China’s Economic-Led Foreign Policy: to “Get Rich, with Purpose”

China’s burgeoning economic and political interests in the developing world – particularly in the Middle East and Africa – will compel Beijing to undertake a more activist approach to foreign policy. This new reality contrasts with China’s longstanding position of non-interference and will inevitably force China to become more engaged in the events that unfold across the Middle East and Africa.

• China has become the world’s second-largest economy, with an average annual growth rate of 10 percent over the last three decades. The domestic legitimacy of the Chinese Communist Party continues to depend on sustained economic growth.
• To fuel its expanding economy, China has become the second-largest oil consumer in the world behind the United States. It is projected to overtake the U.S. by the early 2030s, at which point it likely will import around 70 percent of its oil, according to the Council on Foreign Relations.
• Currently, about 50 percent of China’s oil imports originate from the Middle East and an additional 23 percent from Africa. Both regions play an integral role in China’s “One Belt, One Road” economic initiative to develop regional trade routes.
• To facilitate the supply of natural resources, China often entices partnerships through direct investment and loans for infrastructure development. For example, China imports about 15 percent of the United Arab Emirates’s oil exports, and in 2015 China signed a $330 million agreement with Abu Dhabi for a development project at the UAE’s southern Mender oilfield to build pipelines, oil gathering stations, sewage systems and power transmission lines.
• In Africa, China is trading attractive infrastructure-development loans for political clout and access to natural resources. For example, China’s state-owned export-import bank, China Exim, provided $29.3 billion of development projects to African countries between 2002 and 2009, and this continues to increase. Approximately 85 percent of Chinese imports from the continent are either oil or minerals.
• In the Middle East, China maintains close military relations with Iran. The two countries signed a military cooperation agreement in November 2016 detailing joint counterterrorism training and military excises. Just this summer, Chinese and Iranian navies held a joint drill in the Gulf of Oman and the Strait of Hormuz, a critical maritime chokepoint for the global flow of oil.