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Taking Stock of China’s Diplomatic Surge in the Persian Gulf

Even just a few years ago, it would have stretched credulity to argue that China was a major diplomatic player in the Persian Gulf. Today, that is no longer the case as Beijing is fast becoming one of the key actors in the region.

China is now the largest energy buyer from Gulf countries, it was instrumental in the reconciliation between Saudi Arabia and Iran, and Beijing has become a forceful advocate for the Palestinian cause at the UN and other major international fora.

A new book, “A Dragon’s Odyssey: China’s Rise in the Gulf,” charts China’s trajectory in the Persian Gulf and how it’s become a major player in the region in a relatively short period of time. The book’s three authors, Zeno Leoni, Ahmed Aboudouh, and Carlotta Rinaudo, join Eric to discuss how China’s rise in the Gulf coincides with perceptions of a U.S. retreat.

Show Notes:

About Zeno Leoni, Ahmed Aboudouh, and Carlotta Rinaudo:

Zeno Leoni is a lecturer at the Department of Defense Studies at King’s College London. He is also an affiliate of the Lau China Institute of King’s College London. His current research focuses on U.S.-China relations within an evolving global context. His latest publication is A New Cold War: U.S.-China Relations in the 21st Century (Bristol University Press, 2024). Additionally, Leoni is writing a new book that explores the end of the post-Cold War order, the resurgence of bloc politics, and the escalating geopolitical competition between East and West. 

Ahmed Aboudouh is the Head of the China Studies Unit at the Emirates Policy Center and an Associate Fellow at the Chatham House, London. He is a foreign affairs, security, and geopolitics specialist focusing on China’s rising influence in the MENA region, US-China competition, and its worldwide implications. Ahmed is also a Non-Resident Fellow with the Atlantic Council in Washington, DC. He is a PhD candidate at the Defence Studies Department, King’s College, where his thesis focuses on the US-China competition in the Global South. He also holds a Master of Arts in International Relations from the Department of War Studies at King’s College London.

Carlotta Rinaudo is a researcher in the China Unit at the Institute of International Studies in Verona, focusing on analyzing China’s foreign policies. She frequently contributes articles to the news websites of France 24, Middle East Eye, the Italian magazine L’Espresso, and the Italian Global Voice network.  Holding a Master’s degree in International Affairs from King’s College London, she is currently pursuing a PhD at the same university, with a research focus on China’s Belt and Road Initiative.


Eric Olander: Hello, and welcome to another edition of the China Global South Podcast, a proud member of the Sinica Podcast Network. I’m Eric Olander in Ho Chi Minh City.

And just before we get into our show today, I want to give a huge thank you to Amit Jain and Que Boxi at the Nanyang Technological University in Singapore for being such gracious hosts to me last week and all of you guys who turned out on a Friday evening after work. That is admirable, to join me for what turned out to be a very lively discussion on China-Africa relations. So thank you, everybody, at Amit and the NTU team in Singapore, for such a wonderful, wonderful evening. Today, we’re going to dive into the Persian Gulf, and we’re going to head back to the Middle East.

 A couple of weeks ago, the China-Arab States Cooperation Forum wrapped up in Beijing. For those of you not familiar with this event, it’s been going on since 2004. It took a rather long break between 2011 and 2023. Like other events, the Chinese do this with Latin America, they also do with Africa. They brought together leaders from Bahrain, Tunisia, and the United Arab Emirates. In all, there were 22 delegations that attended the event. Got a lot of press. I wouldn’t say a lot of substance came out of it, but let’s take a listen to what Chinese President Xi Jinping had to say during his keynote address.

President Xi Jinping: We will strengthen cooperation in key areas such as oil, gas, trade, and infrastructure. Step up fostering new growth areas such as artificial intelligence, investment, financing, and new energy. And embark together on an innovative and green path to prosperity.

Eric: So, you heard the emphasis on energy, not surprising, in part because China now relies on the Persian Gulf for the largest share of its imported oil, nearly double what it gets from Russia. And the Persian Gulf has been one of the main reasons that the Chinese have moved out of Africa, where they used to source about a third of their oil. Now a lot of that comes from Saudi Arabia, the United Arab Emirates. Natural Gas coming from Qatar and other regions and other countries in that region. Let’s not forget Iran as well. The region is also becoming a major destination for Chinese investment, particularly from the private sector.

