How China thrives in a world of turmoil

To hear America and other long-established powers tell it, China has unique influence over that region’s worst agents of disorder, starting with Iran, and an unusual need for stability in the Middle East. China is the world’s largest importer of both oil and liquefied natural gas, buying vast quantities from Iran and Arab countries alike. It is a big regional investor, with tens of billions of dollars at stake in such countries as Egypt, Saudi Arabia and the United Arab Emirates.

As the world’s biggest manufacturer, China is exceptionally exposed to spikes in global shipping rates. That is a painful distinction when drone and missile attacks by Iranian-armed Houthi rebels in Yemen have all but closed the Red Sea and Suez Canal to container ships, sending Europe-bound Chinese exports on a costly detour around Africa.

With these arguments in hand, the Biden administration and other Western governments have spent months asking China to lean on Iran and the Houthis. In meetings with Western officials, Chinese diplomats are ambiguous, hinting at messages passed to Iran while playing down their influence in Tehran, and questioning whether Iran has much sway over the Houthis. Far from sending People’s Liberation Army (PLA) warships to join an American-led military coalition that has escorted civilian ships and attacked Houthi radar and missile sites, China’s foreign minister, Wang Yi, has noted that American and British strikes in Yemen lack UN Security Council approval.

In late July leaders from Fatah and Hamas, the rival Palestinian factions, met in Beijing for unity talks that Mr Wang called “an important historical moment”. Others were more sceptical, noting that the resulting Beijing Declaration, signed by Fatah, Hamas and 12 other Palestinian groups, left unresolved the thorniest questions, such as who should control security in post-war Gaza.

In Beijing, Western diplomats murmur that Chinese leaders have no illusions about their ability to solve the Middle East puzzle, but see an easy win in playing the peacemaking host. Meanwhile, China knows that its calls for an immediate ceasefire in Gaza and its vocal support for a Palestinian state align with the views of most countries, notably those in the global south. The most cynical Western voices suggest that, though China would surely prefer a quieter world, today’s disorder does at least keep American aircraft carriers and diplomatic envoys usefully tied up in the Middle East, rather than making trouble in China’s backyard.

To scholars from China’s foreign policy and security establishment, such Western analysis is lamentably crude. “How many US troops can the Houthis in the Red Sea tie down? Not many, that is too simple,” says Hu Bo, a professor of maritime security at Peking University. Yes, Chinese exporters face higher costs with the Red Sea closed, but there is no evidence that their losses are “unbearable”. In the absence of a UN mandate, even escorting ships in the Red Sea “implies China is against the Houthis, or against Iran”, says the professor, and imperils China’s preferred stance of neutrality in the Middle East. Put bluntly, the Red Sea crisis is “not on China’s doorstep”, so Chinese people wonder, “why should we help the United States solve this trouble?” reports the professor.

Zhou Bo, a retired PLA senior colonel, chides Western governments for arguing that, as the largest trading power on Earth, China should be willing to strike Houthi targets or apply pressure to Iran, in the name of upholding freedom of navigation on the high seas. The root cause of the crisis is “because Israelis are bombing and killing in Gaza”, he says. The Houthis have said that Chinese-flagged ships are not their target, he adds, and most Chinese cargoes are already sailing around the Cape of Good Hope. Mr Zhou, now at Tsinghua University’s Centre for International Security and Strategy, cautions that frigates and destroyers—the warships that the PLA would send—have limited air defences. What, he asks, would be the purpose of such ships entering the Red Sea and firing on the Houthis? As for China applying pressure on Iran: “The point is at what cost would you make use of your influence?”

An executive at a multinational company in China goes a step further. He argues that “we should be very careful about assessing disruption as bad for China”. When the covid-19 pandemic wreaked havoc in supply chains and cargo-shipping markets, Chinese firms adapted fast and grabbed business from slower rivals, he notes. “China prefers stability, but when there is chaos they think opportunistically, not defensively.”

China needs no help to calculate its interests

Mr Zhou sees “a grain of truth” in such arguments. He notes that Chinese businesses are active in unstable regions of Africa and the Middle East where profits are hard to come by. Unlike Western companies that need quick returns, Chinese firms will endure hardships to grab market share, he suggests. The aim is to outlast competitors and reap rewards later. He draws a comparison with the Long March of 1934-35, when Red Army troops crossed snow-capped mountains, fast rivers and deadly marshes during China’s civil war, knowing that their foe, the larger, better-armed Nationalist army, would not follow them.

To a striking extent, today’s Chinese diplomats manoeuvre like Red Army guerrillas, warily avoiding crises that might trap and entangle China, while staging quick, showy wins. China is a superpower with global interests. But it is run by the same Communist Party that survived the Long March by picking battles and staging strategic retreats. Remember that history and China’s opportunism makes more sense.

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