The recent China-Gulf Cooperation Council (GCC) Summit in Riyadh denoted a significant moment in bilateral relations. The two respective parties agreed upon a joint declaration and broad delineation of next steps for furthering strategic engagement – across areas including finance, investment, energy, and technology. Nearly $30 billion worth of trade deals and specific policies concerning BRI expansion within the region were unveiled throughout the summit – with more to follow.
The temptation for some commentators here, of course, is to thus conclude that GCC states are shifting ever-closer to China. Some have even hypothesized that in an increasingly multipolar world order, GCC would emerge as a pole that gravitates away from the proverbial West – and takes the side of China on crucial questions of geostrategic importance. The following article presents two claims: 1) that in the short- to medium-term, the GCC will indeed seek a rapid deepening of ties and relations with China that are perceptually significant and drastic; and yet, 2) fundamentally, GCC states are unlikely to choose between China and America – the default tendency remains, at least as of yet, to engage strategically with both parties, and pivot or reorient based on the willingness of each respective party to acknowledge the disparate yet dynamically autonomous interests of the various states within the council.
Prior to delving into the first point, we should recognize that the GCC is not a monolithic entity. Whilst Saudi Arabia and Qatar seem to have settled for peace at the 41st GCC summit two years ago, relations remain tense over the conflicting foreign policy objectives between the two countries, such as Qatar’s relations with Iran. The civil strife in Yemen has cast shadows over territorial intactness and skirmishes between UAE and Oman, who view the border disputes as a matter of national pride. China or America alike would be mistaken in thinking that they could treat GCC states’ interests as homogenous and wholly aligned. For one, China and Qatar share much deeper strategic sympathies with Iran than Saudi Arabia; for another, oil and gas production occupy a very significant proportion (40%) of the respective GDPs of most GCC states, apart from UAE and Bahrain. Therefore, when speaking of GCC, we must be wary of assuming that they would move as one.
The impetus for closer ties between China and GCC in the next five years remains clear. From doubling down on trade and investment in coincidence with China’s reopening, to facilitating exchange and collaboration across renewable technologies and energies (in which China has a productivity and research lead), to deepening biotechnology and other forms of innovation-driven research that draws upon the relatively affordable production costs in China and the intense human capital and facilities in the GCC, there exists a plethora of opportunities for comparative advantages to be pooled to serve both parties. In particular, the fostering of such ties is likely to take on a newfound, geo-strategic importance for two additional reasons.
Firstly, the West’s ongoing war with Russia has demonstrated to the GCC that purely relying upon energy transactions with the West could have deeply perverse consequences when it comes to geopolitical autonomy; diversifying away from purely Western consumers – and deepening energy ties with China – makes a lot of sense to regional governments who are seeking to develop a foreign policy independent of American influence and arbitration. Secondly, Chinese businesses, investors, high-net-worth individuals and their family offices are on the look-out for a secure site for wealth preservation, amidst an increasingly fractious global geopolitical environment, where their assets and property could be immune from the long arm of global sanctions. An influx of Chinese capital qua investment is thus to be expected over the coming years.
More fundamentally, GCC states would benefit from greater proximity to China as a bargaining chip vis-à-vis the proverbial West. From pressures applied on them concerning ‘human rights issues,’ to broader tensions over OPEC+ oil production, there exists a number of flashpoints and areas of contention between the U.S. and GCC states. Whilst it is unlikely that GCC states detach themselves entirely from engagement and collaboration with American counterparts, the rise of China as a wedge between Washington and the region is likely to be welcome by regional players as a source of leverage and implicit pressure on the U.S. to reconsider its demanding and unilateralist, even interventionist approach to regional affairs.
Yet the above must not be construed for reasons by which the GCC would thus settle for an alliance with China. Countries in the region – especially Saudi Arabia – remain wary of China’s long-standing ties with Iran, a regime with whom the GCC shares deeply rooted sectarian and geo-security tensions and resentment. Furthermore, till the GCC can establish a degree of harmonization and alignment over monetary policies, it is unlikely that it would abandon its continued peg to the dollar – including, of course, over oil and natural gas transactions. In lieu of putting all their eggs in one basket in relation to both the U.S. and China, GCC states are more interested in carving out their own paths of strategic autonomy – doing and engaging in foreign policy in their own way. Beijing should heed this – and seek to find more creative ways of conducting bilateral diplomacy and deepening bidirectional ties, whilst refraining from harboring unrealistic expectations on the relationship.