I am excited to introduce my new Middle East & North Africa: Critical Minerals Tracker (MENA-CMT), part of the expanding Rihla ATLAS initiative, maps the region’s accelerating transformation into a pivotal player in the global critical minerals landscape.

As the global energy transition intensifies, critical minerals is emerging as a key battleground for U.S.–China competition, with both powers channeling billions of dollars into securing supply chains, industrial capacity, and long-term resource access. The Middle East has sought to capture this market.

Critical mineral markets are becoming central to the Middle East’s economic strategy as governments pursue diversification, industrialization, and leadership in clean energy technologies. The rising global demand for materials like lithium, cobalt, copper, nickel, and rare earth elements—essential to electric vehicles, battery storage, and advanced manufacturing—is reshaping trade and investment patterns worldwide.

Gulf states, particularly Saudi Arabia and the UAE, are aggressively investing on multiple fronts. Domestically, they are localizing extraction, processing, and downstream manufacturing to lay the foundations for new industries like battery and microchip production. They are leveraging ports, industrial zones, and sovereign wealth capital to accelerate their share of the critical minerals value chain and build economic incentives for companies to relocate to the Middle East. Internationally, the Gulf region is attracting inbound investment through joint ventures and partnerships with both the U.S. and China, while deploying outbound capital into mining ventures abroad to secure long-term resource access. More specifically, the MENA-CMT data shows Saudi Arabia and the UAE, in particular, are investing billions into projects across Africa, acquiring stakes in key assets and forging partnerships with Chinese, American, and European firms to embed themselves in global value chains. This trend began over the past few years, but has accelerated since the beginning of 2025.

China’s dominance in this space is striking: it controls approximately 60% of rare-earth mining and 90% of rare-earth processing globally, processes 67% of lithium, 73% of cobalt, 70% of graphite, and 95% of manganese. China also leads battery component manufacturing, producing 87% of global cathodes, over 91% of anodes, and assembling 70% of the world’s battery packs. Beijing is using its head start to expand business with GCC countries on critical minerals. Meanwhile, experts in the region see benefit in further deepening Sino-GCC cooperation.

The U.S. trails China in many aspects of critical minerals production and processing and is heavily reliant on foreign imports for many of its critical mineral commodities. According to the U.S. Geological Surviey, of the 35 mineral commodities deemed critical by the Department of the Interior, the United States was 100 percent reliant on foreign sources for 13 in 2019. The U.S. is now moving to deepen ties with Gulf states to jointly secure future supply chains and bridge the gap with China. It was a focal point of President Donald Trump’s visit to Saudi Arabia in May. During the visit, Washington and Riyadh signed a new MoU and a series of investment agreements aimed at building joint capabilities in mineral mining and processing.

For their part, GCC countries are positioning themsleves as a critical platform for China, the U.S., and other countries who are seeking to diversify and secure supply chains for energy transition technologies. Regional leaders recognize that critical minerals are becoming both a central arena of geopolitical competition as well as a long-term economic pillar in their own energy transition agendas. Gulf states are on track to capitalize on this shift by capturing more of the supply chain domestically, securing mining assets globally, and leveraging this position for long-term economic advantage.

The Tracker seeks to capture this transformation by documenting key deals, partnerships, and infrastructure developments across extraction, processing, and manufacturing. As the energy transition reshapes the global economy, The MENA region is positioning itself as a vital hub at the crossroads of resource security, industrial policy, and great power competition.

Evacuations are now a core function of China’s global presence and operations. They are embedded in PLA planning, foreign ministry protocols, and public diplomacy. As China’s footprint deepens, so will demand for more agile, capable, and integrated crisis responses. To meet the demand, Beijing will continue to invest in enhancing its mobility, logistics, intelligence, and diplomatic coordination in conflict areas.

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On June 23, China announced the completion of one of its largest and most complex overseas evacuations since the Libya crisis in 2011, safely relocating an estimated 3,125 Chinese nationals from Iran amid rising regional tensions. The operation, coordinated by the Chinese government and its embassies, also included the evacuation of over 500 Chinese citizens from Israel, alongside foreign nationals from the United Kingdom, India, and Poland. With logistical support from Iran, Azerbaijan, Turkmenistan, Armenia, Turkey, Iraq, the United Arab Emirates, Oman, Kuwait, Egypt, and Jordan, China executed the mission swiftly and without reported incident. According to the Foreign Ministry, all Chinese citizens who requested evacuation have been relocated, while those choosing to stay have been advised to prioritize their safety. Chinese diplomatic missions in Iran and Israel remain operational to support those still on the ground.

