China’s Strategic Facilitation in the Persian Gulf Security Crisis

Introduction

Over the past two decades, China has invested significant economic, political, and diplomatic resources in building strong partnerships in the Middle East. The region has become a focal point in Chinese foreign policy and a key land and maritime node along the Belt and Road Initiative. This, however, has increased China’s exposure to regional instability, numerous conflicts, and protracted geopolitical rivalries, which have marred the region for decades.

As a relative newcomer, China has only begun to experiment with mediation activities in conflicts that pose a threat to its interests. Compared to peer competitors, Beijing lacks substantive knowledge and experience on the means and modalities of mediating conflicts. China’s approach to mediation, more generally, is still an evolving and highly contextualized concept. Over the past two decades, China has evolved from a conflict avoider to a conflict manager, in which it willingly involves itself in the mediation process for a wide variety of reasons, ranging from protecting interests to promoting a positive image.

Over the same time period, Chinese leaders have taken a more flexible interpretation of non-interference in order to protect their interests in conflict regions.¹ Sun and Zoubir term China’s participation in conflict as “quasi-mediation,” which they describe as a “cautious approach to conflict resolution whereby a would-be third-party actor willingly participates, but does not play a consequential role in the mediation process.”² In the Middle East, Beijing has engaged to some degree in mediation activities, though these activities more resemble a facilitator role, in as many as 18 regional issues across the Middle East.³ These range from conflicts where China had explicit interests, such as Sudan, to those where Beijing had few discernible interests, such as Yemen or Syria. Across these cases, Beijing more often played the role of facilitator and, to a lesser degree, the role of mediator.

The Iranian-Saudi rivalry is one of the more interesting cases in which Beijing, despite significant political and economic leverage, has resigned itself to the role of facilitator, eschewing any substantive form of traditional mediation in favor of strategically balancing relations with both sides. Iran and Saudi Arabia are arguably two of the most important players in the Middle East and twin pillars of China’s Middle East policy. China has significant tangible interests (e.g., energy security, economic investment, and trade) and strategic interests (e.g., comprehensive strategic cooperation agreements) wed to its relations with both Tehran and Riyadh, and Beijing has invested significant resources to cultivate deep partnerships. The perceived benefits of Beijing’s strategic engagement with both regional powers, however, are tethered to security in the Persian Gulf. Traditionally, China prefers not to pick sides in regional conflicts, and forgoes interference in conflicts to avoid the image of a meddling power and reinforce a reciprocal commitment to non-interference. However, the size and scope of China’s engagement in both Saudi Arabia and Iran has exposed Beijing and its interests to the risks of escalation in the Gulf region.

Beijing’s deepening engagements with both sides since 2016 has raised regional expectations of a deeper Chinese political role in mediating the crisis. Chinese leaders have reinforced such expectations, going as far as publicly highlighting China’s “active part in the affairs of the Persian Gulf region” and promoting that China “. . . dedicates itself to pushing the alleviation of the regional situation.”⁴

This chapter argues that, despite China’s broad interests in the Persian Gulf region and increasing expectations from the region to assume a larger role in mediating the Saudi-Iranian rivalry, Beijing has preferred the role of facilitator over that of mediator, in which it aims to capitalize on the strength of its ties and neutrality to shape the dialogue process, without directly involving itself in the political substance. As facilitator, Beijing shows itself a willing partner to both sides, thus enabling it to expand bilateral cooperation while operating within the sensitive parameters of neutrality in order to maintain a strategic balance. Chinese officials, at varying levels, participate in shuttle diplomacy between Saudi Arabia and Iran during periods of escalation to advocate de-escalation and support the country’s role as facilitator while urging dialogue and de-escalation. Such efforts are often insignificant in the grander scheme of Gulf mediation, but they enable Beijing to signal equivalency in its ties with both sides. This also enables Beijing to advance a public image of itself as an active mediator in the Gulf crisis, without having to make any political commitments to competing parties that could undermine its strategic balance of both sides.

The chapter proceeds with a brief overview of the Saudi-Iran rivalry, its core drivers, and impacts on Chinese interests in the Persian Gulf. It then continues with an evaluation of China’s response to various crises emerging from the Iran-Saudi rivalry, and concludes with an analysis of China’s role as a facilitator in the Gulf crisis.

Half a Century of Conflict and Competition

Competition between Saudi Arabia and Iran has dominated the Persian Gulf’s political environment for nearly a century. The rivalry has witnessed over five decades of contestation for regional hegemony, military supremacy, and religious leadership. The overthrow of the Iranian monarchy during the Iranian Revolution in 1979 and the wider aims of the Iranian Revolution heightened the rivalry between Tehran and Riyadh.

The guiding ideal of the Iranian Revolution’s external dimension was the motivation to alter the regional status quo by inspiring or supporting local revolutions in the region, particularly in Saudi Arabia. This approach provoked insecurity among Saudi Arabia and other Gulf leaders, who sought to preserve the regional status quo and thus ensure regime survival.

Over the years, the Iran-Saudi rivalry has not only intensified but has widened, taking various forms and playing out on many fronts through the years—in countries in conflict such as Afghanistan, Iraq, Yemen, and Syria, and in organizations such as the Organisation of Islamic Cooperation and the Organization of the Petroleum Exporting Countries.

The Saudi-Iranian rivalry touches all parts of the bilateral relationship, and the leadership of both countries perceives the rivalry in zero-sum terms.⁵In this view, any advantage gained, acquired, or developed by one side could be considered a direct disadvantage to the other. While such contestation does not persist in absolute terms, the broader analytical perspective clarifies the extent to which micro- and macro-developments can heighten tensions and escalate competition. The rivalry is driven by three broad, interrelated areas of competition: geopolitical contestation, military competition, and religious legitimacy.

GEOPOLITICAL CONTESTATION

Iran and Saudi Arabia compete to advance their respective visions of political leadership, governance, and regional order in the Middle East and across the Muslim world. Both have also sought to bolster their political legitimacy within the international community. Saudi Arabia, as well as the other members of the Gulf Cooperation Council (GCC), leverage their robust defense and political relations with the U.S. to advance international condemnation of Iranian actions and raise the profile of Iran’s expanding sphere of influence across the region, including in Syria, Yemen, and Lebanon. Iran, meanwhile, has relied more heavily on traditional U.S. competitors, China and Russia, to push back against Western pressure and bolster their political legitimacy on the global stage, while cultivating influence across the region through the use of proxies.

