Research

• Commentary
• publication date:2024/06/17

The International North–South Transport Corridor in the Context of the Middle East and Eurasia and the Belt and Road Initiative as “Great Power Diplomacy with Chinese Characteristics in the New Era”

MEIJ Commentary No.6

Emi Mifune,

Professor, Faculty of Law, Komazawa University

 

Introduction

In recent years, a reorganization of regional order has occurred, as part of which,^[1] China has continued to expand its influence and presence in several regions from Asia to Europe, including the Middle East (hereinafter designated as “Middle East and Eurasia”).^[2] Although China does not yet possess the power to affect Middle East security decisively, the conflict in Gaza from October 2023 has pushed the limits of diplomacy in the Middle East. Middle Eastern countries likely expect China not to play the role of “mediator” in regional security.^[3] Rather, the Middle East has become a useful means to exert diplomatic pressure on the United States.^[4]

Given this background, this study examines the reorganization of the regional order and the connectivity strategies spearheaded by major countries in the Middle East and Eurasia, with an attempt to interpret the shifts in China’s involvement in the Middle East from the perspective of a Japanese scholar specializing in modern Chinese foreign policy.

The paper is structured as follows. Section I introduces “Great Power Diplomacy with Chinese Characteristics in the New Era” and explains the implications of China for the Global South, which is positioned geopolitically as the “developing countries.” Section II explains the position of Middle East and Eurasia in the reorganization of the regional order. Section III follows China’s perspective on the Belt and Road Initiative and the International North-South Transport Corridor (INSTC) and the Chinese view of the Middle East and Eurasia in the Belt and Road Initiative. Finally, Section IV presents a summary and some formulated recommendations for Japanese diplomacy.

 

I. Implications of Developing Countries and the Global South in “Great Power Diplomacy with Chinese Characteristics in the New Era”

Many special terms exist in Chinese diplomacy. First, we review the key terms and phrases at the center of China’s diplomatic strategy for the Middle East and Eurasia.

 

(1) The Central Axis of China’s Middle East Diplomacy

The Chinese Communist Party (CPC) Central Conference on Work Relating to Foreign Affairs of the third term of the Xi Jinping administration was held on December 27–28, 2023. During this conference, Xi Jinping spoke of the “need to open up new vistas in major-country diplomacy with Chinese characteristics in the new era” and the “need to unite and rally most of the world on major issues concerning the direction of the world.”^[5] The position of the Middle East in this “New Era” of “Great Power Diplomacy” has become increasingly important, particularly in light of Sino-American competition.

This competition is occurring against the backdrop of China’s vigilance against the West. China perceives the West’s “de-risking” as nothing beyond a “decoupling” with a change in rhetoric.^[6]

The “New Era,” as Xi Jinping explained at the 2017 Party Congress, refers to the era when “China becomes a world power.” Xi Jinping stated, “an era for China to stand at the center of the world stage and make great contributions to mankind,” referring to “the era in which China will become a global power and stand at the center of the world stage.”

“Great Power Diplomacy” does not simply refer to diplomacy toward major powers such as the United States and European countries. According to the manual for Chinese diplomats, Great Powers are countries that exert influence on the world. Thereby “Great Power Diplomacy” refers to diplomacy through which China acts as a Great Power.^[7]

“Great Power Diplomacy with Chinese Characteristics” is important in multiple facets of significance. However, narrowing it down to the context announced by Xi Jinping and Wang Yi, the following three points are the most significant. [1] Adhering to the leadership of the CPC and striving to increase the number of countries and people who understand and agree with the social system and development path selected by China. [2] Working toward building a “new type of international relations” and a “community of shared future for mankind.” [3] Striving to create a favorable external environment for China’s domestic development based on its position as a developing country.

Consequently, “Great Power Diplomacy with Chinese Characteristics in the New Era” refers to diplomacy by which “China, the world’s second-largest economy,” creates a “sphere of friends = network” based on its position as a developing country, and builds a favorable external environment for China in an “era when China stands at the center of the world stage.” This is the central axis of the Chinese diplomatic strategy for the Middle East and Eurasia.