This latest evacuation highlights a deeper structural challenge for Beijing. As China’s global footprint has expanded through the Belt and Road Initiative, much of its engagement across the Middle East has centered on fragile states—drawn by cheaper access to raw materials, energy reserves, and emerging markets. These economic bets have increasingly exposed Chinese nationals and assets to conflict, political volatility, and post-war instability. China’s first and chaotic mass evacuation from Libya in 2011 marked the emergence of a recurring vulnerability that has since played out in Yemen, Sudan, Lebanon, and now the broader Iran-Israel conflict zone. The latest escalation underscores just how exposed Chinese interests have become.

Framing China’s Noncombatant Evacuation Operations

Beijing’s approach to non-combatant evacuation operations (NEO) have become increasingly important over the past fifteen years as Beijing’s regional expansion has meant more Chinese citizens staffing Chinese projects. Chinese scholars define China’s approach to NEOs as the Low-Level Political Priority Model, an approach which elevates the safety of overseas citizens at the same strategic importance as more strategic issues like military and political security objectives. In practice, this approach involves the state prioritizing its coordination the evacuation of Chinese nationals without imposing any financial costs on them. If you are a Chinese national who wants to leave a hostile environment, Chinese authorities will find a way.

The evacuation of Chinese citizens has evolved from an occasional operation to a more routine and systematic process within China’s diplomatic services. More specifically, Chinese scholars underscore that Chinese authorities are investing more resources for the protection of Chinese citizens in the Middle East after responding to a growing number of NEOs. Zhang Dandan and Sun Degang highlight that Chinese authorities have built a comprehensive consular protection system spanning risk prevention, emergency preparedness, crisis response, and logistical support.

For major overseas security incidents, the State Council establishes an inter-ministerial joint conference, which is typically led by the Ministry of Foreign Affairs. For example, during the 2011 Libya evacuation, the State Council formed an emergency command headquarters, with Vice Premier Zhang Dejiang as commander and State Councilor Dai Bingguo responsible for specific coordination. This headquarters included personnel from multiple ministries such as the Ministry of Foreign Affairs, Ministry of Public Security, Ministry of National Defense, Ministry of Commerce, Ministry of Transport, Ministry of Agriculture, State-owned Assets Supervision and Administration Commission, Chinese Customs, and the Civil Aviation Administration. This “big consular protection” model is centered on the Ministry of Foreign Affairs and coordinated across multiple agencies. It also features a “five-in-one” emergency response mechanism that links the central government, local authorities, overseas missions, Chinese enterprises, and individual citizens.

Libya

When the Libyan civil war erupted in 2011, China faced the stark reality of what Hu Jintao’s "going out" strategy of outbound Chinese investments would mean in practice. Throughout the 2000s, Chinese state-owned enterprises had aggressively secured contracts in Libya’s oil and infrastructure sectors. These ventures brought tens of thousands of Chinese workers into the country, drawn by the promise of high returns in what was then perceived as a politically stable, resource-rich environment. As a result, approximately 35,000 Chinese workers, primarily employed by state-owned enterprises in oil, construction, and infrastructure projects, were trapped in an active war zone. As conditions rapidly deteriorated, the safety of Chinese nationals became Beijing's responsibility after state control in many parts of the country collapsed to non-state actors.

China's deployment of PLA Navy frigates and military transport aircraft to evacuate these workers marked a watershed moment. For the first time, China used military assets in a distant conflict zone to rescue Chinese nationals working abroad as part of China’s global economic expansion. This operation established several critical precedents. It demonstrated that protecting Chinese workers could justify the deployment of PLA forces to war zones for peacetime operations, effectively redefining the practical limits of non-interference in areas of state collapse. It also created domestic expectations that the Chinese state would protect its overseas workers regardless of geopolitical complications. And finally, it revealed how dependent China's overseas economic strategy had become on the safety and continuity of large concentrations of Chinese workers in unstable regions.

Yemen

Just four years later in 2015, when Saudi-led coalition airstrikes targeting Houthi rebel advances threatened Yemen’s stability, China again found itself with significant numbers of nationals at risk. PLA Navy vessels quickly deployed to the Yemen coast and evacuated 571 Chinese citizens. While smaller in scale than Libya, the Yemen operation was significant for two reasons: it included the evacuation of foreign nationals from 15 other countries, and it helped reinforce China’s image as a “responsible major power” willing to provide public goods during crises.

The Yemen case also underscored China's growing exposure to Middle East instability. Prior to the conflict, Chinese construction and infrastructure companies had operated in Yemen for years without major incident. In 2008, Xi Jinping visited Yemen and praised the favorable conditions for scaling bilateral investment and cooperation. Yet in 2015, those same commercial assets became immediate security liabilities.