MILITARY COMPETITION

The geopolitical rivalry is underpinned by a zero-sum competition for military supremacy in the region. In this case, any military advantage obtained by one side is perceived as a disadvantage to the other. Similarly, the expansion of one’s influence in one region is perceived as the potential loss of influence to the other. This has engendered a series of proxy wars in Syria and Yemen, through which both sides have established and bolstered their respective proxies.⁶

For Iran, the use of paramilitary and proxy forces for destabilization across the region has become a powerful tool for projecting military power to target and undermine Saudi influence. Meanwhile, for Saudi Arabia, military competition with Iran has been defined by a threefold approach of fighting Iranian proxies in Yemen and bolstering its own influence in Iraq and Syria, while building its own defensive and offensive capabilities for an eventual conflict with Iran.

RELIGIOUS LEGITIMACY

A primary intangible struggle, which has distinct geopolitical and military manifestations, is Tehran’s and Riyadh’s competition for Islamic leadership. The struggle for Islamic leadership, the desire to lead and influence the Muslim world, is linked to religious legitimacy and is reflected across statements, speeches, and actions made by both governments.⁷Iran sees itself as the representative leader of the Muslim world and principal opposition to Western influence, namely Israel and the United States, in the Middle East. Its revolutionary identity has profoundly shaped its outlook on the Western world and serves as a primary driver of its ideological and religious competition with Saudi Arabia, who it sees as an agent of the West. For Saudi Arabia, Iran’s rise and potential as a regional and international leader for the Muslim world threatened Saudi Arabia’s own leadership ambitions, built on its legitimacy claim as custodian of the two holy mosques. As a result, the Saudi monarchy has embarked on a mission to “maintain its religious bona fides” by competing with and undermining Iranian religious claims.⁸

Benchmarking China’s Interest in the Persian Gulf

Why has the Chinese leadership wedded its long-term stability and core resource interests to a rivalry whose geopolitical divisions and strategic competition have, until the present, proven to be intractable? Iran and Saudi Arabia are important long-term Chinese partners whose domestic features—energy markets, economic potential, population size, geographic importance, natural resources, and more—and regional geopolitical importance make them critical to China’s Middle East policy. Put simply, China would benefit greatly from their rapprochement.

The Persian Gulf, which contains 55% of the world’s oil reserves and 40% of the world’s gas reserves, occupies an increasingly strategic position within China’s long-term growth trajectory.⁹Since China’s opening and reform, demands for energy led China to tailor its foreign policy to improve its access to critical reserves by deepening ties with oil-producing nations. Its attention turned toward the Persian Gulf in the 1990s. In 1999, the Chinese government implemented the “Go Out” (zouchuqu zhanlüe) policy to incentivize outbound investment into oil-rich markets. The vast oil reserves located in the region became critical for sustaining China’s domestic economic growth. President Xi Jinping’s 2012 “Rejuvenation of the Chinese Nation” (Zhōnghuámínzú Wěidà Fùxīng) again placed sustainable development and economic growth at the forefront of national priorities, with the objective of transforming China into a moderately prosperous society.

Since 2016, the Persian Gulf region has become a focal point in Chinese foreign policy and a strategic region for the growth of the BRI. In a 2016 speech to the Arab League, Xi unveiled Beijing’s foreign policy priorities for the Middle East, which he termed the 1+2+3 cooperation pattern.¹⁰ Under this cooperation framework, Xi emphasized that China’s first priority would be energy cooperation, followed second by infrastructure, investment, and trade, and third by nuclear energy, satellite technology, and renewable energy.

The long-term salience of dependable access to energy supplies has gradually elevated the status of the Persian Gulf nations — Iran, Saudi Arabia, and the GCC — in Beijing’s strategic calculus. Energy security and cooperation is further enshrined in China’s comprehensive strategic partnership agreements signed by both Saudi Arabia (2016) and Iran (2021). These efforts aim to hedge against two perceived challenges to China’s energy access in the region: 1) the risk of regional conflict or all-out war and 2) U.S. influence and leverage with GCC partners to cut supplies to China.¹¹ Through BRI cooperation with the Gulf region, Beijing has steadily improved its access to energy and other natural resources from the region.

Beyond energy security, China has diversified the substance of its engagement with Gulf nations, including increasing economic trade and investment in the Gulf markets and strengthening political ties with Gulf nations. This has better positioned Beijing to enhance cooperation with Gulf states on regional stability to bolster China’s image as a great power.

CHINA’S INTEREST IN SAUDI ARABIA

Saudi Arabia is one of China’s most important assets in the region and largest provider of crude oil. The scale of Sino-Saudi economic potential has impressed upon China the importance of sustaining and broadening its ties with the Kingdom. From 1995 to 2022, Chinese imports from Saudi Arabia grew from $264 million to $68 billion, an estimated average annual rate of growth of 21% in total exports.¹² In 2022, crude petroleum accounted for $56.1 billion, an estimated 82 percent of China‘s total imports from the Kingdom. Saudi Arabia was China’s leading crude oil provider, but it was surpassed by Russia as China diversified its energy imports as a result of the 2022 Ukraine crisis and a U.S.-led Russia oil embargo.¹³

While the bilateral relationship is built primarily on energy and oil, China and Saudi Arabia established a comprehensive strategic partnership in 2016, which aims to foster bilateral cooperation through a series of agreements in political, economic, commercial, cultural, humanitarian, military, security, and energy fields, as well as bilateral cooperation in regional and international forums in order to improve Chinese-Saudi coordination at the highest levels. The bilateral relationship is guided by the China–Saudi Arabia High-Level Joint Committee, co-chaired by China’s vice premier and Saudi Arabia’s Crown Prince Mohammed bin Salman, to oversee the future orientation of the bilateral relationship and oversee the implementation of strategic priorities for both countries.¹⁴The group serves as an important mechanism for communicating and socializing shared values and aligning priorities.