Just consider this, last year, Saudi Arabia alone attracted $16.8 billion in greenfield investment. And this year in 2024, major Chinese brands, including BYD, Huawei, Lenovo, and countless others have announced multi-billion-dollar investments in the Kingdom. And also don’t forget that the Kingdom was the largest recipient of belt and road financing last year as well. But China’s also emerging as a major geopolitical player in the region. Many of you will remember, back in March 2023, when then-foreign Minister Qin Gang brought together the foreign ministers from Iran and Saudi Arabia and brokered a détente between the two rivals. They had not had diplomatic relations for seven years.

They brought them back. This was a key part of bringing stability back to the region, of getting these two to talk to each other and to exchange embassies and to reestablish diplomatic ties. Here we are more than a year later and that détente is still holding. Its strained, but it’s holding. And the Chinese are also trying to play a role in the ongoing Israeli Palestinian crisis. Now, even though Israel China relations are souring and they’re going from bad to worse, in part because of China’s response to October 7th, and there’s really no prospect that Beijing is going to play any role in any future Israel-Palestinian settlement if that ever comes about.

But the Chinese still think that they can contribute by bringing together the rival Palestinian factions. So back in April, the Chinese invited representatives from both Fatah, which is the political party that governs the West Bank, and Hamas that oversees Gaza. Now, not sure what actually came out of those talks, but just the fact that the Chinese were able to bring these two rivals together, and it kind of fosters some type of hope because if there is going to be any prospect of a two-state solution, then it’s going to require some form of Palestinian reconciliation. And that’s where the Chinese see that they’re playing a role.

And the Palestinian issue obviously resonates far beyond Israel and the occupied territories. And China has fully aligned its foreign policy with the Palestinian cause, which, of course, has garnered enormous goodwill with countries throughout the Arab world in the Persian Gulf. But all of this is such a new phenomenon. I mean, we wouldn’t have had this show three years ago, maybe even two years ago. But the Chinese have just accelerated their diplomatic engagement with everybody in the region. And the scale of that engagement has just skyrocketed. And events seem to be moving so much faster than many of us can keep up with. So that’s why it’s important for us occasionally to do what we’re going to do today — step back and try and figure out what’s going on.

There’s a new book out to help us do that, A Dragon’s Odyssey: China’s Rise in the Gulf, and it was written by three scholars who I’m just so thrilled to have the chance to speak today. So Ahmed Aboudouh is an associate fellow with the Chatham House Middle East and North Africa program. He also heads the China Studies Research Unit at the Emirates Policy Center in Abu Dhabi. Zeno Leoni is a lecturer at the Department of Defense Studies at King’s College in London. And Carlotta Rinaudo is a researcher in the China unit at the Institute of International Studies in Verona. So glad to have you all with us. Congratulations on the new book.

Ahmed Aboudouh: Thank you so much, Eric. It is very, very great to be with you.

Zeno Leoni: Thank you, Eric. It’s a pleasure to be here with you all.

Carlotta Rinaudo: Thank you for having us, Eric.

Eric: Well, it’s great to have you here. Again, congratulations on the book. The timing of this book couldn’t have been better given everything that’s going on. Ahmed, let’s start with you and help us understand what the motivation was to write the book. Clearly, you guys had the idea to do this kind of book long before so many of these events that we’ve seen over the past six, nine months have happened. And it seems to me that this is a very difficult book to write in a moment like this when the risk of it being outdated is quite high. So, how do you approach a topic like this that is changing so fast?

Ahmed: As you said, Eric, it was a challenge. We decided to write this book way before October 7. We were working on the book in the months before that. That was before even Mahmoud Abbas’s visit to Beijing, President Xi Jinping’s expressing China’s willingness to play a role in the Israeli-Palestinian conflict. Everything was quiet, it was kind of predictable. It was following President Xi Jinping’s landmark visit to Saudi Arabia. So, we knew, or we had an idea about what are the contours of the book, the main highlights, and what are the issues we’re going to focus on. But then everything turned upside down on October 7 when we had already done significant work on many chapters of the book.

But then one of the reasons why this book took longer than expected was all that the transformation at the conflict level and regional level, and, of course, China’s offensive that was connected directly to the conflict, whether that is against Israel or the U.S. standing in the region, that actually delayed our work for few months more because we needed to update all the chapters. Not only one or two, believe me, all the chapters have been updated and edited to incorporate these developments. So, you are right, the risk was high of this book being outdated, but in the end, we managed to say the important things that we think China focuses on when it comes to all these very fast developments.