The evacuation highlighted the operational constraints China faces in unstable environments. The rapid deterioration of security conditions left no time for any planned or gradual withdrawal. Yemen’s airspace was closed, airports were damaged, and Chinese aircraft were unable to land or take off. Chinese nationals—scattered across the country—had to reach Sana'a and Aden by ground travel, were transported by bus to Hodeidah and Aden ports, and then evacuated by sea aboard the PLAN’s Linyi, Weifang, and Weishanhu vessels to Djibouti in batches. In their account of the evacuation, scholars underscored this was the first time that China has used warships as the main means of transportation to evacuate Chinese expatriates from the Middle East. The operation not only marked a shift in China's non-combatant evacuation strategy but also demonstrated its growing willingness to deploy military assets in support of overseas civilian protection under complex security conditions.

In the five years that followed, Beijing shifted from emergency response to strategic risk mitigation. It vastly expanded its Middle East footprint by investing billions into more stable parts of the region—particularly Saudi Arabia, the UAE, and the broader GCC. At the same time, Chinese officials increased efforts to reduce the risks to these investments by encouraging regional rivals, notably Iran and Saudi Arabia, to de-escalate tensions. The logic was clear: a more stable Gulf reduced the likelihood of conflict that could threaten Chinese personnel and infrastructure.

The convergence of interests between GCC countries, who also sought to reduce the risk of a Gulf military conflict, Iran, and China drove progress toward a Saudi-Iranian rapprochement, and for several years helped sustain dialogue and diplomatic means for depressurizing the region. These channels remained critical for navigating the Gaza war, Israel’s invasion of Lebanon, Israeli strikes on the Houthis, and Iran’s removal from Syria following the collapse of the Assad government.

Sudan

​​When war erupted in Sudan in 2023, China faced a more complex evacuation challenge than in previous crises in Libya or Yemen. Chinese nationals in Sudan were widely dispersed due to the breadth of Chinese enterprise operations across multiple sectors and regions. China’s presence in Sudan was also deeper and more historically rooted, with long-standing infrastructure, energy, and development investments. This made coordinated evacuations significantly more difficult.

Reaching extraction points required long and dangerous overland travel. Some Chinese nationals journeyed over 1,000 kilometers through the desert to reach the Egyptian border, while others traveled up to 850 kilometers to Port Sudan on the Red Sea. In response, the PLA Navy diverted two vessels—the guided-missile destroyer Nanning and the supply ship Weishanhu—from anti-piracy patrols in the Gulf of Aden. These ships evacuated Chinese and foreign nationals from Port Sudan and transported them to Jeddah, Saudi Arabia.

The presence of PLA forces in the region—including the Djibouti logistics base—proved critical. Chinese naval personnel provided coordination and security support at key maritime departure points. However, the geographic scale of the crisis limited their reach. Many Chinese citizens in remote areas were left to self-organize transportation to reach coastal extraction zones. Unlike other major powers, China did not deploy helicopters or military aircraft at scale to reach individuals stranded inland.

In total, Beijing evacuated 1,171 people, including 940 Chinese nationals and 231 foreign nationals from ten countries. Analysts noted that China’s approach in Sudan reflected a maturing doctrine for non-combatant evacuation operations. Beijing relied on private security contractors, commercial vehicles, and negotiated safe passage with all conflict parties. Open communication and local coordination helped avoid direct confrontation and ensure smoother extractions.

The operation also reinforced the strategic value of China's military presence in the region. The Djibouti base enabled rapid naval deployment, overcoming the logistical delays seen in the 2011 Libya operation when China lacked a nearby support platform. Sudan demonstrated that China is shifting from reactive crisis response to a more institutionalized model for protecting its citizens and assets overseas—grounded in forward military positioning, flexible logistics, and multi-stakeholder coordination.

From Single Event to Persistent Risk

The 2023 evacuation from Sudan exposed the logistical complexity of extracting Chinese nationals from conflict zones with widespread SOE activity. But by late 2024, the nature of the threat to China’s overseas citizens had evolved—from isolated crises to a persistent, region-wide security environment driven by overlapping flashpoints across Gaza, Lebanon, Syria, and the Gulf. Since the start of the Gaza war in 2023, China has been forced to adapt to a Middle East marked by simultaneous and protracted conflict. Escalations between Israel and Iran, Israel and Hezbollah, and flare-ups across Gaza, Lebanon, and Syria created layered, transnational threats to Chinese nationals. These overlapping crises have tested Beijing’s capacity to track, coordinate, and protect its global civilian footprint in volatile and fast-moving conditions.

On October 5, 2024, the Chinese government evacuated over 200 nationals following a sharp escalation in conflict between Israel and Hezbollah in Lebanon. This marked a significant shift in Beijing’s approach. Unlike in Libya in 2011, where China acted only after state collapse, the Lebanon evacuation was preemptive—authorities intervened before full-scale war made evacuation impossible. Two months later, China faced another challenge in Syria. As the Assad government collapsed in December 2024, Chinese authorities issued urgent advisories calling on nationals to leave while Damascus International Airport remained open. Many fled by land into Lebanon. Notably, Beijing did not organize a formal evacuation; instead, the Chinese embassy remained operational even after the fall of Damascus, continuing to provide consular assistance to those who had not yet evacuated.