Since the pandemic, China and Saudi Arabia have jumpstarted bilateral ties. The joint committee meetings have been on hold because of the pandemic, but in his March 2022 visit Chinese Foreign Minister Wang Yi expressed eagerness to energize the committee’s work to capitalize on Saudi Arabia’s unprecedented 2022 economic growth to facilitate inbound and outbound foreign direct investment in critical industries. In the first half of 2022, Saudi Arabia, for the first time, was the single largest recipient of Chinese BRI funding, totaling $5.5 billion, followed next by Iraq.¹⁵Beijing’s 2022 shift away from previous BRI focal points, such as Pakistan, to Saudi Arabia and Iraq suggests that broader geopolitical developments, including the Ukraine crisis and corresponding global energy crisis, have, in part, pushed China to prioritize investments in energy-rich regions, though not all BRI funding went to energy sectors.

China’s renewed diplomatic offensive is motivated by a desire to offset growing energy insecurity at home, amidst increased volatility in the global energy market. As Beijing reduces its dependency on coal, energy cooperation with the Persian Gulf, particularly Saudi Arabia, is critical to building a robust domestic energy market. More specifically, China is attracting the necessary financing, expertise, and technology with the goal of developing a stronger, more resilient domestic energy market. In 2022, Saudi Arabia’s state-owned oil company Aramco signed agreements with Chinese companies to develop a new refinery and petrochemical complex in China and to cooperate on oil production, carbon capture, and the development of hydrogen energy.¹⁶ In addition to soliciting inbound Saudi investments into China’s domestic energy sector, Beijing has targeted BRI investment into Saudi Arabia, with a focus on oil and gas-related investments and construction. These factors indicate the presence of long-term mutual interests between Beijing and Riyadh.

CHINA’S INTEREST IN IRAN

China has made significant strides to bolster its relationship with Iran, though it has not yet reached the same degree of maturity as Beijing’s relationship with Saudi Arabia. From 2012 to 2019, China was the single largest foreign investor in Iran.¹⁷ Since 2000, Chinese exports to Iran have grown in volume from $713 million to $24 billion by 2014, then dropping to $9.6 billion by 2019.¹⁸ Signed in 2016, China had deepened its ties with Iran under the framework of a comprehensive strategic cooperation agreement, without undermining a cooperation with Riyadh under a similar agreement. In 2021, China and Iran also signed a 25-year cooperation agreement, which outlined a robust $400 billion roadmap for comprehensively developing Iran’s economy, military, and technology, though its implementation is currently hampered by U.S. sanctions. If those are lifted, Iranian experts estimate bilateral trade between Iran and China could reach as high as $60 billion over the long term.

¹⁹It is important to note that Beijing’s reluctance to trigger U.S. secondary sanctions has been a disincentive for the rapid expansion of Sino-Iranian relations. However, since the U.S. withdrawal from the 2015 Joint Comprehensive Plan of Action (JCPOA, or Iran Deal), Beijing has increasingly voiced opposition to U.S.-led Iranian sanctions.²⁰ Chinese companies continue to do business with Iran, despite sanctions, providing Tehran a critical economic lifeline.²¹

China’s principal interest in Iran is long-term energy access. Iran is an important oil provider for China, but its overall strategic importance has waned over the past decade, driven in part by international sanctions and China’s diversification of energy resources, with an emphasis on the GCC. Chinese imports of Iranian mineral fuels rose from $129 million in 1995 to $23 billion in 2011 but have continued to drop to $165 million by 2021.²²In 2014, Iran ranked the third largest exporter to China, but it has gradually moved to sixth as China shifted imports to other partners, including Russia, GCC countries, and Iraq.²³

China has taken steps to transform Iran into a potential long-term option to diversify China’s energy exports in the Middle East.²⁴ Beijing’s $400 billion, 25-year cooperation agreement with Iran was indicative of China’s long-term ambitions for securing access to and expanding production of Iranian energy, as well as bolstering Iran’s geostrategic location as a central node on both the BRI overland and maritime trade routes. The agreement, if fully realized, could insulate China’s oil interests from Western influence or pressure over the long term.

The challenge, however, remains that Iran’s volatility, due in part to internal instability driven by popular political unrest and external conflict with Saudi Arabia and the United States, makes Tehran an unpredictable and less reliable partner for China.

China’s Strategic Balancing in the Gulf Crisis

China has, until now, managed to remain above the geopolitical fray of the Gulf security crisis, but the ebbs and flows of escalation and its destabilizing effect in the broader region threatens the Chinese government’s interests, investments, and trade in the region. China’s leadership has balanced the need to maintain neutrality, balanced diplomacy, and a position of noninterference with increasing demands from both Iran and Saudi Arabia in the region and back home to secure Chinese energy access and interests in the region. This has created a constraint between Beijing’s strategic balancing approach with escalating dynamics and shifting geopolitical challenges that could undermine Chinese interests, if not mediated.

To preserve the sensitive diplomatic balance, Beijing has relied less on traditional mediation than on facilitation, a process by which Beijing facilitates communication between conflicting parties both bilaterally and multilaterally in order to enhance mutual understanding and build trust between actors.²⁵ Chinese officials are less concerned with the content of the process (which is determined by the conflicting parties), but rather focus on facilitating the dialogue process by creating the space in which actors can pursue negotiations over mutually agreed-upon issues. This process aims to position Beijing as a neutral and acceptable third-party actor with both sides and has enticed tacit buy-in from Iran and Saudi Arabia for participation in talks. It also aims to expand diplomatic space for discussions on Gulf security through multilateral platforms and include a broader range of relevant stakeholders at the negotiating table. Such examples include China’s Middle East Security Forum and the China-Arab Cooperation Forum.

Beijing’s facilitator role has been accompanied by the use of Chinese officials to engage in shuttle diplomacy to manage periods of escalation that do not reach the threshold for high-level engagement. To date, the foreign minister has been the highest-level official to directly offer to mediate or facilitate dialogue in the Gulf crisis. China’s special envoy to the Middle East has also functioned as a liaison for interfacing with a range of state and nonstate actors engaged in violent conflict or protracted crises. Most often, this has involved the deployment of a Chinese official to meet bilaterally with Tehran and Saudi Arabia and urge dialogue and de-escalation.