Eric: Well, Zeno, before we get into some of the issues that China focuses on, let’s talk a little bit about October 7th. How did October 7th change China’s relationship with the Persian Gulf and, of course, in the Arab-Palestinian cause?

Zeno: First of all, let me say that, well, I don’t think it has dramatically changed. I think China’s posture towards the region remains constant in continuity. And in that is a posture that involves growing engagement for… and this will continue to be like this in the long term. And from my personal perspective for a very crucial reason, aside from all the economic opportunities that China finds in the region, and that in the first part of the book we discuss, but I think there is a grand strategic logic. China is becoming a great power, although with a lot of limits, and it wants to be more and more influential in international affairs. Although there is a big question mark about to what extent China is influential. And I would like to get back to this point later on. And so China, what is missing is partnerships or alliances.

China doesn’t do formal alliances anyway, but China needs to make friends. And if we can make a parallel with the U.S. hegemony, with U.S. strategy since the end of World War II, it’s alliances that Ali enables U.S. power all over the world. China doesn’t have that. And I think it has found, and it continues to have in the Gulf especially and more broadly in the Middle East, potentially very important friends. I often say that the relationship with the U.S. and China is a marriage of convenience. But the relationship between China and the Gulf, for many reasons, seems a perfect marriage. So, they really get along well together, and perhaps even more so after October 7th.

Eric: Now this perfect marriage, and I’d like to dive into that in part because there’s a lot of talk about how the United States is disengaging from the Persian Gulf, and you even mentioned this in the book as well, and that China is seeing this as an opening. But I think a lot of Americans in the State Department and in policymaking circles would strenuously disagree with that assessment. That on a security basis, the posture of the United States in the Persian Gulf, as far as I know, and I think what they’ve said has not actually diminished. U.S. Economic engagement remains rather robust. But more importantly, the relationships that the United States has with the Saudis and many other players in the region date back a century. These are deep relationships. The United States and these countries have long-standing relationships and the Chinese are relatively new in this. And as Zeno pointed out, they don’t have the alliances and they don’t have these deep relationships the same way that the United States does. So, how can we call this a perfect marriage if they’ve really just kind of met?

Carlotta: Basically when we say that the U.S. is engaging from the region, we also need to look at the numbers. So, when we talk about the economic relations between China and the Gulf, sometimes the [inaudible 0:11:38] point is a bit inflated and maybe get overexcited in the sense that yes, there is an economic engagement, it’s acquiring more quality, it’s becoming deeper, and it’s there to stay. But then, at the same time, when we look at the number, China will not be the most prominent actor, economic actor in the region. If we look, for example, at the Gulf Sovereign Wealth Fund, and that’s a very good indicator to understand where the money is flowing, we will still see that the biggest investors in the Gulf are Western actors. For example, I look at ADIA, the Abu Dhabi Investment Authority, it’s a sovereign wealth fund in the UAE. And if you look at that, you will see that North America is still getting 45 to 60% of the UAE investments.

And then if we look at Europe, it is getting from 20 to 30%. And then if we look at emerging markets where China is located, then that’s only from 10 to 20%. And then, at the same time, if you look at the other way around, the Western world is still the biggest investor in the UAE economy. So, this is just to put things into perspective. There is an economic relations that is growing, and, again, this is there to stay because there are so many complementarities between these economies as Zeno was saying, but then it’s a new relationship. It’s in the early phase. So the Western world is still very important in this region economically speaking. The reason why we can say that this is a perfect marriage is because China and the Gulf really need each other. It started as an energy trade relation, mostly based on oil and gas trade because obviously China [inaudible 0:13:08] opening to the outside world really needed hydrocarbons to expand its industrial capacity.

But then today this became more complex, more sophisticated, especially after the Belt and Road was launched. Because you have China that is the region as geographically very important to expand its trade capacity. But then you also have the Gulf with its visions. The visions are these five to 10-year plans through which the Gulf hopes to transition away from an oil-based economy to an economy that is more oriented toward tourism, trade, or technology, food security. And so it is very important when you have China coming to the region with physical but also digital infrastructure. Because if you want to expand your industry into tourism, let’s say, then it’s really important to have new railway lines spots, new bridges. I’m just looking, for example, at this new high-speed train that is going from Jeddah to Mecca, Medina. And that’s very important for Saudi Arabia.

