China Increasing Trade and its Influence in the Middle East

As #China finds itself with a growing population, there is a need for various goods from outside of the country. The Chinese leadership has found it important to address the need for trading partners by revitalizing its old Silk Road trade routes into the Middle East. In ancient times, these routes allowed for spices and goods to travel between Middle Eastern nations and China.

Today, those same routes are now moving more than just #economic benefits. They are becoming a way for China to extend its power and influence into the region. China is extending tendrils of soft power, from language and culture to its martial arts. The influence starts in a region known as #Ningxia, where a China-Arab State Expo is held. The expo is attended by Arab heads of state, but also high-level Chinese government officials, businessmen, and journalists.

There is nothing like this between China and #Europe or China and the United States. Chinese enterprises have a unique platform to create connections within the Middle East, both for their goods and to imports others. Part of these expos is the inking of deals that can impact the infrastructure of many of these countries, Egypt to Saudi Arabia.

Others point to the political ramifications for the region. Sworn enemies, such as #Iran and #Israel or Iran and #Saudi Arabia, are all doing business with the Chinese.

“China is trying to stabilize the situation by having a foot in every camp and not…playing politics but simply trade. If they stay on the trade links, they have some hope of dealing with it,” said Einar Tangen, a political analyst. He noted that China is building its energy security by working with both Iran and Saudi Arabia, essentially spreading the wealth through both companies.

Others see building a stable economy as a means to limit the spread of radicalism. “When people have hopes (and) jobs, they believe that they can have a decent life. That kind of belief or hope will keep them from radicalism,” said Li Goufu, director of the Centre for Middle East Studies at the China Institute of International Studies. He also noted that economic development provides hope to young people.

In Iran, that economic development is critical. Young Iranians are faced with an approximately 40% unemployment rate. Although they are graduating from higher education with degrees, many are finding that those pieces of paper mean little when it comes to finding work and caring for their families.

Economics in Iran is a tricky thing. The infrastructure has been left behind, making it hard for Iranian businesses to compete. Instead, they look to manufacturing outside of the country, including China, because it is more cost-effective. Thus, goods that are marketed as made in Iran, may actually have been made in China.

Beijing jumped on the opportunities available once the sanctions on Iran were lifted, due to the 2015 nuclear agreement. Both countries have agreed to increase bilateral trade to more than US$600 billion by 2026.

Increasing trade with China can impact not only larger companies, but the smaller businesses and manufacturers that create the chain of products and services from China to the Middle East. As part of its efforts, China is also spearheading multiple infrastructure projects throughout the region, creating a platform for increasing economic ties.

Part of the reality of #China’s increased influence is the move of Middle #Eastern individuals into China. As a result, there are new efforts by China to educate these individuals and their children on the Chinese language and culture. The point is to help individuals understand China, even as China spends money throughout the Middle East.

With all the potential benefits from this #economic boom, Iran is a country that must walk a fine line with China to avoid being left out of the Silk Road. Iranian President Hassan Rouhani has repeatedly pointed to the need to address the economic woes of his country, one of the key issues of the recent protests.

A recent rumor that China has banned investment in Iran was quickly addressed by the head of the Iran-China Joint Chamber of Commerce, Asadollah Asgaroladi, who pointed to the growing number of Chinese delegations visiting Iran to study investment opportunities. He also noted that banking obstacles are being addressed between the two countries.

Iran has hosted official visits from China and been willing to open their gates to investment from this Asian world power. On an international scale, this means that China could have more leverage with Iran than other countries, as their economic ties deepen.

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