China’s role of facilitator is based in a growing belief within China’s foreign policy establishment that Arab countries—namely the GCC—are increasingly open to expanding and strengthening relations with non-Arab nations.²⁶ More specifically, Chinese scholars argue that the space for negotiations is growing, and point to increased interactions between the UAE and Saudi Arabia with Iran as evidence of thawing relations.²⁷ This belief is also accompanied by an assertion among Chinese foreign policymakers that both Iran and Saudi Arabia consider Beijing an acceptable third-party facilitator.²⁸

Facilitation also fits comfortably within China’s broader core diplomatic principles. Chinese officials emphasize the mutual respect for national sovereignty, through which core diplomatic messaging underscores a reciprocal commitment of noninterference into the domestic affairs of the other, as outlined in official guiding documents that include China and the World in the New Era, China-Arab Policy Paper, and China’s International Development Cooperation in the New Era, among others.²⁹

Beijing also opposes the use of military intervention and sanctions, unless fully approved and implemented under the UN framework. Alternatively, China advocates the peaceful resolution of disputes through negotiation and dialogue between feuding parties. And it prefers managing crises through UN institutions, while simultaneously empowering regional bodies, such as the League of Arab Nations or the GCC, to address crises without interruption or interference from outside actors.

The Chinese government’s position toward the Iran-Saudi rivalry has evolved along these core pillars. Beijing recognizes both Tehran’s and Riyadh’s sovereignty and has veered away from any mediatory action that could signal the opposite. This can be seen at the national level, where China’s diplomatic rhetoric toward Saudi Arabia and Iran aligns with the central state and high-level narratives on China’s broader foreign policy principles. Beijing also actively voices opposition to unilateral sanctions and threats of military intervention against Iran, which fall outside the UN framework. This has become more acute since the U.S. withdrawal from the 2015 Iran Deal. Rather than focus on unilateral actions that China considers escalatory, Chinese officials underscore that resolving regional insecurity lies in dialogue between competing parties, and their efforts have focused more heavily on facilitating dialogue and creating space for Tehran, Saudi Arabia, and other relevant parties to peacefully resolve their issues.³⁰

This rhetoric aims to reinforce for Tehran and Riyadh China’s geopolitical neutrality and image as a benign actor pursuing mutually beneficial comprehensive cooperation. Liu Zhongmin explained that China “does not pick sides in the Middle East. It [China] has no allies, nor does it have enemies. It has maintained friendly relations with both sides of conflicts—even when Iran and Iraq were at war.”³¹ While China’s strategic interests differ with Tehran and Riyadh, Beijing has pursued an image of impartiality in its relationship with both and has communicated this diplomatically by extending the same menu of engagements with both sides. This is particularly evident in Beijing’s diplomacy, economic relations, military cooperation, and conflict de-escalation.

Diplomatically, Beijing signed comprehensive strategic partnership agreements with both Iran and Saudi Arabia in 2016 during Xi’s regional Middle East tour. These agreements raised both Saudi and Iranian diplomatic relations with China to the highest level, without locking Beijing into any policy or security commitments that could undermine its relationship with either party.³² The strategic importance of China’s use of partnerships, as opposed to alliances, is that they are shaped by the pursuit of shared goals, not shared threats.³³This enables Beijing to pursue bilateral cooperation with both Iran and Saudi Arabia, while avoiding geopolitical entrapment in the rivalry.

Beijing prefers to prioritize more benign forms of cooperation with both sides—economic trade, infrastructure, and investment—over security and defense cooperation. This fits within Beijing’s broader theoretical “peace as development” approach, which envisions peace as a product of national economic development.³⁴It also reflects Beijing’s pragmatism to avoid the perception of privileging one side over the other. Within this framework, Chinese leaders seek to integrate the national development plans of both Iran and Saudi Arabia into the broader BRI umbrella. For Iran, its 25-year cooperation agreement, signed in March 2021, outlined China’s ambitions for investing in and developing Iran’s economy as an extension of the BRI. Meanwhile, Beijing has made the integration of the BRI with Saudi Arabia’s Vision 2030 plan a central pillar of its Middle East foreign policy. Under nonmilitary forms of cooperation, Beijing has managed to expand its economic footprints in both markets without triggering significant resistance from either government.

Beijing has also abstained from privileging one side with a particular military advantage, whether real or perceived. For example, in 2017 and 2019, Beijing carried out military drills separately with Iran and Saudi Arabia, occurring within a few weeks of each other in order to avoid sending the wrong signal.³⁵ It is evident from the timing of its engagements that the Chinese government takes great care to signal equivalency in its cooperation with both sides, particularly in security and military engagements. This care has not eliminated concerns from Riyadh over China’s growing ties with Iran. Scholars highlight two supporting pieces of evidence. First, Saudi leaders historically attempted to persuade China away from its relationship with Tehran, and continue to raise their objections with Beijing.³⁶ Second, following the signing of the 2021 China-Iran 25-year agreement, Saudi commentators predominately perceived the agreement, in the context of the broader rivalry, to be a cause for concern and a potential sore point in Sino-Saudi relations in the future.³⁷ To date, however, Sino-Saudi ties continue to deepen, despite Saudi Arabia’s hesitance over concurrently improving Sino-Iranian ties.

Beijing’s Response to Crises in the Persian Gulf

Since 2006, Beijing has been drawn into a series of crises between Saudi Arabia and Iran: the nuclear negotiations (2006-2015), the breakdown of diplomatic relations between Iran and the GCC and the U.S. withdrawal from the JCPOA (2016-2019), a series of attacks on Saudi infrastructure (2020-2022), and Saudi-Iranian rapprochement (2023-2024). In these cases, China has been reluctant to get entangled in the Iran-Saudi quarrel, and has, to date, avoided traditional mediation. Rather, Beijing prefers to embed itself within UN deliberations and facilitate dialogue using existing forums, through the construction of a new regional security architecture and the use of its good offices.

This section explores China’s varied responses to these crises and efforts to balance its strategic neutrality with a growing need to stabilize its ties during periods of escalation.