 

(2) Implications of the “Global South” and the Middle East in “Great Power Diplomacy with Chinese Characteristics in the New Era”

Xi Jinping, who has proposed the need to begin a new phase through “Great Power Diplomacy with Chinese Characteristics in the New Era” with these implications, has spoken of the need to “unite and rally most of the world.” It is this point for which the importance of the Middle East for China in “developing countries” and the “global south” comes into play.^[8]

The term “Asia Pacific” includes China. The term “Indo-Pacific” positions China geopolitically, and is used carefully with different implications. Similarly, the term “Global South” has been used by the West to position China geopolitically. The distinction between “developing countries” and “the Global South” is being addressed carefully. China became vigilant of Western “Global South Diplomacy” and began strategic assessments with China in mind, warily regarding events such as the “Voices of the Global South Summit” in January 2023 and the Hiroshima G7 Summit in May 2023.^[9] Furthermore, when the United States Senate Committee on Foreign Relations unanimously passed a bill to strip China of its status as a developing country on June 8, China’s mainstream media were strongly critical of the Western Global South diplomacy, claiming that Japan and the United States had drawn the concept of the Global South into a geopolitical game to strengthen their camp.

However, the tone of the debate changed over the summer. Wang Yi, a member of the Political Bureau of the CPC Central Committee and Director of the Office of the Central Commission for Foreign Affairs, attended the Meeting of the BRICS National Security Advisers and High Representatives on National Security held at Johannesburg, South Africa, on July 25, 2023, and stated, “China is naturally a member of the Global South and will always be a member of the big family of developing countries.”

Consequently, China positioned itself as a developing country and as part of the Global South, going on the offensive in its Global South diplomacy. China has adopted a strategy of strengthening relations with major countries in the Middle East, as described hereinafter.

 

II. “Middle East and Eurasia” in the China-led Connectivity Strategy and Reorganization of the Regional Order

(1) China's Strategy for the Middle East: “1+2+3” Cooperation Framework

After becoming the world’s largest importer of crude oil in 2013, the cornerstone of China’s strategy toward the Middle East has been the 1+2+3 Cooperation Framework, proposed by Xi Jinping in June 2014.^[10]

The “1+2+3 Cooperation Framework” refers to a framework in which conventional energy cooperation is the primary focus (=1), infrastructure development, trade, and investment facilitation are the “two priority areas” (=2), and the three major high-tech fields of nuclear power, space development, and new energy are the breakthroughs (=3).

This framework is not new from either a Chinese or the Middle Eastern perspective. However, for examination of the strengthening relations between China and the Middle East, which will affect global politics, it is important to review the implications of this policy in the context of reorganization of the regional order in the Middle East and Eurasia.

Neither infrastructure construction nor trade deserves the focus; rather, particular emphasis must be placed on the strengthening of cooperation and connectivity in the three major high-tech fields of nuclear power, space exploration, and new energy, positioned as the “3 = breakthroughs.” As proposed by Xi Jinping for the “1+2+3” Cooperation Framework, China and the Arab countries have raised the level of practical cooperation, established the “China-Arab States Technology Transfer Center,” jointly promoted the “peaceful use of Arab nuclear energy,” and deployed China’s satellite positioning system “Beidou” in Arab countries.

 

(2) Middle East and Eurasia and the Fourth and Fifth Island Chains

How does China position the Middle East region? One can examine that question in terms of the construction of military and civilian use “lines.”

Reports from the US military and think tanks have asserted that China, which assigns importance to securing maritime rights and interests in the open seas in major sea lanes worldwide, has been promoting the construction of ports and acquiring rights to operate them, with the intention of using them for both commercial and military purposes.

In addition to the first and second island chains, which are the lines of defense against China, references to the third, fourth, and fifth island chains by scholars and media have arisen in the United States, Australia, and Japan. The third island chain is the line of defense from south of Hawaii to New Zealand.^[11] The fourth island chain is the line from Gwadar, Pakistan, to Hambantota, Sri Lanka, and the Maldives. The fifth island chain extends from Djibouti in Africa to South Africa. The Middle East and Eurasia region lies among the fourth and fifth island chains.^[12]

Regarding investment in commercial ports, China has port rights scattered across Egypt, Saudi Arabia, the UAE, Iraq, Oman, and Israel. During the fall of 2021, while China was constructing a top-secret military facility at Khalifa Port in the UAE, the US applied diplomatic pressure on the UAE to halt Chinese construction in the UAE. The Washington Post reported in 2023 that China is planning to establish at least 5 military bases and 10 support bases outside the country by 2030.^[13] The UAE, Pakistan, and Sri Lanka were described in the context of the region among the fourth and the fifth island chain. These three countries have often been identified in recent public reports by the US Department of Defense as “possible countries” in which China is seeking to establish overseas military facilities.