The next major escalation occurred in June 2025, as tensions between Israel and Iran exploded into open confrontation. On June 13, Israel launched one of the most sweeping military operations the region has seen in decades, striking dozens of targets across Iran—including nuclear facilities, IRGC bases, and key personnel. The result was an intense exchange of missile strikes and covert operations that plunged both countries into crisis and threatened to drag the wider region into war. This demanded real time decision making from Chinese authorities. They responded quickly. With Israeli airspace closed, Chinese diplomats arranged overland evacuation via the Taba border crossing, moving hundreds of nationals into Egypt. In Iran, China evacuated over 1,600 citizens through land routes into Turkey, Armenia, and Iraq, while warning of border congestion. Over all, Chinese authorities helped evacuate over 3,000 nationals from the region. For now, the war has calmed following a fragile ceasefire, avoiding a worse crisis which could have forced a broader evacuation Chinese nationals from the Gulf countries, like the UAE where an estimated 400,000 Chinese expats reside.

These overlapping operations reflect an important evolution in Beijing’s crisis response. Compared to Libya, Yemen, or Sudan, China must now navigate transnational conflicts and multi-theater emergencies occurring simultaneously. This requires more dynamic embassy coordination, deeper local-level contextual knowledge, and contingency planning that factors in simultaneous threats across multiple states.

Learning from the Evacuations

China’s approach to overseas crisis response has evolved from improvisation to institutionalization, driven by repeated evacuations and rising exposure to fragile environments. Yet the core challenge remains: how to protect Chinese nationals in unstable regions without becoming entangled in those conflicts. This reflects the tension between China’s expanding global presence and the risks it entails.

The 2011 Libya evacuation was the turning point. It brought non-combatant evacuation operations to the forefront of China’s military planning and marked the first large-scale deployment of military assets to evacuate civilians from a distant warzone. It established the precedent that the Chinese state—and increasingly the PLA—would take responsibility for overseas citizen protection. But the operation was reactive, with little forward infrastructure, minimal coordination, and weak intelligence. It exposed critical gaps in China’s ability to project power and manage large-scale overseas operations. These shortcomings spurred reforms. Libya became a case study in what China needed to build to protect overseas interests, assets, and personnel: a blue-water navy, better overseas logistics, and greater airlift capability. The PLA Navy expanded with more versatile platforms, including amphibious assault ships and aircraft carriers. The Y-20 transport aircraft significantly improved the PLA Air Force’s responsiveness and reach.

By 2015, the Yemen evacuation was faster and more assertive. Naval assets were deployed earlier, and China evacuated both its own and foreign nationals, projecting itself as a more capable and responsible military force. Yet limitations remained: airspace closures and damaged infrastructure forced reliance on sea routes, and evacuees endured long overland journeys to reach ports. Still, it showed China’s growing confidence and willingness to act, albeit within a narrowly defined scope.

The Sudan evacuation in 2023 posed a more complex challenge. Chinese nationals were dispersed across the country due to widespread commercial activity. The evacuation required decentralized coordination, overland travel, and use of civilian contractors. China’s naval base in Djibouti proved valuable, allowing quicker deployment of assets. Yet the absence of a Chinese forward-deployed airlift capacity and difficulties reaching citizens in remote areas highlights continuing limitations.

By late 2024, a more anticipatory posture emerged with overlapping conflicts in Syria, Lebanon, Gaza, Israel, and Iran. The Lebanon evacuation, launched in anticipation of a full collapse of security conditions, marked a shift toward earlier action and improved threat assessment. In contrast, the Syria case weeks later highlighted the limits of that posture. Beijing has little advance notice of developments in Syria. As Damascus fell, China opted against a formal evacuation, instead issuing advisories and maintaining a diplomatic presence.

The 2025 Iran-Israel conflict sharpened these lessons. China conducted dual evacuations under the conditions of active military operations and closed airspace, requiring tight coordination with neighboring states. Embassy staff moved swiftly, messaging was consistent, and the effort remained diplomatically low-profile. It was China’s most geographically and diplomatically complex evacuation yet and reflected the maturity of its evolving crisis response capacity.

Across these cases, three trends stand out. First, China’s response speed has improved—from delayed action in Libya to anticipatory efforts in Lebanon and synchronized extractions in Iran and Israel. Second, its methods have diversified. Naval assets remain central, but land convoys, diplomatic coordination, and commercial partnerships are now key tools. Third, diplomatic-military integration has deepened. The PLA has become a formal instrument of overseas citizen protection.