It was built by Chinese company. And for Saudi Arabia it’s very important because that’s significantly reducing the travel time from Jeddah to Saudi Arabia religious sites. And so that’s making tourism easier. That’s making tourism to the region more attractive. And that’s very important for Saudi Arabia. So I agree with Zeno, this is the perfect marriage in a way, but it’s a very new one. It’s still in its nascent phase.

Eric: And of course, when we talk about all this infrastructure, this is unlike other parts of the world that rely on Chinese loans to build this infrastructure. In the Gulf, they don’t need Chinese money. So this is Chinese contractors and Chinese technology, but it’s financed by each of the government. Zeno, before we go on, and Ahmed, I want to get back to you very quickly. Again, on this perfect marriage thing, it seems like right now, yes, everything lines up perfectly in the sense that China needs energy. The Gulf has lots of energy. Europe is buying less energy because it’s moving into kind of a post fossil fuel phase.

But China too wants to move into a post-carbon phase. What does the world look like in 20 years when China is moving to electrify its industry and its transportation and its economy faster than almost any other country in the world? Maybe it doesn’t need that energy anymore from the Persian Gulf that it gets so much from today. What does the relationship look like down the road in this new era that China itself is pioneering?

Ahmed: This is a very interesting question and I think the short answer is in my view, a lot of Chinese officials don’t believe that energy transformation China’s going through will mean necessarily a complete phase out of oil and gas in the trajectory of fueling the future of the Chinese economy. So by that virtue, I think Gulf countries will remain very, very important strategically for China. The second component here is that Chinese leadership, I think, still think that the possibility to move on Taiwan is there. And if that happens before this energy transformation happens, I think the Gulf countries will prove that they are very, very strategically important together with other countries like Russia, for example.

So, the uncertainty about the future of the geopolitics in South China Sea and the Indo-Pacific, combined with the uncertainties around the Chinese economy with the downturn now we are seeing in the property sector in unsustainable debt in the declining domestic demand in China make the calculations of Chinese leadership still being focused on fueling their economy with traditional forms of energy until this insufficient renewable energy sources are up and running enough to wire the whole economy in China. Another factor is that I agree with Carlotta that Western investments are very important in the Gulf and sometimes eclipse the Chinese economic interests. But at the same time, Gulf countries complain sometimes that the willingness, the political and the willingness of corporations in the West sometimes is not there to fuel this transformation to the future. And here, I’m talking specifically about clean energy. If you look at European companies, for example, you will see EDF, a French company, as leading this European inroads into helping the Gulf economies to transform and transition.

But you don’t see much when it comes to the input from other EU and American companies helping these countries. On the other hand, you’ll see a huge focus from Chinese counterparts in expanding their operations in the Gulf and helping genuinely these governments implement their economic diversification visions 2030, 2035, and so on. So if the West is willing more to give those countries what they want, I think we could see some shift in the focus when it comes to economic diversification. And we can use the example of AI as a linchpin in this comparison. We have seen the UAE shifting its corporation and divesting from partnerships with China towards signing deals with Microsoft. And you guys published a very interesting piece on the AI minister and the UAE saying that our future focus will be with in partnership with the U.S.

These are very important examples that we can use to measure partnerships between the Gulf countries versus the U.S., EU on one side and China on the other side, and many other sectors.

Eric: So, Ahmed, listening to Zeno, there’s something that just confuses me here. So when you look at the top 10 suppliers of energy to China, six out of the 10 come from the Gulf. And that feels like a heavy concentration in a highly volatile security environment. And unlike Russian oil that can pass through a pipeline, oil and energy that comes from the Gulf to China has to pass through waterways that can be easily disrupted, intercepted, or blocked by the United States in the event of a conflict in Taiwan and that if there’s sanctions or they want to stress the Chinese energy supply. And the lesson coming out of Europe from the war in Ukraine was that the Europeans, particularly the Germans, relied way too heavily on Russia for their energy.

It feels to me that when six out of 10 of Euro energy suppliers are coming from one region, that can be disrupted by a rival. That feels pretty high risk. What is the security assessment, in your view, of this new reliance on Persian Gulf energy?