According to the World Bank’s international debt statistics data, Pakistan is the country with the largest debt toward China among the Belt and Road Initiative countries. Sri Lanka is third, with almost the same amount as its national budgets.

 

(3) US–China Competition and the Significance of Expanding BRICS/SCO Functions by Including Middle Eastern Countries

Next, one can examine the Middle East region for China from the perspective of expanding peripheral diplomacy.

China has strengthened its relations with the Middle East using China’s “Belt and Road Initiative” to expand its sphere of influence, “BRICS” as a platform for cooperation between emerging and developing countries, and the Shanghai Cooperation Organization (SCO) as a regional security organization.

The Johannesburg Declaration at the 15th BRICS Summit, held a year and a half after the beginning of Russia’s war in Ukraine, was based on the two pillars of [1] expansion of the organization and [2] de-dollarization. Promotion of “de-dollarization” necessitates drawing in the major oil-producing countries of the Middle East. China intends to reduce its dependence on the dollar in global trade, increase payments in renminbi, avoid Western policies that can freeze trade settlement payments between China and Russia, and expand and strengthen the BRICS “correspondent banking” network and the BRICS Contingent Reserve Arrangement (CRA) by bringing in major oil-producing countries of the Middle East, which are crucially important for China's “functional expansion” of the SCO and BRICS.

China and Russia wish to create an alternative global financial system that is less dependent on the US dollar and which is less susceptible to Western sanctions. Moreover, they wish to expand the functions of BRICS and the SCO by including countries in the Middle East and Eurasia region as members and partner countries.

Until 2023, BRICS comprised five countries: Brazil, Russia, India, China, and South Africa. At the 15th BRICS Summit held in Johannesburg, South Africa, (August 22–24, 2023), it was announced that Argentina, Egypt, Ethiopia, Iran, Saudi Arabia, and the UAE would become members of BRICS in 2024 (*Argentina had decided to join the BRICS during the anti-US leftist Alberto Fernandez administration. However, on December 29, 2023, it announced that it would not be joining BRICS after Javier Milei won the election in fall and subsequently assumed office).

Saudi Arabian state television reported its membership in BRICS on January 1, 2024. However, on January 16, 2024, the Minister of Commerce, Majed Bin Abdullah Al Qasabi, during the Conference at Davos stated, “Saudi Arabia was invited to attend BRICS; we have not officially joined BRICS.” As of April 2024, Saudi Arabia has not yet joined BRICS. The Biden administration of the US has not officially exerted pressure on Saudi Arabia. However, talks between Saudi Crown Prince Mohammed bin Salman and US Senators from both parties for strengthening defense cooperation, which had been suspended since October 2023, resumed in early January 2024, which suggests that pressure was exerted by the US on Saudi Arabia. On January 1, 2024, Crown Prince Salman met with US Republican Senator Lindsey Graham (South Carolina) to exchange views on Saudi Arabia –U.S. relations, international and regional affairs, and common interests.^[14] Based on Senator Lindsey Graham’s earlier remarks, it is possible that he discussed with Crown Prince Salman the likely effects of Saudi Arabia’s BRICS membership on its relationship with the United States, including the potential conflict between Saudi Arabia’s pursuit of peace negotiations with Israel and the US-Saudi Arabia Defense Treaty and Saudi Arabia’s membership in BRICS.^[15]

Moreover, Iran formally joined the SCO in 2023, and Kuwait, Maldives, Myanmar, and the UAE signed memoranda of understanding granting them dialogue partner status. Talks were also held with Bahrain. The SCO has traditionally been a peripheral security organization to handle the three evils: separatism, religious extremism, and terrorism. Two important decisions were made at the 2023 Summit meeting: “Developing SCO activities” and “Developing mechanisms to respond to threats and challenges.” The “threats” referred to in this decision are the “three evils.” The “color revolutions” and “challenges” refer to the United States offensive. Consequently, “Developing mechanisms to respond to threats and challenges” here refers to security measures in western China and the expansion of the digital renminbi economic zone.

