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Hoover Institution

China Brokers Diplomacy between Iran and Saudi Arabia: Implications for the US Role in the Middle East

For over a decade, American officials have been touting the wisdom of a strategic “pivot” away from the Middle East in order to face the threat of a rising China. During that same period, Beijing has identified the Middle East as a primary arena for great power competition with the United States. 

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Caption
Political Bureau of the Chinese Communist Party, Saudi delegation, and Iranian delegation in Beijing, China, on March 10, 2023. (Luo Xiaoguang/Xinhua via Getty Images)

For over a decade, American officials have been touting the wisdom of a strategic “pivot” away from the Middle East in order to face the threat of a rising China. During that same period, Beijing has identified the Middle East as a primary arena for great power competition with the United States. The strategic dissonance between these two great power approaches to the region came to a head with the surprise announcement that Beijing had successfully brokered a rapprochement between Saudi Arabia and Iran. The game of regional power politics continues, even when America decides not to play.

Perhaps the outstanding irony of the Chinese-brokered deal, as underlined by an unnamed US National Security Council official who commented on the deal to Al Arabiya, was that the strategic goal of Saudi-Iranian rapprochement was born in Washington, not in Beijing. The fact that one of the chief goals of US Middle East policy is being implemented by China is a sign that while Chinese regional goals are well-aligned with America’s own goals, the result of this convergence has been to increase China’s clout, while America looks for the exit.

The surprise Saudi-Iranian deal therefore has less to do with any warming of bilateral relations between the two countries than it does with China’s ambition to fill the power vacuum left by America’s departure. While the decade-long American effort to romance Iran by guaranteeing its nuclear program has diminished America’s influence with both Teheran and Riyadh, China has become Iran's largest trading partner -- in part by flouting US sanctions. At the same time, China has also been establishing important economic relations with Saudi Arabia. In the new Middle East, it seems that only China possesses the will and the leverage required to guarantee a deal between the region’s two most powerful competitors.

Saudi Arabia partnered with the United States economically, politically, and militarily throughout the cold war. The strategic relationship between the two countries resulted in the defeat of the Soviet Union in Afghanistan after the Saudis increased oil production, thereby dropping oil prices to levels that rendered the Soviet war effort unsustainable. Saudi mujahideen fought on the battlefield alongside US-backed Afghans against the Soviet-backed government in Kabul. Saudi Arabia also bankrolled anti-communist media in Europe and countered Soviet influence across the Middle East.

Yet in today’s Cold War, Saudi Arabia has found itself cornered into dealing with communist China in order to secure its own regional position. While this alliance is hardly a familiar or entirely comfortable one, it may also be the only game in town. As the US touts the idea of pivoting away from the region, US allies find themselves with no choice but to deal with China in order to fill a destabilizing power vacuum left by America’s departure — a choice that is seemingly being encouraged by top Biden administration officials from National Security Advisor Jake Sullivan on down.

Beijing’s new role as a regional power broker is one that the Chinese have eagerly sought. News of the Saudi-Iran deal followed closely on the heels of a state visit by Chinese leader Xi Jinping to the Kingdom in February. Xi’s goal during that visit was to begin the process of supplanting the United States as Riyadh’s primary security and trade partner. By brokering a rapprochement with Iran, the Chinese have succeeded in demonstrating their potential value in that role. While the US seems to prefer pivoting away from the region, ostensibly to focus on the Chinese threat, the Chinese are pivoting towards the region in order to compete with the US, and secure their own interests. 

In doing so, Beijing is offering Riyadh a simple agreement: benefit to your heart’s content from cooperation with us on aerospace, defense, the automotive industry, health, and technology, and most importantly sell us your oil and choose whatever military equipment you want from our catalogue; in return, work with us to stabilize global energy markets. In other words, the Chinese are offering the Kingdom a bargain that seems to be modeled on the American-Saudi deal that sought to stabilize the region for 70 years.

China has now become a plausible regional rival to America – especially when it comes to trade. China’s GDP has nearly doubled in the past decade, to over 28 trillion dollars, making it one of the largest, fastest-growing and most attractive markets in the world. And as China’s domestic markets have grown, so has its trade with the Gulf. In 2021, China's imports from Saudi Arabia totaled $57 billion. And while the Kingdom today supplies China with 18% of its energy needs, that number still leaves tremendous room for growth. Chinese exports to Saudi Arabia in 2021, meanwhile, reached $30.3 billion -- a number that could easily double with expanded orders for petrochemical, industrial, and military equipment that the kingdom has historically obtained from US suppliers.

China’s trade relationships with Iran, meanwhile, are even more important to that country’s economy. As Iran’s largest trade partner and the source of the lion’s share of foreign currency arriving in the country, Chinese trade literally puts food on the table in Tehran. The outsized role it has established in the Iranian economy in turn gives Beijing significant leverage over a country that has endangered regional security, including by sponsoring large-scale missile attacks on Saudi airports and oil fields from Yemen.

Theoretically, only the Chinese possess the tools and leverage to shepherd a larger and more lasting de-escalation process that could establish a modus vivendi in Iraq, Syria, Lebanon and Yemen. And while that may be unlikely in practice, it would be unwise to deny the Chinese the chance to try their hand in the region. Certainly, it would be foolish to deny them the opportunity to deescalate tensions in the short and medium term amidst American absence in the region.

If China’s economic leverage makes Beijing a credible guarantor of the deal between Riyadh and Teheran, the deal also manifestly serves Beijing’s own interests. While the contents of the agreement are secret, the communique released during the announcement includes commitments on non-interference in internal affairs of other countries and respect for sovereignty. It is fair to suspect that the Iranians have made assurances to the Chinese that it will no longer attack the Kingdom directly and that Saudi oil infrastructure will no longer be targeted. Since maintaining the stability of the Saudi state and the steady flow of oil from the Gulf is a Chinese interest as well as a Saudi interest, there are good reasons to trust that the Chinese will put economic muscle behind their guarantee. Absent an American commitment to maintain regional stability, why should the Chinese not be given the chance to help out? 

Which is not to say that the deal is in the US interest. It is not. Today’s China views the Middle East as a primary arena of great power competition with the United States. By establishing itself as the guarantor of regional security and, in the future, of the free flow of global oil, China is consigning the post-Soviet US regional security order, established at such enormous expense in money and both American and Arab lives, to the dustbin. 

What the Saudis and their regional partners would like to see from America is more clarity on its strategic priorities in the region and its commitment to its post-Soviet security order in the Middle East. The Saudis are not looking for others to die for their security or to protect their energy infrastructure. They are looking for partners who can help them equip their own armed forces with the resources and weapons needed to protect their homeland.

While the strategic significance of the region might be lost on a certain class of Washington policy makers, the Chinese don’t have the luxury of geostrategic daydreaming. They understand the benefits that flow from being able to secure -- or turn off -- the world’s supply of oil. They also recognize that major world economies – starting with China – will continue burning carbon fuels in order to generate electricity, heat and cool the homes of their citizens, power factories, get to work, and grow food. 

While the American security order in the region has suffered various blows over the past 15 years, from the withdrawal from Afghanistan and Iraq, to letting Russia establish a foothold in the Eastern Mediterranean, to licensing Iran’s expansionist drives and its nuclear program through the JCPOA, no credible alternative to American leadership has yet emerged. A rising China that is capable of brokering a rapprochement between Iran and Saudi Arabia can easily change that equation. The fact that Washington may prefer not to compete with China for influence in the region will not protect either Middle Easterners or Americans from the consequences of a fight that China seems determined to win.

Read in Hoover Institution.