RONDELI BLOG

What does China's initiative to normalize relations between Iran-Saudi Arabia actually mean?

2023 / 03 / 27

Zurab Batiashvili, Research Fellow at Rondeli Foundation

On March 10, 2023, three countries - China, Iran and Saudi Arabia - signed a joint statement regulating relations between Tehran and Riyadh.

Why is this Chinese initiative important and what can we expect from it?

During the signing ceremony of the trilateral document

Iran (which is considered the leader of the Shiite world) and Saudi Arabia (which is considered the hegemon of the Sunni Arab world), both being heavyweight regional leaders, have repeatedly faced the threat of a serious military conflict in recent decades, seriously increasing the chances of the destabilization of the entire Middle East.

These two powers have long been confronting each other through "proxies" - their own supporters on the ground in Yemen, Lebanon, Syria, the Persian Gulf, the Gaza Strip and elsewhere, a conflict that has not only resulted in numerous casualties, but also cost tens of billions of US Dollars. At the same time, neither side has had a decisive advantage, which is why these conflicts dragged on in time and caused many additional problems for both Iran and Saudi Arabia.

Structure of the Iran-Saudi Arabia confrontation

In accordance with the recently negotiated agreement, Iran and Saudi Arabia have decided to resume diplomatic relations for a period of two months. The two countries cut relations after a 2016 incident that saw Iranian protesters assaulting the Saudi Embassy in Tehran while protesting the execution of Shia cleric Nimr al-Nimr in Saudi Arabia.

The Saudis expect that once the agreement is reached, the Iran-backed Yemeni Houthis will stop attacking Saudi Arabia, which has resulted in serious damage to Saudi Arabia's infrastructure and economy (including the oil refining industry and oil transportation). In total, Yemen's civil war, which began in 2014 and put both Iran and Saudi Arabia against each other, has claimed more than 377,000 lives to date. As such, ceasing it is in the interests of many actors.

Simultaneously, Tehran wants to shake off its international isolation, which has caused substantial economic and reputational damage to the country.

It is in Beijing's interest to guarantee continuous delivery of oil from the Middle East region for the development of its own economy, which cannot happen, for example, if a military conflict kicks off between Iran and Saudi Arabia. This agreement clearly reduces the threat of a direct military confrontation between the two countries.

China also wants to create an alternative of sorts to the United States and engage more actively in global matters (Xi Jinping's recent visit to Moscow also supports this thesis).

Until now, many mediators have tried to regulate relations between Iran and Saudi Arabia, but without success until China’s recent efforts (which necessitated three months of intensive work). However, it has only just begun and, naturally, the question arises: Will this process be successful?

There are numerous visible and invisible factors in the Middle East that can bring up serious questions about China's initiative. All the more so against the background of China for the first time becoming actively involved in the affairs of the Middle East, more specifically, the fact that China has little experience in this region.

It is a fact to be taken into account that China has limited leverage over the region to affect the course of the process. While it is true that 28% of Saudi oil exports go to China, due to the sanctions imposed on Iran, the volume of trade between China and Iran is limited - Iran's exports to China from March to October 2022 was only worth 9.2 billion US Dollars).

It is also worth mentioning that China, unlike its main competitor the USA, has never participated in the security architecture of the region. Its nearest military base is in Djibouti and as such it has no real military leverage in the Middle East to potentially influence it.

Another obstacle to the mediator's role is the perception of China's actions by the parties. Many in Saudi Arabia were unhappy with the fact that Beijing signed a 25-year cooperation agreement with Tehran in 2021. On the other hand, the Iranians were dissatisfied with China's statement which undermined Tehran's position regarding the ownership of three islands in the Strait of Hormuz.

However, despite the abovementioned, China is determined to take even more drastic steps regarding the future of the Middle East. For example, its intention to hold a summit with the participation of Arab monarchs and Iran.

The United States of America is closely monitoring China’s actions in the region. The US officially welcomed this initiative because stability in the region is also in Washington's interests. However, a legitimate question arises here: Is Beijing's influence increasing in the Middle East at the expense of Washington? Clearly, this question will have to be pondered and answered by decision-makers in the United States in the future.

Naturally, Israel is watching the development of events closely. According to Prime Minister Binyamin Netanyahu, "the weakness of America and Israel" encouraged Riyadh to seek other channels. It is clear that the Iran-Saudi Arabia rapprochement obscures both the Israeli-Arab rapprochement process and the overall broader prospects of creating an anti-Iranian coalition.

Conclusions:

China has taken advantage of the diplomatic vacuum that has been created in the region over the last year, with Washington and Moscow (who were both actively involved in Syria and the Middle East from 2015 onwards) now focused on the Russia-Ukraine war. Beijing has thus been able to play an important mediating role in the Middle East region;
The signing of the agreement is an important step not only towards de-escalating tensions between the two countries, but could also affect Iran's relations with the small but wealthy Arab states of the Persian Gulf, where Saudi Arabia's influence is strong;
The signed statement does not solve the problems in relations between the two countries. The document states that "the parties will not interfere in each other's internal affairs", yet it does not mention specific regional issues nor ways to solve them. The question remains open as to how these countries will continue their relations with their so-called "proxies", which are among the main tools of their foreign policy. Thus, there are still a number of issues between Iran and Saudi Arabia (for example, Syria, Iraq and Lebanon) where the parties take radically different stances;
The signed document is a "declaration of intent". It will take some time to see how much the leaders’ signing of it will mark the beginning of de-escalation in the region. As such, it will become clear only in the future how viable and effective this declaration really is;
There are a number of problems in the region (including the severe economic sanctions imposed on Iran, difficulties related to Iran's nuclear program, national interests of various countries), which may prevent the fulfillment of the above-mentioned intentions;
China is also taking a risk by becoming more active in the Middle East. If Beijing’s initiatives fail, China could suffer significant reputational damage, which will not be limited to the Middle East region;
If the process of rapprochement between Iran and Saudi Arabia initiated by Beijing is successful, the United States and Israel will have to develop a new strategy towards the Middle East.

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What does China's initiative to normalize relations between Iran-Saudi Arabia actually mean?

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