IRAN NUCLEAR NEGOTIATIONS (2006-2015)

Beijing initially played a supportive role as a member of the P5+1 mechanism and the Geneva Process in urging dialogue when the risk of conflict between Iran and Western opponents over Iran’s nuclear program began to foment. Initially, Beijing’s engagement consisted only of traditional diplomacy within the framework of the UN to reach an agreement to deter violence. Beijing gradually expanded its role by acting as both a facilitator and interlocutor between the P5+1 and Iran. In 2008, China convened a round of talks with the P5+1 in Shanghai with the aim of reviving stalled talks with Iran through an expanded incentives package.³⁸ Though the initial effort in 2008 yielded little success in bringing Iran back to the table, Beijing used the platform to reinforce to P5+1 members its preference for a UN-brokered solution over the use of force, while also utilizing the high-visibility meeting to bolster its public image as a mediator. In 2009, Beijing gradually introduced higher-level engagement with the Obama administration via senior officials in the White House, as progress in the Geneva negotiations generated additional progress toward a final agreement in 2015.³⁹

For China, the Iran nuclear dispute was part of a deeper issue at play during the Geneva process—a powerful sense of mistrust among relevant parties.⁴⁰ While traditionally this included the P5+1, it left Saudi Arabia and GCC countries on the periphery of negotiations. The failure to address regional insecurities linked to the broader Iran-Saudi dispute would feed existing tensions, which were already manifesting themselves through proxy conflicts in Syria and Yemen. Chinese scholars argued that a lack of regional security mechanisms to address the regional implications of the intensifying rivalry was a major shortcoming in the region,⁴¹ particularly as new geopolitical relations—the emergence of a multipolar system—heightened the strategic importance of Saudi Arabia and Iran in Chinese foreign policy.

Beijing first proposed such a mechanism in 2014, but it received little attention from the international community. The Ministry of Foreign Affairs’ “Five Principles for a Comprehensive Solution of the Iranian Nuclear Issue” outlined five steps for maintaining momentum in the peace talks and a post-agreement framework for addressing the “root cause of the Iran nuclear issue,” namely the lack of political trust.⁴² The proposal called for the development of a “new security concept” for the region, a security approach that advocates replacing the use of military force with dialogue and cooperation to safeguard national, regional, and international security.⁴³ Like Beijing’s other proposals for resolving crises in Syria and the West Bank, the efforts were largely received as well-intentioned but underdeveloped pitches that, at a minimum, provided China a degree of visibility as a willing mediator in regional conflicts, but lacked any real substance.

IRAN-SAUDI ESCALATIONS (2016-2020)

While Sino-Iranian relations improved with the 2015 signing of the JCPOA, Iranian-Saudi relations digressed following a period of intense of tit-for-tat political moves resulting in the outbreak of isolated conflict. In January 2016, Saudi Arabia executed Sheikh Nimr al-Nimr, a prominent Shi’a cleric and opposition figure hailing from the eastern province of Qatif, which sparked extensive outrage among Shi’a across the Kingdom and in Iran. In response, Iranian senior officials threatened that Saudi Arabia would pay a “high price” for the execution. Shortly following, Iranian protestors stormed the Saudi embassy in Tehran and consulate in Mashhad. Saudi Arabia, followed by the GCC, promptly severed diplomatic ties with Iran. In the four years following, a series of retaliatory actions from both sides bled into the broader region, provoking tensions between the GCC and Qatar and hastening a U.S.-supported “maximum pressure campaign” to isolate and contain Iranian influence in the region. This period reached a zenith with the 2020 assassination of Iranian Revolutionary Guard Corp (IRGC) General Qassim Soleimani in Iraq and a stark escalation in violence between Saudi Arabia, Iran, and Iranian-linked militias in Yemen, Iraq, and Syria.

In reaction to the early January 2016 violence, Beijing dispatched Vice Foreign Minister Zhang Ming to Saudi Arabia and Iran on January 7 to urge restraint, engage in dialogue, and ease tensions.⁴⁴ Publicly, the Chinese government expressed concern that the escalation “may sharpen regional disputes.” Chinese officials did not directly accuse any parties involved; rather, they expressed their desire to develop “friendly and cooperative relations” with both.⁴⁵ Shortly following, President Xi Jinping traveled to the Middle East, with stops in Iran, Egypt, and Saudi Arabia, occurring at the height of bilateral tensions. The timing of the meetings spurred speculation that one of the trip aims was mediation.⁴⁶ However, Xi made no offers of genuine mediation between Riyadh and Tehran, and instead focused on bilateral relations.

China’s Gulf interests again faced challenges when Saudi Arabia, joined by the UAE, Bahrain, and Egypt, severed diplomatic and economic ties with Qatar in a bid to isolate the Gulf nation over a list of complaints, including its diplomatic ties with Iran. In their 13 demands to Qatar, GCC member states demanded that Qatar “curb diplomatic ties with Iran and close its diplomatic missions there. Expel members of Iran’s Revolutionary Guard from Qatar and cut off any joint military cooperation with Iran. Only trade and commerce with Iran that complies with U.S. and international sanctions will be permitted.”⁴⁷

The rift, as Guy Burton argues, caught China off guard. Beijing initially offered to mediate the crisis, but a lack of meaningful political engagement (such as the deployment of Chinese officials to engage with both sides) suggests that the offer was not seriously considered by the parties.⁴⁸ And, in the months following, Chinese leaders rigorously adhered to a position of neutrality, driven by a common belief in Beijing that a) the crisis was indeed a temporary one and b) China would not be the source of a final diplomatic resolution to the rift.⁴⁹ China’s limited efforts to mediate the Gulf rift can also be explained by a desire to avoid antagonizing Saudi Arabia and the UAE, two of Beijing’s largest trade partners,⁵⁰ and by the fact that the perceived risks of the rift to China’s interests were minimal and temporary.⁵¹ Indeed, Beijing was able to maintain economic ties with its primary partners in the region, including Qatar, despite the rift.

THE COLLAPSE OF THE IRAN DEAL

In May 2018, President Donald Trump withdrew the U.S. from the JCPOA, derailing progress made under the previous decade of negotiations. The Trump administration’s maximum pressure campaign on Iran, which followed shortly after, saw a return to extensive sanctions and increased military pressure on Iran through an expanded U.S. force presence in the Middle East. In addition, the administration de-emphasized diplomatic engagement with Iran, improved regional coordination with Saudi Arabia to counter Iran’s regional influence, and further fed heightened geopolitical and military tensions across the Middle East.