Still, constraints persist. China lacks global airlift and forward-deployment capabilities comparable to other major powers. Its nationals are often in isolated areas, complicating intelligence gathering and extraction. Border closures and infrastructure collapse further hinder evacuation efforts. Despite better planning, these factors limit China’s ability to respond quickly in dispersed or deteriorating settings—especially as it faces the prospect of multiple simultaneous crises.

What has changed is the political and strategic weight of these operations. Evacuations are now a core function of China’s global presence and operations. They are embedded in PLA planning, foreign ministry protocols, and public diplomacy. As China’s footprint deepens, so will demand for more agile, capable, and integrated crisis responses. To meet the demand, Beijing will continue to invest in enhancing its mobility, logistics, intelligence, and diplomatic coordination in conflict areas.

Wang Lincong from the Chinese Academy of Social Sciences gives a long interview (in Mandarin) previewing the Institute of West Asian and African Studies’ new effort to bolster Middle East studies as a strategic body of academic research for informing Chinese foreign policy in the region. In this paper, I provide an overviw of many of the key points from the interview.

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Chinese scholars on the Middle East are reforming their approach to Middle East scholarship. China’s Institute of West Asian and African Studies at the Chinese Academy of Social Sciences (CASS) is driving this shift by building what it calls an “independent knowledge system” for Middle East studies. The idea is simple: create a new scholarly approach which moves beyond Western theoretical paradigms which have dominated modern thinking on the Middle East and, instead, applies China’s worldview and theoretical paradigms to the field of Middle East studies.

This evolution, as outlined in a recent interview with Deputy Director Wang Lincong, marks an interesting development in China's academic diplomacy. Chinese engagement in the Middle East is not a new phenomanon, but the rate at which Beijing has deepended its role over the past decade has astounded many observers, including many in China. Many Chinese institutions are responding accordingly by deepening their analytical focus on the region, investing in the training of a new generation of Chinese-Middle East scholars, and advancing indigenous research agendas.

China’s expertise on the Middle East lags far behind its political and economic interests in the region, especially when compared to the Middle East, Europe, or even Russia. But this is beginning to change as a result of the internationalization of Chinese academic institutions. However, this gap is beginning to narrow with the internationalization of Chinese academic institutions. This process is unfolding in two key ways: First, universities in China are developing more robust university programs and education resources focused on teaching students about the world through regional studies. University programs at prominent Chinese institutions are giving students first hand training on international relations, national security, global governance, and development as well as on regions critical to China’s national interests, including Africa, Middle East, and Latin American studies. This means young Chinese graduates are increasingly learning foreign languages, able to speak foreign languages, and are engaging in study abroad programs in critical regions.

Second, the reform of Middle East scholarship in China seeks to develop theories and approaches which move away western paradigms and political theories which have shaped global education on the Middle East for decades and replace them with theoretical approaches rooted in China’s own perspectives. After decades in which Western scholarship has defined global understanding of the Middle East, Chinese academics are seeking to develop an alternative discourse—one that reflects China’s strategic culture, its diplomatic traditions, and its emphasis on sovereignty, non-interference, and development.

Wang describes this transformation as part of the Institute’s mission as a “national team,” responsible for generating scholarship that supports China’s national interests while challenging the intellectual dominance of the West. This agenda aligns closely with the Chinese Communist Party’s broader effort to construct a philosophy and social sciences system “with Chinese characteristics”—a project that extends not only across domestic disciplines but into China’s engagement with the world.

Introducing New Concepts

Two of the most prominent concepts emerging from this intellectual reorientation on the Middle East are the concepts of “autonomous security” and the “dramatic long wave.”

The concept of autonomous security (自主安全), proposed by Wang, redefines how Middle East security should be understood. It rejects the notion that the region's stability should be guaranteed by external powers—particularly the United States and Europe—and instead argues that countries in the region must cultivate their own independent security capabilities. It reframes the essential questions of Middle East security: Who defines the threats? Whose interests are being protected? And for whom is security being constructed?

In contrast to Western frameworks that often prioritize geopolitical competition or external threat management, autonomous security centers the agency of Middle Eastern states and peoples. It fits neatly within China’s broader foreign policy narrative of sovereignty, non-interference, and South-South solidarity.

The second major framework, the “dramatic long wave” (剧变长波), was introduced in the 2019–2020 Middle East Yellow Book and offers a longitudinal view of the region’s post-2010 transformation. Instead of viewing the Arab uprisings and subsequent conflicts as isolated shocks, the “long wave” concept interprets these events as part of a drawn-out, complex process of structural change. It suggests that the Middle East remains in a state of unresolved flux, one that demands patience, local ownership, and systemic reform—principles that echo China’s cautious, non-interventionist approach to foreign crises.

