Global Independent Analytics
Theodore Karasik
Theodore Karasik

Location: USA

Specialization: Geopolitics, Geoeconomics

A New Geo-Strategic Leap Forward

January 2016 will be seen as the launch of a new global geoeconomic order with an Eastern edge. 

There are two notable geo-strategic events that rocked the world during January 2016 regarding China, Iran and the Middle East.

The first, Chinese President Xi Jinping’s visit to Saudi Arabia, Egypt, and Iran, represented the first, full frontal launch of China’s One Belt, One Road (OBOR) strategy.  The second, Iranian President Hassan Rouhani’s visit to Italy and France signaled Tehran’s opening to Europe. Combining both of these events, the world economic order is clearly shifting to the East. 

Beijing is expanding its OBOR to include two arteries: The Silk Road Economic Belt and the 21st Century Maritime Silk Road. All three countries — Saudi, Egypt, and Iran — play a major role in this Chinese plan. First, from the Chinese viewpoint, it is about land and potential for strategic minerals and energy. The other factor is the sea lanes in which to transport and to keep free of threats. This is why Beijing supports the Yemen government in Aden. To be clear, Beijing sees itself as a negotiator which stands above the geo-sectarian front by promoting economic development and ignoring what it sees as much more low-level religiopolitical disputes. China is, as ever, taking a long-term approach.

Importantly, given that OBOR’s strategic nodes cross in and around the Middle East and Iran, the emerging relationships will take on security dimensions.  Combined with the rise of China’s Asian Infrastructure and Investment Bank (AIIB), the multilateral ties emerging will focus increasingly on the safety and security of all countries economic interests and investments. 

Increasingly, the Arab states and China see eye to eye on the necessity to keep supply chains open throughout maritime sea lanes not only in the Indian Ocean but also in the Arabian, Omani, and Aden Gulfs. Chinese naval vessels, who have been part of counterpiracy operations off the coast of Somalia for the past several years, are also making ports of call to Arab allies in the region. Clearly, the Arab States and Iran are a focal point for Chinese security interests — and vice-versa —  and is a necessary partnership in the grand scheme of how Beijing’s policy towards MENA will play out.  

In addition, Chinese security interests match the Arab’s requirements because of the evolution of the Islamic State and other extremist groups. The Arab countries and China share a mutual desire to eradicate these type of groups, especially the Islamic State, where Uighurs from Xinjiang Province are increasingly becoming radicalized in the Levant and Southeast Asia.    

Turning to Iran, Iranian President Hassan Rouhani’s visit to Italy and France, the first two European countries he visited after Implementation Day, is a further shift to the East. 

With sanctions lifted by the European Union, Rouhani, accompanied by the charming Foreign Minister Mohammad Javad Zarif, held critical meetings during their Southern European visit. The ties that bind were illustrative and in full display of Iran as an emerging international power and player.

Iran signed a dozen or so deals with Italy with very positive prospects for Italian businesses: from oil services group Saipem to shipmaker Fincantieri, which will be involved in the revival of the Iranian shipbuilding industry as well as in the mercantile and offshore fields; from Ansaldo Energia and Condotte; to Gavio and Pessina Costruzioni, which was picked to build and manage five “turnkey” hospital facilities in project financing.

To boot, the Islamic Republic signed over 30 deals with France in agriculture, health, industry, telecommunications, aeronautics, sustainable development, transport. French President François Hollande said he couldn’t remember all of them.

What does this Iranian activity in Europe have to do with Beijing?  Everything.

The Islamic Republic’s emergence in the international economic arena fits nicely into Beijing’s OBOR.  Last March 2015, the Chinese government announced OBOR’s scope. OBOR is a proposed network that follows both overland and maritime routes to connect the economies of Southeast, South, Central, and West Asia to China. Terminating in Venice, Italy, the historic western end of the old Silk Road, OBOR is the first Chinese strategic concept that includes a special focus on the Middle East.  This terminus is part of what Rouhani’s visit to Italy is about; helping Beijing with its vision.  France, it seems, will be the Western edge, replacing the United States as a security and economic partner with Gulf littoral.

Overall, what China is doing is trying to capture the global economic market on Beijing’s terms with like-minded partners.  With Iran’s emergence from sanctions, Tehran is part of Beijing’s toolbox for the long term to bring OBOR to a reality.  It is clear that China and Iran are the winners of a larger geostrategic balancing against the United States – by counterbalancing US power in Western Asia, while, at the same time, China is expanding its geostrategic footprint and influence into the region and beyond.  By capturing the attention of both the Arabs and the Persians, Beijing is finding a winning formula that illuminates the new nature of geo-economics and strategy.

To make a final point regarding the importance of the January 2016 events, is that Beijing’s OBOR is based on Tai Ji, an ancient philosophy in China, which argues that "Yin and Yang are the Tao", Tao consists of the heaven Tao, earth Tao and man Tao, which says that all things have two aspects of Yin and Yang, for example, heaven and earth, day and night, mountains and rivers, man and woman, rigid and flexible, etc. and both sides change constantly, possess some ties relevantly between them. Of which the man Tao mainly refers to thought, thought decides behavior and attitude. Tai Ji advocates that people should respect their own ideas, respect the laws of nature and learn to control their emotions.  This is why China is able to deal softly with the multitude of political and economic disputes within the OBOR arena without pressure.  Iran’s emergence is also part of this reality.  It is literally “All serves me, I serve all, too”.

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