Ahmed: I think it’s simple. The Chinese don’t have an alternative apart from Russia. And the same logic can go with the over-reliance on Russia oil. That China doesn’t want to put its egg in one basket, whether that is the Gulf, African suppliers, or even Russia. But in the end, you can’t find another partner willing to provide China with the amount of oil it needs and gas it needs to recalibrate and restructure the economy inside China apart from the Gulf. There’s no other country with the capabilities and the political will to do that apart from the Gulf and Russia. So, I think there is a bipolarity here when it comes to energy supplies to China, and I think this is one of the major weaknesses, strategic weaknesses in the national security of China that they talked about many times the Malacca Strait issue, dilemma, and so on and so forth.

At the same time, I think from the Gulf perspective, it is not only about China. The oil, as you rightly pointed out, oil and gas will continue to flow to Asia. China obviously is the biggest customer as you pointed out. But in the end, in the Taiwan contingency, I don’t see the U.S. blocking oil and gas imports to Asia in general, I see a recalibration of these exports from the Gulf to serve the economies of the U.S. allies such as Australia, Japan, South Korea, and ASEAN countries in general. Because in the peak of escalation, these economies or the dependence of these economies will also escalate on Gulf oil flows. So, for the Gulf region, Asia, in general, is a win anyway.

They have to look at Asia and they have to double down on their partnerships in Asia. This explains why these partnerships have been intensifying from the Gulf perspective, not only with China but also focusing on these countries I mentioned before. And the last visit was Emirati President Sheikh Mohammed bin Zayed Al Nahyan was in South Korea before he headed to attend the China-Arab Corporation Forum. That tells us a lot about the focus that for them it’s not a zero sum game, it’s not U.S.-China. It’s a diversification that serves their own economic diversification and energy transition in the future.

Zeno: I think China indicated at the COP26 in Glasgow, a couple of years ago, that before they meet the targets of the global agenda on the green economy and decarbonization and climate change, we will get to 2070. So, when we think about China’s relationship with traditional energy consumption, so we’re talking very much long-term. And this is also because they will struggle to adapt their developing economy to a green economy, so to a more modern economy. That’s a challenge there. And yes, just one minor point, I think the logic of the BRI is about escaping the trap that Ahmed described. Perhaps it’s challenging is not that easy, not that simple to organize transport of oil across the Eurasian landmass, across sovereign states as well. It’s easier to do this and cheaper as well to do this at sea, although then with all the security challenges that Ahmed described.

Eric: Yeah. So I’m glad you brought up the BRI. Carlotta, can you talk us through the role that the Persian Gulf plays in the BRI? And in fact, there was just news that came out this week that Rock is now considering joining the BRI and linking its development road initiative, which is a trade route that connects to Turkey together with the Belt and Road. So a lot of talk about the Belt and Road in the Persian Gulf, it’s increasingly an important region. Give us an overview of the lay of the land in terms of the BRI in the Persian Gulf.

Carlotta: So, the way China looks at the region in terms of the BRI, it sees the Gulf and the wider region as an entry point. It’s a point of access for Chinese goods. Let’s look again at the UAE. Probably I would say it’s often called a magnet for investments because it’s usually one of the countries where China invests the most in the Gulf. So the UAE is where most of the Chinese goods are then redistributed to the wider Middle East. And so what is the logic here of coming and build new infrastructure? China will come and build a new project like the Etihad Rail for one simple reason. This is a railway line that is going from the east side of the country of the UAE to the west side of the country. And so you build this sort of infrastructure because it’s easier than for you to circulate Chinese goods in the Gulf and in the wider in the east.

And then it also sees the Gulf not only as an entry point for Chinese goods like electronics and smaller components, it’s also a place where it wants to sell electronic vehicles. This is also part of the energy transition. So, China knows that because of its overcapacity in electric vehicles, it needs some entry points like the Gulf where it can start to make its vehicles more international. And the Gulf is perfect for that because that’s also in the Gulf agenda to diversify. They want to increase the public use of electric vehicles by sixfold in the next year. So, by 2030, if I’m not mistaken. So now, for example, if you go out in Abu Dhabi, the chance that you’re calling an Uber and you will see a Chinese electric vehicle showing up to pick you up, it’s very likely. And so this is again a point of convergence where you see the area, not just as an access for infrastructure, physical and digital infrastructures, but also for electric vehicles and electric components.