China, along with its European signatories, criticized Trump’s decision to withdraw the U.S. from the Iran Deal, but committed itself to maintaining dialogue with all parties toward the implementation of the JCPOA, even without the United States.⁵² Meanwhile, Saudi Arabia welcomed the U.S. withdrawal, accusing Iran of “taking advantage” of the deal to destabilize the region—a position supported also by Israel, the UAE, and Bahrain.⁵³ China’s largest regional partners were slowly escalating tensions, driven in part by the U.S., and Beijing’s diplomatic efforts were preoccupied with working with P5 partners to salvage the Iran Deal and keep Iran party to the agreement. From China’s view, the U.S. withdrawal eroded the legitimacy of the Geneva Process as a multilateral dialogue mechanism for Gulf security, but it remained the only quasi-viable mechanism under a UN mandate. The perceived loss of Geneva further validated the beliefs of Chinese scholars that a regional dialogue would be necessary to bolster dialogue in the absence of a UN-backed mechanism.

ATTACKS ON GCC INFRASTRUCTURE

On September 14, 2019, a series of drones slammed into an oil-processing facility in Saudi Arabia, owned and operated by Saudi Aramco.⁵⁴ The Iranian-backed Houthi opposition group in Yemen claimed responsibility for the attack, triggering a series of escalatory actions that drove Iran and Saudi Arabia deeper into conflict. While UN authorities were unable to confirm Iranian involvement, Saudi Arabia and the United States blamed Tehran. Iranian officials denied responsibility. China neither ascribed blame⁵⁵ nor broke neutrality with Tehran and Riyadh. Instead, Beijing opted for a middle road: appeal for restraint and de-escalation while downplaying U.S. and Saudi claims of Iranian involvement. As one analyst argued, China “. . . was unwilling to become embroiled in the rivalry, choosing instead to expand relations with each side . . . to showcase concerted neutrality.”⁵⁶ In doing so, Beijing shielded Iran from blame until a UN investigation could be undertaken, without delegitimizing Saudi Arabia’s security concerns following the attack.

Again, in March 2022, following another Houthi drone strike against Saudi oil infrastructure, Chinese spokesperson Wang Wenbin expressed support for Saudi Arabia’s efforts to safeguard its security and stability, but refrained from casting blame, only offering that China “urged relevant sides to refrain from taking actions that will escalate regional tensions.”⁵⁷ This was the same line used by Hua Chunying following the 2019 strike and again by Zhao Lijian in 2021 following a Houthi drone strike on the Abu Dhabi airport in the UAE, which left three dead.⁵⁸ China’s refusal to validate Saudi Arabia’s accusations of Iranian responsibility (or, at the least, complicity through proxy ties with the Houthis in Yemen) for attacks against the Kingdom during periods of intense escalation is a continuation of China’s strategic neutrality.

BUILDING AN ALTERNATIVE MEDIATION PLATFORM (2020-2022)

Through these various episodes, Beijing has avoided traditional mediation, and continues to benefit from robust economic engagement with both countries. But the region’s changing security environment, driven by shifting geopolitical dynamics, is generating new challenges for China. Since 2020, Iranian-linked attacks via regional proxies against GCC countries and Israel have increased, heightening security concerns in both Israel and the GCC. The Abraham Accords agreement, a series of normalization agreements signed by Israel, the UAE, Sudan, Bahrain, and Morocco in late 2020, initiated broad policy discussions around Israel’s integration into an Arab security architecture, which has evolved around a perceived Iranian threat in the region.⁵⁹ Israel’s normalization with the UAE and Bahrain has also created greater space geopolitically for eventual Saudi cooperation with Israel on the evolving Iranian threat. This new dynamic will inevitably enhance the GCC’s collective defense and, potentially, offensive military capabilities, which could begin to shift the region’s balance of power to the Arab states. The formation of a new anti-Iran bloc, featuring the UAE, Saudi Arabia, and Israel, could generate more pressure on China to intervene politically as the episodic insecurity continues in the region. Saudi Arabia, among others, is unlikely to demand China cut or reduce ties with Iran, but nations in the region may raise their expectations that China will expand its role as a mediating or even intervening power.

To meet the growing demand, Chinese Foreign Minister Wang Yi proposed in 2020 to the UN Security Council a new multilateral dialogue in the Persian Gulf to manage security issues, including the nuclear question, through collective dialogue among Gulf actors. Wang’s “Three-Point Proposal” outlined three options for addressing the crisis: a) UN mediation, supported by regional bodies, including the GCC; b) bilateral commitments from both parties to dialogue and mutual coexistence; and c) expanded peace talks to include all Gulf countries as well as stakeholders from outside the Gulf region.⁶⁰ The objectives of this approach focused on preserving the JCPOA, managing the Gulf crisis through multilateral dialogue, de-escalating tensions in the region, and building momentum toward a new peace and security consensus in the region. Wang called on Gulf actors to “meet each other halfway” through “trust” and “goodwill.” The corresponding outcome aimed to secure a joint pledge to cease hostilities and refrain from military escalation as a means for resolution.⁶¹

Beijing has proposed this form of facilitation previously in Sudan, Myanmar, Syria, Yemen, and the Israel-Palestinian crisis. Under this proposal, multilateral and regional platforms, like the African Union and the League of Arab Nations, were utilized as conduits to broaden the base of stakeholders in regional dialogues. In Sudan, China utilized the African Union as a third-party stakeholder to obtain then-President Omar Al-Bashir’s consent for a UN peacekeeping mission in Darfur and reassure the Sudanese government that a UN mission to Darfur would largely employ African, not Western forces.⁶² And, again in Myanmar, China leaned on the multilateral forums like ASEAN to support and shape mediation in the country’s internal conflicts.⁶³ However, in the case of the Persian Gulf, the implications of progress or failure would impact China’s interests more acutely than previous conflicts.

