Saudi-led rift with Qatar casts shadow over China’s Silk Road ambitions

Mist over DohaThis week’s decision by a number of Arab states led by Saudi Arabia to cut all diplomatic ties with Qatar is threatening to complicate Chinese efforts to develop a modern Silk Road trade route between Europe and Asia, according to analysts.
On Monday, Bahrain, Egypt, Yemen and the UAE joined Saudi Arabia cutting ties and have also announced plans to cut all air and sea traffic with the peninsular Arab country, citing Doha’s alleged links to terrorism (which Qatar denies). Saudi Arabia also confirmed its intention to shut the land border between the two states, cutting the gas-rich nation off from the rest of the Arabian peninsula.
The worsening relations among the Gulf states will have caused consternation in Beijing, which sees the region as an important link in its One Belt One Road project, partly because of its key strategic position between Asia and Europe, partly because it needs its oil and gas to help fuel its increasingly industrialised and urbanised economy. and partly because the Gulf countries in particular have become a lucrative source of infrastructure projects for China’s construction and civil engineering contractors. 
“China has a huge economic interest in the Middle East,” Pang Zhongying, a senior fellow at the Ocean University of China in Qingda, told the South China Morning Post. “With the belt and road and other initiatives it is using to expand geopolitical influence in the region, China may need to think about adjusting its ‘non-interference’ diplomatic motto.”
 “These countries’ cutting of their diplomatic relationships with Qatar marks the beginning of a new round of chaos, even conflicts and war, in the Middle East,” predicted Zhu Bin, an analyst at Southwest Securities.
In 2015 Saudi and Qatari exports to China totalled $5.61bn and $5.24bn respectively, and imports $23.97 and $3.7bn. In June 2015, ICBC became the first Chinese bank with a retail presence in Saudi Arabia when it opened a branch in Riyadh while a month earlier,China established a yuan clearing centre in Qatar – its first in the Middle East.
Earlier this year, China and Saudi Arabia signed a memorandum of understanding on investment cooperation valued at US$65bn including joint efforts in energy and finance. China has also signed a partnership with Saudi Arabia for the manufacture of CH-4 unmanned drones. In 2016, China’s Cosco Shipping Ports invested US$400m in building a container terminal in the UAE capital Abu DhabI.
China has traditionally stayed out of political issues in the Middle East, preferring not to pick sides in an effort to maintain good relations with all its trade partners; but that may be changing as its links with the region strengthen. In April 2015, a Chinese frigate helped evacuate 225 foreign nationals from Yemen – the first time China’s military has helped other countries evacuate their people from a danger zone.
 
Source: scmp