
This is particularly true in cases where the GCC can offer strong expertise, such as in ports, logistics, and oil, gas and renewable energy projects. In its GCC investments, China might prioritize projects that improve global connections to the BRI; China’s current investment in Oman’s Duqm Free Zone is one example. Also, Saudi Arabia, the UAE, Oman and Qatar are members of the Asian Infrastructure Development Bank, a key partner in funding BRI development projects.
There also could be strategic benefits for the GCC in cases in which Chinese BRI investment helps bolster the bloc’s allies, such as Pakistan and Egypt. In these cases, the interests of China and the GCC could be closely aligned, aiming to enhance economic stability, trade and investment opportunities, and political stability in GCC-allied countries.
Furthermore, China’s preference for developing global relations, including with the GCC — based on economic ties, not on promoting Chinese values or political interests — has simplified relations in comparison to those with Europe and the US.
There is significant potential for GCC states to benefit from the Belt and Road Initiative (BRI) while maintaining diversified global relations, but achieving that will require frequent adjustments in diplomacy and economic policy.
Kerry Boyd Anderson
However, the BRI is likely to benefit countries with which some GCC states, especially Saudi Arabia and the UAE, have difficult relationships. The most important one is Iran, which plays a significant role in plans for a land-based route for the BRI. The initiative envisions further Chinese investments in and connections to Iran. Turkey and Russia also play important roles in the BRI and stand to benefit.
Two of the planned economic corridors of the BRI, to date, highlight the pros and cons for the GCC. The China-Pakistan Economic Corridor (CPEC) will run from China through Pakistan to the port of Gwadar on the Arabian Sea. China is investing a reported $60 billion to build infrastructure and special economic zones for this corridor.
CPEC offers significant potential to bolster the economy of this GCC ally. This presents trade, investment and business opportunities for the GCC, though its member states will have to manage India’s concerns about the corridor, and a more advanced port at Gwadar might add to increasing competition among regional ports.
The China-Central-West Asia Economic Corridor (CCWAEC) presents clearer downsides to some GCC countries, especially Saudi Arabia and the UAE. This corridor is planned to run from China through Central Asia, with one terminus in Turkey and another in Iran. For those who view Iran as their primary enemy, and who also may have concerns about Turkey, this corridor is deeply problematic.
If fully developed, it would significantly expand Iran’s and Turkey’s economic and political relationships with China and other regional countries, as well as enhance Iran’s and Turkey’s own economies and influence.
There is significant potential for GCC states to benefit from the BRI while maintaining diversified global relations, but achieving that will require frequent adjustments in diplomacy and economic policy as the BRI reshapes the region’s geostrategic considerations.
• Kerry Boyd Anderson is a writer and political risk consultant with more than 14 years’ experience as a professional analyst of international security issues and Middle East political and business risks. Twitter: @KBAresearch