Increasingly, the prospect of some form of Iran-Saudi détente, facilitated or mediated by China, has emerged in Beijing’s foreign policy discourse. In January 2022, Foreign Minister Wang Yi hosted a series of in-person meetings with foreign ministers from Saudi Arabia, Iran, and the other GCC countries to enhance both bilateral and multilateral cooperation between China and the Middle East and North Africa, particularly in maintenance of security in the Persian Gulf. In an interview following visits from Iran, Saudi Arabia, and other GCC countries in January 2022, Wang painted an aspirational vision of a collective security mechanism in the Persian Gulf, noting that China was “actively mediating” Gulf actors toward consensus around an agreed-upon regional security framework.⁶⁴Active mediation, in this case, is perhaps better described as intensive facilitation, in which Beijing urged the Gulf countries toward dialogue and proposed the mechanism in which it occurs. In 2022, Wang Yi again proposed to Arab ministers at the Eighth Ministerial Meeting of the China–Arab States Cooperation Forum an upgraded security architecture for the Persian Gulf, based in President Xi’s “Global Security Initiative,” unveiled during an April 2022 speech at the Boao Forum.⁶⁵

China’s proposed security mechanism offers to facilitate regional cooperation and consensus-building through a sequenced multitrack dialogue. In the first stage, experts and scholars from Iran and Saudi Arabia would be invited to China to participate in a track 2 exchange, with a focus on finding a mutually agreed platform framework for higher-level engagements around Gulf security.⁶⁶ Core topics would focus on building political solutions to regional proxy conflicts on the periphery of the Saudi-Iran competition, including Yemen and Syria, in order to build basic levels of trust between Saudi Arabia and Iran. This first level of dialogue aims to facilitate participation from all Gulf parties and solicit ideas on baseline concerns, ideas, and conditions for advancing the dialogue to higher levels. Once a baseline level of trust and consensus around a framework for further dialogue is reached, China would work with Gulf actors to elevate the progress of the track 2 process to a higher-level track 1.5 process consisting of lower government officials, then gradually upgrading the level of dialogue to higher levels of government from all Gulf participants.⁶⁷

THE PATH TO SAUDI-IRANIAN RAPPROCHEMENT (2023-2024)

In December 2022, China deepened its ties with Saudi Arabia and the GCC countries after a groundbreaking China-Arab States Summit produced a wide range of new bilateral and multilateral investment and cooperation agreements. President Xi Jinping’s visit sent a powerful message that Sino-Saudi ties and Sino-GCC ties more broadly were entering a new period of rapid development.

For Iran, the strengthening of ties signaled a distinct disadvantage for Tehran in its protracted rivalry with Saudi Arabia. In a rare diplomatic move on December 11, Iran’s Deputy Foreign Minister responsible for Asia-Pacific affairs formally summoned the Chinese ambassador to Tehran to register a protest.⁶⁸ The Iranian authorities voiced their displeasure regarding specific elements of the joint communiqué that emerged from Xi’s meetings with GCC nations. Of particular concern to Tehran were the expressions of support for the GCC’s claims over disputed islands in the Strait of Hormuz. Additionally, the statement addressed the urgency of the Iranian nuclear dossier and implicated Iran in activities deemed destabilizing to the region, including the support of terrorist factions and the proliferation of drone technology.⁶⁹

In the aftermath, Chinese officials shifted toward damage control after Iran’s sharp, public rebuke of China’s position, a rare moment of divergence between Tehran and Beijing. In the buildup to Iranian President Ebrahim Raisi’s visit in February 2023, the Chinese government repeatedly expressed to Iran in direct engagement, public statements, and bilateral cooperation that it considers Tehran and Riyadh equivalent partners despite the perception that Beijing had subtly shifted toward Riyadh, at least in the near term. President Raisi was seemingly not convinced,⁷⁰ though any skepticism that may have existed would not last.

On March 10, 2023, Iran and Saudi Arabia stunned observers and announced that they agreed to a rapprochement pathway, brokered by China, which would reverse their warring status and gradually expand bilateral economic, political, and social ties over a preset period of two months. This would also include the reopening of embassies in Tehran and Riyadh. China’s role in the process left many observers in the West questioning whether this would be a watershed moment for China as a “great power mediator,” and provoked a great deal of debate among foreign policy practitioners and scholars in Washington.

China’s role—facilitating a final meeting through its good offices for Saudi and Iranian officials—was logical because Beijing sustained good, balanced ties with both sides and was likely the only great power amenable to both Iran and Saudi Arabia. China did not, however, mediate the deal. It only facilitated the final process. The real mediation work was led by Oman and Iraq over two years of intensive negotiations between Tehran and Riyadh to create an agreed-upon pathway forward which was effectively fulfilled in Beijing.⁷¹ For their part, the process required minimal effort from Chinese officials, notably Xi, because there was pre-established consensus that both parties wanted progress.

The exuberance around China’s brokered agreement was a boon to China’s public image in the region. But its improved image likely comes with greater expectations from the region’s leaders and political elites for Beijing to play a more active role in mediating the region’s other rivalries and protracted conflicts. The exuberance of Chinese officials over their perceived success drove them to make offers to mediate conflicts between Israel and Palestine, as well as previous offers to mediate in Syria and Yemen. These offers are not necessarily new, but the initiative behind them signaled a shift in China’s confidence.

Saudi-Iranian ties gradually advanced over 2023, but they face significant challenges in the midst of expanding regional insecurity following the Israel-Hamas war in Gaza begun in October 2023. This conflict, which has brought Iran, its proxies, Israel, and the United States closer to regional conflict, will be another major test of the durability of China’s facilitated agreement, or, perhaps more realistically, a major test of the willingness of Iran and Saudi Arabia to hold to their committed rapprochement.

Meaningful Mediation or Strategic Facilitating?

In the Persian Gulf, Beijing’s response to various crises over the past two decades reflects a hesitancy to play the role of traditional mediator and a preference for the role of facilitator. Over iterative crises, Beijing has utilized facilitation to project an image of itself as a willing mediator through high-visibility engagements and interactions, including hosting P5+1 talks in Shanghai and proposing a new regional security platform at the UN Security Council, while avoiding entanglement in the substance. Beijing has instead focused its diplomatic efforts on creating the space for dialogue, rather than defining the substance of it. In this way, it preserves its strategic balance between Tehran and Riyadh while continuing to build ties with both sides.