Expansion of transactions in renminbi is not simply designed as a challenge to US dollar hegemony. Although the Cross-Border Interbank Payment System (CIPS) using the renminbi as an alternative replacing the Society for Worldwide Interbank Financial Telecommunications (SWIFT) has limited scope, the share of Chinese renminbi in SWIFT crossed the Japanese Yen in 2021. Moreover, China is promoting currency diversity in emerging market countries along the Belt and Road routes. This initiative might be a matter of money flow. If CIPS’ sphere of influence spreads to the transmission of remittance information, which has relied to date on SWIFT, it can be linked to obtaining such remittance information as a response to the three evils and color revolutions.

 

(4) Effects of China’s Economic Slowdown and Decarbonization on the Middle East

Chinese influence is poised to become a key factor in analyzing the reorganization of the regional order in the Middle East because the stagnation of China's economy and the trend of decarbonization are expected to engender lower demand for fossil fuels.

A report by the International Energy Agency (IEA) released in the fall of 2023 predicted that if China’s annual GDP growth rate averages less than 4% until 2030, total energy demand will peak around the mid-2020s, following which, a steady expansion of clean energy will reduce overall fossil fuel demand and emissions. A 1% slowdown in China’s short-term growth would reduce coal demand in 2030 by an almost identical amount as past coal demand, oil imports will decline by 5%, and Liquefied Natural Gas (LNG) imports will decline by more than 20%, which will be expected to influence the global balance of energy remarkably. Furthermore, although China accounted for almost two-thirds of the global growth of demand for natural gas over the past decade, one-third of the demand growth for natural gas, and more than half for coal, China’s high growth is coming to an end; as China's economic growth slows, energy demand is expected to slow with it.^[16] At China’s National People’s Congress held in March 2024, the real GDP growth rate target for 2024 was set at “approximately 5%.” However, economists worldwide consider “approximately 5%” to be a difficult figure.

This trend provides reasons why the 1+2+3 Cooperation Framework was sought by the oil-producing countries in the Middle East as well as China. The slowdown of the economy and acceleration of decarbonization in China are beginning to exert strong effects on the structure of China–Middle East relations. The two megatrends of decarbonization and digital transformation (DX) are not separate challenges to be addressed. They are instead inextricably related, and will strongly affect security issues in the era of US-China competition.

 

III. The Belt and Road Initiative and the International North-South Transport Corridor (INSTC)

Although there have not been remarkable developments to the INSTC over the past two decades, the changing environments in Russia and Iran in recent years have led to gradual movement.^[17] The prolonged Ukraine war has led to the mention of the INSTC in the Japanese and American media (as of spring 2024, Chinese media, academic journals, and foreign affairs journals appear to have limited interest in the INSTC).

How does China view the INSTC?

China considers connectivity projects built by other countries along the Belt and Road Initiative as complementary to and usable by the Belt and Road Initiative. Nevertheless, India has positioned INSTC as a geopolitical countermeasure to the Belt and Road Initiative. Particularly, there is a view in China that India positions INSTC as a hedge against the China-Pakistan Economic Corridor (CPEC) of the Belt and Road Initiative. India also holds this geopolitical perspective. For example, Dr. Jagannath Panda, a world-renowned author, highlights the strategic importance of INSTC to India in bypassing Pakistan to provide Delhi with access to Central Asia and Afghanistan, as an effective countermeasure to the CPEC of the Belt and Road Initiative.^[18] The CPEC passes through the Pakistan-controlled part of Kashmir region, which both India and Pakistan claim. Although China has invited India to participate in the CPEC as well, the Indian side has criticized the CPEC for violating the sovereignty and territorial integrity of India. The Indian side has asserted that it cannot participate in the CPEC as long as it passes through the Pakistan-controlled regions of Kashmir.

China’s perspective on the INSTC includes these Indian opinions. Indian Prime Minister Narendra Modi stated at the 23rd SCO Summit in 2023 that Iran’s participation in the INSTC would help implement infrastructure projects such as the Chabahar Transport Corridor. He also stated that India is working actively to include the port of Chabahar in the INSTC. In response, China’s People’s Daily affiliated media outlets such as the Global Times reported that India is striving to “intercept” China at sea by bypassing the Pakistan-led land route.^[19]

Long Xingchun, a prominent Chinese expert on South Asia, recognizes that India’s construction of the INSTC has a subjective intention of competing with the Belt and Road Initiative, with which India does not wish to be aligned. However, Long Xingchun, observing that Iran, Russia, and Central Asian countries are willing to cooperate with China, notes the difficulty of India achieving its goal of not connecting the INSTC with the Belt and Road's CPEC.^[20]

Furthermore, from the Chinese perspective, although the Belt and Road Initiative is supported by large amounts of Chinese capital, the INSTC projects are largely funded by the INSTC member states. Therefore, they are not comparable in terms of sustainability.