Ahmed: I think it’s very important also to understand the recalibration that China is undertaking now when it comes to the BRI from the headline catching a huge project that dominated the BRI until 2016 to the BRI 2.0, that is focusing, as Carlotta rightly said, on digital infrastructure, on green energy, and also in debt sustainability. And this is very important because Gulf countries can fuel this expansion in China’s vision for the energy transition all over the world and take its right place, as Chinese scholars would like to say, in the world when it comes to take and future energy without having to bear the risks of the bubbles which color the relationship between China and some poorer countries in Africa and also the Middle East. So, I think the, the Gulf, in addition to its strategic location and also its trade deals, especially with big markets like the EU and the U.S., it also provides China the opportunity to avoid any high risks that these projects don’t actually get the return on investment that has been planned.

Eric: Yeah, Zeno, the points that we’ve just been hearing about the BRI also speak to this hierarchy of relationships that China has in the region. And I think there’s a big misunderstanding oftentimes by outsiders who don’t know the region, where they treat all the countries the same. But clearly, when we see the levels of investment going to the Emirates and then obviously to Saudi Arabia, it’s very different than Iran. Can you maybe map out for us what countries are more important to China and maybe ones that quite aren’t as a big a priority for them for different reasons?

Zeno: Well, I think for obvious reasons, for the reasons that have been discussed so far, especially by Carlotta, it’s clear that it’s not surprising that the UAE and Saudi Arabia are up there in China’s priorities due to financial interest, economic interest. And clearly, China is at pain with having to choose, and not only in the region, China is at pain with having to choose or with taking the lead or exposing itself to a certain extent over many other international controversies and issues. But I wouldn’t rule out completely, not that your question implies that, but I wouldn’t rule out the importance of the relationship with Iran, not just because recently there was a security agreement achieved between China and Iran, but also because the international order is transitioning towards, in a recent article I called the return of geopolitical blocs.

And China, especially after the war in Ukraine, has lost a lot of opportunity, probably in the short term, every opportunity to be a friend with the West, especially with Europe, which for me, in my opinion, would be the big price for China in the long term. And so in this, the global realignment and redivision in geopolitical blocs, clearly Iran, from a political perspective as opposed to the economic perspective of the UAE or Saudi Arabia, for example, Iran might play an important role, might become a close partner of China. But nonetheless, if you ask me what was the hierarchy nowadays, Iran will come after Saudi Arabia and the UAE in the very short term.

Carlotta: I think it’s symptomatic also if you look at one of the recent episodes we had in this context. So, when we ask ourselves, is there a hierarchy and is Iran less or more important than the UAE and Saudi Arabia? I think a small example is the fact that quite recently there are some islands that are in a dispute between the UAE and Iran since 1971. They are claimed by both, but at the moment they’re under Iran. And you have China supporting the UAE perspective, that [inaudible 0:29:38] actually belong to the UAE. And so I think this is just symptomatic of the fact that when it comes to a dispute like this, although it is really true that China would prefer not to take sides, but then in this case, it’s supporting the UAE.

And then if you look at [inaudible 0:29:52], you have way more Chinese nationals living in the UAE compared to Iran, and you have higher volumes of trades with the UAE than with Iran. So, when it comes to choosing or supporting one perspective over another, you see China taking the UAE side.

Eric: Yeah, and we saw the tensions flare, Carlotta, as you pointed out, over this island issue just in the past couple of weeks. It also flared up a few months ago as well. There’ve been mounting frustrations in Iran over the fact that the huge quantities of investment that were promised under this, remember this $400 billion agreement that they signed has not materialized in part because a lot of Chinese companies are concerned about being exposed to U.S. and European sanctions. So I get a sense that there’s a frustration in Iran that that the economic side of this relationship isn’t working quite as they might have hoped. Ahmed, what’s your take on that?

Ahmed: I think it’s a complicated relationship as Zeno and Carlotta rightly pointed out. I think the main catalyst for China’s approach to the Gulf is showing neutrality between Gulf countries, Arab Gulf countries and Iran. But when you dive deeper, you’ll see that there is a hierarchy, and that’s obviously the Arab Gulf countries above Iran. But the complication comes not only when it comes to investments. You are right, if we take an example, the famous example of signing an agreement with Iran in March 2021, which is called the Comprehensive Strategic Partnership, China invested only $185 million as per the economy minister Iran. That is 21 industrial projects and two mining projects and one service projects. That’s very, very minimal. But at the same time, from March 2021 until now, I compiled some data that showed the total agreements between China and five Arab Gulf countries, both investment and construction contracts hit $26 billion.