Alongisde these concepts, Chinese scholars at the Institute have also advanced three frameworks aimed at rethinking Middle East governance from a non-Western perspective.

First, they underscore the issue of externalities in international relations. In other words, they recognize that, since the modern era, foreign powers have consistently shaped the political and security order of the Middle East. As a result, many states in the region have struggled to assert genuine autonomy or independently chart their developmental paths.

Second, they propose a multi-level framework for Middle East security governance grounded in China’s “new security concept” (NSC). At the national level, this approach calls for advancing security through development by strengthening the capacities of individual Middle Eastern states—both through self-reliance and strategic partnerships—to enhance autonomy and move away from Western-led security models. At the regional level, the NSC favors collective regional cooperation over external intervention, envisioning security as a responsibility shared among Middle Eastern states. Wang Yi has previously pointed to a Gulf security mechanism, proposed under the Global Security Initiative, as one possible model. At the international level, the framework places the United Nations at the center of global crisis response and mediation, advocating for a new, inclusive security architecture rooted in multilateralism and regional ownership.

Third, scholars introduce the concept of the “Gulf Moment” in climate governance, framing the Gulf as a critical arena for pioneering new models of environmental cooperation. This notion expands the boundaries of Middle East studies beyond conventional political and security concerns, linking climate resilience to long-term regional stability and enriching the study of governance in the region.

Serving the State, Shaping the Narrative

This emerging model of academic research on the Middle East is closely intertwined with state—and more specifically, Party—interests. As Wang emphasizes, “this is inseparable from the positioning and policy support of the Chinese Academy of Social Sciences. In recent years, the Party Committee of the Academy has been committed to promoting the development of a disciplinary, academic, and discourse system in philosophy and social sciences with Chinese characteristics. It has proposed building the Institute into an academic hub that serves General Secretary Xi Jinping and the Party Central Committee, acts as a vanguard shaping the direction of China’s academic development, and serves as a high-end platform for advancing Chinese scholarship globally in the new era. The project team has consistently taken this as its guiding vision.”

This alignment between scholarship and state strategy reveals the extent to which Party ideology shapes regional studies—and, in turn, how academic research is leveraged as an active tool of Chinese foreign policy. By channeling research into diplomacy, China cultivates its image among Arab and Middle Eastern states as a partner that respects regional agency. These emerging frameworks closely mirror Beijing’s diplomatic style, emphasizing sovereignty, mutual respect, and development over military intervention or regime change. Crucially, they offer Middle Eastern governments a narrative that affirms their pursuit of self-determination without the normative pressures of liberal internationalism–uniquely a posture Donald Trump leaned on during his recent Saudi visit.

Whether this Chinese school of Middle East studies will be adopted beyond Beijing remains an open question. But its emergence signals a new phase in China’s rise as a producer of ideas.

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If you want to learn more or are interested in a deeper dive on Chinese foreign policy in the Middle East, please reach me at jesse.marks@rihlaadvisory.com or visit us at Rihla Research & Advisory.

Full translated interview below

　In recent years, the academic community has paid increasing attention to the Middle East. From the perspective of China, the Institute of West Asian and African Studies of the Chinese Academy of Social Sciences (China African Institute) has proposed original concepts of Middle East studies in order to serve the overall national situation, explain current issues, and improve the construction of regional and country studies. This is the unshirkable responsibility and responsibility of the Institute of West Asian and African Studies of the Chinese Academy of Social Sciences (China African Institute) as a "national team". What work has the Institute of West Asian and African Studies of the Chinese Academy of Social Sciences (China African Institute) done and what gaps has it filled in building an independent knowledge system? Recently, this newspaper reporter interviewed Wang Lincong, deputy director (deputy dean) of the Institute of West Asian and African Studies of the Chinese Academy of Social Sciences (China African Institute) (hereinafter referred to as "West Asian and African Institute") on this issue.

　　Showing Chinese scholars’ “views on the Middle East”

　　China Social Sciences Today: The Institute of West Asia and Africa has long been committed to the study of basic issues. In recent years, it has achieved many outstanding results in the construction of discourse systems, and its influence has continued to rise. Could you please introduce the process of proposing relevant representative academic concepts and their academic influence?

　　Wang Lincong: The Institute of West Asia and Africa adheres to the guidance of Xi Jinping's diplomatic thought and the basic principles of Marxism, and uses this as a guide to carry out analysis of major theoretical and practical issues in the Middle East, and has put forward many concepts with certain characteristics. For example, some scholars have put forward concepts such as "transitional political stage" and "oil differential rent", which show the unique "Middle East view" of Chinese scholars and provide a strong academic explanation for many practical problems in the Middle East.