Moreover, considering the issues the INSTC has faced since 2018, various challenges persist.^[21] Kang Jie, a scholar with the China Institute of International Studies, highlights the geopolitical risks confronting the INSTC: the Georgia–Armenia branch line has been affected by Russia–Georgia relations; the construction of a new railway between Armenia and Iran is facing financial difficulties; constraints have been imposed on the Iran–Azerbaijan railway and the Chabahar port because of the US sanctions on Iran; the situation in the South Caucasus includes the fragility of tensions between Azerbaijan and Armenia; and the issues of the Caspian Sea status and division of sovereignty have not been resolved.^[22]

However, considering Russia's voice and influence among members of the INSCT, the Chinese side is not as wary of the INSTC as India is of the CPEC. It need not be. The INSCT and the Belt and Road Initiative will eventually connect if the Ukraine issue persists.

 

IV. Conclusion: Recommendations for Japanese Diplomacy

Based on the discussion presented above, the following two recommendations can be made for Japanese diplomacy.

 

[1] Review the Overestimation of India in Global South Diplomacy

The ongoing conflict between Israel and Hamas since October 7, 2023 will not be resolved in the short term. The situation in the Middle East can be expected to remain tense. Therefore, the West should not limit its choices to India as the leader of the Global South.

In the immediate aftermath of the Israel-Palestine clash in October 2023 in Gaza, India’s Modi administration has voiced its support for Israel. The Hindu supremacy advocated by India’s ruling Bharatiya Janata Party (BJP) restricts Indian action. Considering the crucially important issues related to peace and security in the Middle East, Eurasia, and worldwide, the “Hindu supremacist India” should not be considered the sole choice to carry Global South diplomacy.

Furthermore, Indian diplomacy is opportunistic. Although India has moved closer to the US, it did not stand with the West over the Ukraine issue. China perceives this posture as demonstrating India’s wishes to remain in play both in the East and the West, and observes that India will seek to maintain a certain distance from the US.

To develop Global South diplomacy, India should not solely bear the responsibility of being the leader of the Global South. That responsibility should be borne jointly by three or four middle powers from the Arab, Christian, and Asian spheres, together with Japan and the West.

 

[2] Reconsider Japan’s Development Assistance Projects in the Context of “Countries along INSTC and Belt and Road Initiative Debt Trap”

China’s development of commercial ports, based on its aim to become a maritime power, is capable of supporting both for civilian and military purposes. Furthermore, Russia has a growing estimation of the INSTC as a southern route that is not subject to Western sanctions. Considering these developments, Japanese diplomacy, including economic assistance in South Asia and the Caucasus (particularly Azerbaijan) needs to be reconsidered.

Although some Japanese media have highlighted the “debt trap” of China as a failure of the “Belt and Road Initiative,” considering the Chinese side taking up the rights and interests of debtor countries, a second examination might engender the conclusion that the “debt trap” is “a success of China’s tactics.”

In light of those observations, Official Development Assistance (ODA) from Japan must be reviewed to ensure that it does not serve to advance Chinese aims, by comparing the principles and Western values in Japan’s development assistance policy with the key points that China aims. Furthermore, in the era of the US–China competition as well as the tug of war between the West against China and Russia, ODA projects should prioritize projects that engender local employment and which increase support for Japanese policies as well as responses to “digital impact operations,” rather than renewable energy and climate change projects. Decarbonization projects will ultimately only benefit the Chinese side.

 

Author’s Biography

Emi Mifune is a Professor, Faculty of Law, Komazawa University.

 

*This work was supported by JSPS KAKENHI Grant Number JP24K04762

 

*“MEIJ Commentary” is a timely commentary on current affairs by MEIJ research fellows and external committee members. It focuses on the restructuring of the regional order in the Middle East and great power-led connectivity strategies.

* Individual members of the MEIJ will receive e-mail updates, gain access to members-only reports, receive discounts for lectures and receptions, and free copies of the “Journal of Middle Eastern Studies” thrice a year. For more details, please click here.

 

 

＜ Previous Page | ↑