Chinese President Xi Jinping began 2016 with a tour through the Middle East, visiting Saudi Arabia, Iran, and Egypt in hopes of strengthening ties and increasing Chinese influence in the region. The trip was part of the “One Belt, One Road” (OBOR) initiative, a strategy proposed by Xi in 2013 and aimed at connecting China with the Eurasian region.
After more than two decades of rapid modernization spurred by western investment, Beijing sees OBOR as an opportunity to export its own economic capabilities and influence westward, while at the same time flexing its industrial muscle. With President Xi’s new effort of spreading influence to the Middle East and beyond, Washington is watching with a close eye to make sure Beijing does not overstep its reach.
With a declining Chinese economy and an increasingly chaotic Middle East, the question many experts are asking is whether OBOR will ever come to fruition, or if it will forever remain a pipedream for President Xi.
Historically, China’s Silk Road was an ancient network of trade routes that helped to facilitate communication among Asian civilizations. President Xi’s new “One Belt, One Road” initiative has two parts: a land-based “Silk Road Economic Belt” (SREB), and the naval “Maritime Silk Road” (MSR).
The Silk Road Economic Belt travels through central Asia, to the Middle East, and into Europe. President Xi’s vision for the SREB is an integrated economic zone achieved through infrastructure financing, cultural exchanges, and increased trade. Complementary to the SREB, the Maritime Silk Road travels through ports in the South China Sea, the South Pacific Ocean, the Indian Ocean, through the Suez Canal to the Mediterranean Sea.
While China’s recent economic decline could be construed as a problem for OBOR, President Xi sees the initiative as the solution to Beijing’s economic woes. With access to new markets, Beijing hopes to deliver Chinese products, made by industries at excess capacity, to new, foreign customers. Chinese construction companies, already having mastered industrial capabilities at home, hope to use their talents to build up the infrastructure along the New Silk Road—beginning with the construction of a high-speed railway in Tehran.
The Chinese RMB will be the currency used in all transactions as part of this initiative, which could contribute to the stabilization of the Chinese economy. Beijing also hopes increased capital and improved infrastructure in tumultuous countries on its border, namely Pakistan, will help to ensure regional stability and communication.
Below these surface level gains, Beijing hopes the land based Silk Road Economic Belt will lessen China’s dependence on South East Asian shipping lanes for access to energy and raw materials from the Middle East and Africa. Beijing knows that these shipping lanes will play a critical role in any U.S. led military strategy towards China.
The China-led Asian Infrastructure Investment Bank (AIIB) will serve as the funding arm of OBOR, which has a projected investment of $1.4 trillion. Spanning from Europe to Australia, 57 countries signed on as Potential Founding Members of the AIIB in September 2015, with Japan and the United States refusing to join.
In the seemingly constant competition between the U.S. and China, Beijing is exerting its economic influence while Washington continues to focus militarily in the region. China traditionally condemns interference in other countries domestic affairs—something the U.S. is often criticized for doing. Concerned China could be chided for its new effort, President Xi said at the Arab League Headquarters last week, “Instead of looking for a proxy in the Middle East, we promote peace talks; instead of seeking any sphere of influence, we call on all parties to join the circle of friends for the Belt and Road Initiative; instead of attempting to fill the “vacuum,” we build a cooperative partnership network for win-win outcomes.”
President Xi’s tour of the Middle East comes at a time of chaos throughout the region and high tensions between Mideast powers Saudi Arabia and Iran. China’s increasing presence in the region is drawing concern from the international community. With a growing number of its citizens residing in high-conflict areas, China may not be able to remain the non-interventionist state it claims to be.
The experts The Cipher Brief reached out to agreed that the One Belt, One Road initiative and President Xi’s trip to the Middle East mark a substantial shift in Chinese foreign policy, though they lack a consensus on what this means for the world’s second largest economy in the years to come. However, it is clear to The Cipher Brief’s experts that Beijing and the rest of the world will come to interact with each other in very different ways.
Up until now, China’s plans for “One Belt, One Road” have remained abstract and general. As President Xi fleshes out deals with Middle Eastern leaders for OBOR’s first infrastructure projects, China is expected to limit itself to purely economic agreements. Still, in a region where befriending one nation could make you an enemy of another, President Xi will have to be cautious as he seeks to advance the nation’s economy and foreign policy.
Alexandra Viers is an International Producer at The Cipher Brief.