　　In recent years, the real problems in the Middle East have also undergone new turns and changes. The scholars of the Institute of West Asian and African Studies have quickly followed this change with their academic acumen and insight. The iconic concepts such as "autonomous security" and "long wave of dramatic changes" proposed by our scholars have become increasingly influential in the West Asian and African academic circles and have been widely recognized.

　　In 2016, President Xi Jinping delivered a speech at the Arab League headquarters in Cairo, pointing out that "the Middle East is a fertile land... but it has not yet escaped war and conflict. Where is the Middle East heading? This is the 'Middle East question' that the world has repeatedly mentioned." This reflects the basic position of the Chinese government on solving the Middle East issue, and also points out the direction for solving the security dilemma and development predicament in the Middle East. The Middle East region urgently needs to strengthen its independent security capacity building and explore its own development path.

　　In response to this need, and also to provide a more convincing theoretical support for the Chinese solution, the concept of "independent security" came into being. This concept was first proposed by me in the article "Security Issues and Governance in the Middle East". Its main connotation is to emphasize that Middle Eastern countries should avoid "security outsourcing", change their security strategy of relying on external forces, especially Western powers, and strengthen the construction of "security independent capabilities".

　　Different from the Middle East security research advocated by Western academia, the concept of "autonomous security" theoretically answers major questions such as "who is the main body of Middle East security", namely "whose security", "for whom to create a safe environment", "whose security is threatened", and "whose security interests are protected". It further clarifies that Middle East security refers to the security of the Middle East region, countries and people in the Middle East, rather than the so-called security of Western powers in the Middle East.

　　The academic value of the concept of "autonomous security" lies in: first, it provides Chinese scholars with an understanding of the Middle East security issue and corrects the fallacies of the Western academic community in the Middle East security research; second, it identifies the crux of the Middle East security issue and proposes that improving the ability and level of autonomous security is the fundamental way to solve the Middle East security issue. At present, the concept of "autonomous security" has gradually gained attention and recognition from the academic community, and has appeared widely in many articles and academic seminars in the academic community. The expansive and divergent discussions around this concept are also increasing.

　　The concept of "long wave of dramatic changes" is also a theoretical summary based on a systematic reflection on the current situation of dramatic changes in the Middle East and a summary of the multiple complex governance crises in the Middle East. It reflects the perspectives and thoughts of Chinese scholars on the Middle East issue and also provides theoretical support for my country's participation in Middle East affairs.

　　The concept of "dramatic long wave" was first proposed in the Middle East Yellow Book "Middle East Development Report (2019-2020): Reflections and Prospects on the Drastic Changes in the Middle East". This concept is essentially to observe the transformation and development issues in the Middle East from a long-term perspective. After the research results were proposed, they attracted widespread attention from the academic community because of their accurate summary of the long-term development status of the Middle East. The concept of "dramatic long wave" believes that since the dramatic changes in the Middle East in 2010, the development of the region has been characterized by long-term, continuous and complex characteristics, and summarizes it as a "long wave effect". So far, many Middle Eastern countries have not walked out of the "vortex of dramatic changes" and are still in a state of intertwined chaos and turmoil. It is also based on this analytical logic that the Middle Eastern countries can only gradually open the historical process of the "new Middle East" by choosing to rely on independent security, seek independent development and modernization.

　　China Social Sciences Today: In addition to these iconic concepts, what other representative achievements has the Institute of West Asian and African Studies achieved in conceptual innovation and basic research innovation?

　　Wang Lincong: At present, the Institute of West Asia and Africa has undertaken the "Contemporary Middle East Development", a strategic advantage discipline construction project of the Chinese Academy of Social Sciences. With the support of the institute, the project team coordinates the Middle East research forces of the entire institute, conducts systematic research in the fields of Middle East political and economic development, international relations, security, etc., and continuously promotes the construction of the "three major systems" of Middle East research, and has made some breakthrough progress and phased results, and has also filled many gaps at the domestic research level.

　　In terms of conceptual innovation, the first is to raise the issue of "externalities" in international relations in the Middle East, that is, since modern times, foreign powers have long dominated the Middle East order, and Middle Eastern countries are subject to the manipulation of external forces, making it difficult to lead their own development and lacking autonomy. Second, a multi-level framework for Middle East security governance is proposed, that is, taking the new security concept as the core concept, abandoning the traditional Western security thinking, promoting security through development at the domestic level, and strengthening the construction of independent security capabilities; promoting security through cooperation at the regional level, with mutual security and shared risk management as the goal, abandoning the exclusive security framework, and promoting the construction of a collective security mechanism; at the international level, the United Nations is the main body, strengthening the control and coordination of security crises, promoting the establishment of a new Middle East security order, and achieving overall security in the Middle East. Third, the "Gulf Moment" of climate governance is proposed, enriching and expanding the breadth and depth of Middle East governance research.