So that tells you the level of disparity between China’s partnership with Iran and Gulf Arab countries, which heightens, by nature, the concerns in Iran about the partnership with China in the long term, which also in turn reduces China’s ability to pressure Iran to take any major decisions or to adopt shifts in its strategic posture when it comes to huge issues like the Gaza War or escalation with Israel in in the region. And here I disagree with U.S. administration’s pressure on China to step in and to convince the Houthis and Iran to scale down their attacks. I don’t think China has the ability to do that or the influence based on these dynamics that I mentioned here.

Another factor actually is, although, on the surface, Iran plays a very important role or provides China with an opportunity to pressure the U.S. position in the Gulf and the Middle East in general by adopting these revisionist policies towards American deployment of troops in the Gulf or Israeli policies and normalization between Saudi Arabia and Israel, I think China can’t make these preferences available in public less antagonizing Gulf countries. At the same time from the other side, Gulf countries understand these dynamics. And one of the interesting things I hear a lot in the Gulf is that they would like to deepen their ties with China to balance their China-Iran relationship.

So keeping China as close as possible to Gulf countries, not to thwart any possibility in the future that the relationship between China and Iran would exceed this partnership they have with China. So, there is a tripartite game here going on, which makes it very difficult for China to find its steps in these regional rivalries between them, which was very obvious in China taking the side of the UAE during Xi Jinping’s visit to Saudi Arabia on the three Islands issue.

Eric: Well, I’d like to close our discussion by kind of stepping back from all the ground that we’ve covered in the past 40 minutes in our talk today and to reflect on what do you want people to take away from the book or what’s the key message if the book doesn’t fulfill that, given how fast things are changing, that you think people should know about and understand when it comes to the China Gulf relationship?

Zeno: I will draw from especially the part of the book that I’ve taken more care of more closely. First of all, two things I would like the audience to take away from this and from the book. As we said at the start, first of all, nobody or very few people followed Middle East, China, Gulf relations until a few years ago. But actually I would like to emphasize that the Gulf has been absolutely pivotal, and its relationship with the U.S. has been pivotal to the international order since the end of World War II. And so I expect this relationship between the Gulf and China potentially to be pivotal to the future of the international order for the next few decades. And that’s why I think this is a very, very important topic. The other point very briefly, before handing it to Ahmed and Carlotta, I think the regional order is increasingly mirroring the changing international order, global order, which is an order that is becoming more and more multipolar with different players becoming more relevant — China, Russia, not just the United States.

And also with the Gulf countries, somehow playing out these strategies of multi-alignment which are increasingly relevant to understanding how the global south is behaving, approaching this world order transition. And I’ll leave it there.

Carlotta: Yeah, as Zeno was saying, this is a relation that was mostly overlooked, I will say, in the past. And as you said before, this is probably a book that we will not have seen a few years ago. But I believe this is our nation that we need to keep in check and we need to look at for the future because we are talking about two major drivers of the global economy, China and the Gulf. These are very business oriented economy and they alone represent 22% of the global GDP. So, I believe a mistake we should not make is not to look at how this relation is evolving over time. And another point I would like to make, just to reinforce what I said before, this is not a relation about hydrocarbon only, it’s a relation that, with time, will gain more and more sophistication and more and more quality in terms of clean investments, in terms of AI, in terms of technology.

And I also will say that we should have a look at how this relation is evolving abroad because what we have seen recently is that you also have China and Gulf countries collaborating outside, collaborating abroad also in renewable energy. Just recently, there was a very interesting piece of news regarding joint collaboration in Uzbekistan, where you have ACWA Power, one of the major power developers in Saudi Arabia, developing wind power plant in Uzbekistan. And to do so, it’s collaborating with Chinese companies in terms of installation of turbines and the construction of [inaudible 0:36:59]. And then also you have the Silk Road fund investing ACWA Power. So they’re doing this also to go abroad and start to build for themselves a more prominent role in the global south. And I think this is also very-

Eric: Ahmed, I’m going to give you the last word.