China’s leadership has leveraged its neutrality to advance continuous diplomatic messaging around nonintervention and respect for national sovereignty, which, to an extent, has bolstered its image among Gulf countries as an impartial actor, willing to engage without the preconditions or geopolitical interests of the West. These core messages include the following: First, there is no power vacuum in the Middle East, and regional powers are “the masters of their future and destiny in the region.”⁷² Second, the future of Gulf security and the pathway to stability between Saudi Arabia and Iran rests firmly in the hands of Gulf countries.⁷³ Third, Gulf security in the region can be accomplished without the implementation of Western models or Western powerbrokers.⁷⁴ And, finally, a Chinese-facilitated regional security dialogue could be an avenue for solving regional security issues through political resolutions and diplomacy.⁷⁵ China has advertised its proposed Gulf security dialogue mechanism as an effective means for escaping the region’s security dilemma, in which both Saudi Arabia and Iran perceive the other as a zero-sum competitor in absolute terms.

Beijing’s messaging around the Gulf security platform challenges the overarching narrative among many observers, especially in the West, that the absence of U.S. influence would generate a regional power vacuum. Foreign Minister Wang Yi, in his 2022 speech to Gulf member states at the Middle East Security Dialogue, challenged this narrative, and instead argued that local ownership over Gulf security through a China-facilitated security platform could solve the region’s insecurity. Wang Yi’s proposal seems to depart from assumptions held by some policymakers in the West that China does not seek to subvert U.S. presence or influence in the region. It further suggests that China’s diplomatic approach, coupled with buy-in from Iran and Saudi Arabia, could reduce or even replace the role of the U.S. and need for Western forces in the region.

It is generally accepted that both Iran and Saudi Arabia recognize China’s future role in the region and potential as a neutral third-party facilitator. Facilitative diplomacy has enabled Beijing to project itself as a neutral actor, while also protecting its regional interests in the short term. However, in the long term, China has publicly postured itself as a “potential” mediator for the Gulf crisis, whose actual mediation activities will be severely limited to facilitating dialogue, constrained by the need to balance relations with Tehran and Riyadh.

China, however, has yet to provide any meaningful guarantees to offset the concerns of Tehran and Riyadh, particularly in the realm of security. One of the primary miscalculations in China’s perspective on the Gulf crisis is the extremity of the security dilemma at play in the Gulf. Among the primary drivers of the Iran-Saudi rivalry, military competition, which has proliferated into a regional competition for influence among neighboring states and nonstate actors, continues to be one of the major impediments to resolution.

Overcoming the insecurities of both sides requires a significant degree of mutual trust, a significant task that Beijing may struggle to achieve as a result of its desire to maintain the perception of neutrality. Neutrality, however, has hindered Beijing from actively drawing the proverbial line in the sand when it comes to broader regional escalation, whether condemning Saudi Arabia’s military campaign in Yemen or Iran’s support for proxies in neighboring states, which have actively targeted critical civilian infrastructure. U.S. support for the Arab bloc, namely in equipping partnering countries with sufficient defense and deterrent capabilities to defend against Iranian-linked security threats, has become a cornerstone of many nations’ foreign policies. It could also be argued that China’s economic support to Tehran has enabled Iran to sustain its ongoing conflict escalation with GCC states. It is yet to be seen if Beijing has both the means and will to exert the political tools necessary to wrangle the tangled insecurities and interests of both Iran and the GCC, in the event of an eventual decrease in U.S. involvement in the Gulf. In the end, China’s leadership has learned the merits of strategic patience and gradual fine-tuning in its foreign policy through a number of crises, and the Saudi-Iran rivalry is no exception. The difference, however, lies with the existential risks associated with any missteps in mediating the rivalry.

Conclusion

China’s future, to an extent, will be shaped by its ability to balance diplomatic relations with Saudi Arabia and Iran so long as energy and economic interests drive Beijing’s Middle East policy. Beijing, however, is not pressed for time to bring a final resolution to the crisis in the Persian Gulf; rather, it retains sufficient space, time, and maneuverability to ensure that its approach to Iran and Saudi Arabia serves its broader strategic interests. The challenge Beijing faces in the near term is maintaining an image as a neutral actor both in its dealings with the two governments and when it is called upon by regional powers to take a more active mediation role. There are limits to the utility of Chinese facilitation, particularly if more acute security concerns from Riyadh and the GCC over Iran prompt future escalations. While Saudi-Iranian negotiations in 2021 prompted hope for progress toward a new Iran Deal, a shift in U.S. policy toward the Middle East could undo this. This is particularly important if a U.S. Republican administration, such as Donald Trump, is elected in 2024. The resumption of an anti-Iran policy could strengthen U.S. cooperation with Saudi Arabia on regional security and, again, heighten pressure on Iran, engendering another period of escalation.

China is likely to sustain both near-term and long-term strategies in which it will bolster cooperation with the GCC countries, which while under the geopolitical influence of the United States remain China’s most important oil providers in the short to medium term. Beijing will also advance energy cooperation with Iran to create a more predictable energy supply that is insulated from U.S. pressure.

To sustain this strategy, Beijing is aligning its overseas BRI energy investments with Saudi Arabia and is already undergoing strategic outreach to Saudi Arabia post-pandemic to offset its immediate energy insecurity. And, for its part, the Kingdom has begun to acquiesce to China’s overtures. Crown Prince Mohammed bin Salman invited President Xi to visit in person at the conclusion of several major oil and energy deals in 2022, and extended a rhetorical offer to accept Chinese renminbi as payment, rather than dollars.⁷⁶ Saudi Arabia’s influx of oil revenues as a result of the war in Ukraine have made it a logical choice for Chinese investment, as has Saudi Arabia’s political willingness to work with Beijing on energy, economic, and geostrategic issues.

Building Iran’s long-term potential is a high-risk, high-reward investment. In the long term, Beijing’s ongoing cooperation with Iran carries within significant image risks. Any benefits China brings to its relationship with Iran may be perceived as potential threats to Saudi Arabia. This is particularly relevant to Chinese defense cooperation with Iran’s Islamic Revolutionary Guard Corps–dominated military industry, such as drones and missile technology, as outlined in the 25-year cooperation agreement. The production or acquisition of new or advanced weapons as the result of Iran’s relations with China, from the Gulf perspective, could be deployed against GCC critical infrastructure, raising the risks of escalation. Since 2020, an escalation of Iranian attacks against GCC infrastructure has heightened this concern, and, to some extent, pushed the GCC and the United States to realign defense priorities and expand cooperation to combat Iranian threats. Beijing will continue to factor these dynamics into its balancing act with Iran and Saudi Arabia.

source : stimson