China-Middle East Economic Relations and the Belt and Road Initiative

Nader Habibi ()

No 131, Working Papers from Brandeis University, Department of Economics and International Business School

Abstract: While many Middle Eastern countries maintain strong military and strategic relations with the United States and Europe, they have significantly increased their trade and investment ties with China since 2000. China has emerged the largest trade partner and crude oil customer for most MENA countries. Now China is offering investment and financial incentive to Middle Eastern countries to join its Belt and Road global connectivity project. In Israel, Egypt and GCC countries China’s investments are oriented toward development of seaports and economic free zones near them. In Iran and Iraq, China is developing railways and highways to enhance their transit and transport connectivity in the Belt and Road land transport network. The Covid-19 pandemic has led to a setback in China’s infrastructure investments in MENA countries but it is using the health crisis to enhance its digital, telecommunication and healthcare related investments in the region. So far China has managed to maintain a policy and non-interference and neutrality in multiple conflicts among Middle Eastern countries and develop good relations with both sides of each conflict such as Iran and Saudi Arabia. China has also been very cautious about respecting the U.S. strategic interests in the region. The escalation of tensions between the United States and China might force China to change this strategy. China might react to recent attempts by the United States to prevent some MENA countries from awarding investment contracts to Chinese firms. China might also show more willingness to develop closer ties with the regional adversaries of the United States such as Iran and the Syrian regime.

JEL-codes: F55 O10 Q43 (search for similar items in EconPapers)
Pages: 18 pages
Date: 2020-09
New Economics Papers: this item is included in nep-ara, nep-cna and nep-int
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