Ahmed: I think there are a few points I would like to make here. First of all, it is very, very clear now that the Middle East is turning into a strategic competition arena, whether we like it or not, as Carlotta said, China’s priority and the Mena country’s priority in terms of the relationship with China is, is expanding their economic cooperation and technological cooperation in the long term. And they see selective compatibility in that both are going through economic restructuring of their national economies and they want to make this alignment between the two processes for the benefit of both sides. But at the same time, it is now very clear that China wants to undermine the United States’ strategic standing in the Middle East that has underpinned regional security since World War II, and wants to do that incrementally through partnerships with Gulf countries, especially.

That said, we can see in the patterns of relationship that China clearly sees its concentration of influence being in the Gulf. We saw during the China-Arab Cooperation Forum the signing of comprehensive strategic partnership agreement with Bahrain, which left everybody bewildered. But obviously, the only explanation is China wants to concentrate its focus in the Middle East in the Gulf. The second point is MENA countries don’t see this partnership from a zero sum game perspective. They don’t see China being an alternative security provider in the region anytime soon, and they’re not expected to reduce the intensity of their security partnership with the U.S. In fact, they want to increase it. And we could see that in the negotiations now between Saudi Arabia and the U.S. on a defense pact. So, Middle Eastern countries are not naive when it comes to understanding China’s true intentions in the region, and they don’t want to antagonize the United States, especially on security and high-tech spheres.

The last point I wanted to make is these dynamics leave us with two camps in the region. China wanting to build a coalition of Arab and Islamic countries by siding with them on the issues they are really interested in and align with their interests, especially Gaza. And at the same time, the United States having this vision in the region built on a normalization deal between Saudi Arabia and Israel that allows us to build a new security paradigm in the region and make it more able to focus on transition in the Indo-Pacific. But China’s influence has limits, and I think these limits are very obvious since October 7th. It had made some inroads and successes since October 7th, and even before that, since signing the deal between Saudi Arabia and Iran in March 2023. But October 7th and Gaza war showed us that the United States is still the main player in the region and that China’s influence is connected directly to U.S. actions.

For example, if the United States aligns with Netanyahu’s government’s practices in Gaza, that would give the space for China to heighten its criticism of the United States. But since March, when there is a divergence in views between Washington and Tel Aviv, we saw a change in this space of China’s ability to castigate the United States. And we could see the United States as making a comeback in the region when it comes to military, diplomatic, and normative influence as well. We saw more engagement by Secretary Blinken yesterday in the humanitarian summit. We saw dedication, $400 million humanitarian aid to Gaza. And we saw, most importantly, an emphasis in Washington on ceasefire in Gaza, which marked a shift that undermined China’s ability to use this to criticize the United States.

So to sum up, the United States will always be the main preferred partner for MENA countries. China comes next, but that does not mean that intensifying security partnership with the U.S. is throwing their partnership with China out of the window. That’s not going to happen. As Carlotta said, this is strategic. This will remain the focus of MENA countries, but, as I said, selective compatibility, selective sectors that don’t jeopardize their relationship and interest with the U.S.

Eric: The book is A Dragon’s Odyssey: China’s Rise in the Gulf. Ahmed, if people want to buy it, where can they go to get it? Is it available?

Ahmed: It is available on the website, Neelwafurat. They can always order it from this website, and there are plans now to expand on other platforms as well.

Eric: Wonderful. Well, I will put a link to the book in the show notes. This is absolutely essential reading. Thank you all three of you for joining me today. Ahmed Aboudouh is an associate fellow with Chatham House Middle East and North Africa program. He also heads the China Studies Research Unit at the Emirates Policy Center in Abu Dhabi. Zeno Leoni is a lecturer at the Department of Defense Studies at King’s College London. And Carlotta Rinaudo is a researcher in the China unit at the Institute of International Studies in Verona, Italy. Carlotta, Zeno, and Ahmed, thank you so much for taking the time to join us. I really appreciate it.

Ahmed: Thank you, Eric, for having us. It was a pleasure.

Eric: And I’ll be back again next week with Cobus for another edition of the China Global South Podcast. Until then, thank you so much for listening.

Outro: The discussion continues online. Follow the China Global South Project on Twitter @ChinaGSProject and share your thoughts on today’s show, or head over to our website at where you can subscribe to receive full access to more than 5,000 articles and podcasts. Once again, that’s

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