　　In terms of innovation in basic research, the construction projects of advantageous disciplines focus on basic issues of Middle East development. The "Overview of Contemporary Middle East Development", "Yearbook of Chinese Middle East Studies" and "Middle East Studies in China in the 21st Century" are being compiled, and new breakthroughs have been made in the research on the development path and modernization of Middle Eastern countries. For example, "Historical Study of the Libyan Tribal Issue" studies the tribal issue from the perspective of political development and puts forward the "dual role" of tribes in the historical development process of the Libyan nation. "Research on Military-Political Relations in Arab Countries - Taking Republican Countries Such as Egypt, Iraq, Yemen and Lebanon as Examples" deeply studies the types, characteristics and evolution of military-political relations in Arab countries, and effectively refutes the erroneous arguments and understandings of Western scholars in this field. "Research on Relations between India and Middle Eastern Countries" comprehensively sorts out the historical exchanges and changes between India and the Middle East, and fills the weaknesses and gaps in the domestic research on this issue. "From Extreme to Moderate: Saudi Religious Change and Its Influence", "Evolution and Roots of Traditional Political Thought of the Twelver Shiites" and "Ansari on Divine Power" demonstrate the driving force of change in Islamic countries, the historical development of Islamic thought and its current impact.

　　Advancing basic research and

　　Integrated development of applied research

　　"China Social Sciences News": As the influence of these original achievements continues to expand, what are the academic innovations and their practical value based on these basic research works?

　　Wang Lincong: The project team of advantageous disciplines insists on applying research to practice, serving the people through academic research and serving the country through scientific research. With the purpose of serving the national interests, we actively explore new paths for the integrated development of basic research and applied research.

　　First, expand the social impact of academic achievements. The research results of the project team members have been widely praised in the academic community. The paper "Security Issues and Governance in the Middle East" was reprinted in full in the 5th issue of Xinhua Digest in 2018, and won the third prize of the Excellent Scientific Research Achievements of the Chinese Academy of Social Sciences. The paper "Marxist View of the Times and the International Environment for the Development of Middle Eastern Countries" was reprinted in the 2nd issue of Chinese Social Science Digest in 2017. "Friendly Cooperation between China and Egypt" won the 2019 National Think Tank Report Excellence Award.

　　Second, we actively accelerated the transformation of results and provided theoretical support and services for decision-making. Guided by policies, the institute continuously encouraged its researchers to give full play to their professional expertise, strengthen the topic planning and writing of information reporting, and achieved good results in improving policy-making capabilities. Several information reporting results received good feedback and won the special prize, first prize and second prize of excellent decision-making information of the Chinese Academy of Social Sciences.

　　Third, the acceleration of talent team building has been effective. At present, the institute has established a high-quality discipline team through collective project research and the role of "teaching, helping and guiding". It has accumulated certain experience and achieved many results in enhancing the academic influence of senior researchers, promoting the healthy progress of middle-aged scholars, and cultivating a reserve team of outstanding young talents.

　　China Social Sciences Daily: In your opinion, what are the background and conditions for the production of these original results? Why can the West Asia African Research Institute produce these innovative results? What experience does the West Asia African Research Institute have in allocating resources and guiding scholars to carry out scientific research?

　　Wang Lincong: First of all, this is inseparable from the positioning and policy support of the Chinese Academy of Social Sciences. In recent years, the Party Committee of the Academy has been committed to promoting the construction of a discipline system, academic system, and discourse system of philosophy and social sciences with Chinese characteristics, and proposed to build the Institute into an academic town serving General Secretary Xi Jinping and the Party Central Committee, a flag array leading the direction of China's academic development, and a high-end platform for Chinese academic "going out" in the new era. The project team has always taken this as a guide, striving to do a good job in building an independent knowledge system of Middle East studies with Chinese characteristics, and actively carrying out the construction of "two towns (arrays) and one platform".

　　Secondly, this comes from the academic heritage of the Institute of West Asian Studies and Africa. Since the establishment of the Institute of West Asian Studies and Africa in 1961, the Middle East discipline has developed over half a century and has become a scientific research team with the largest scale and high comprehensive quality in China. It has produced many scholars with important influence in the academic community and published a large number of research results with important academic and social influence, thus forming a dominant discipline in Middle East studies covering multiple fields such as politics, economy, international relations, ethnicity and religion.

　　Secondly, follow the laws of scientific research, strengthen scientific research planning, and carry out organized scientific research in depth. On the one hand, gather the strength of the team, focus on major issues, strengthen forward-looking planning on the basis of respecting the research expertise of members, and promote the implementation of research with strong execution. Adhere to the combination of orthodoxy and innovation, and encourage scholars to conduct innovative research on the basis of a broad understanding of the academic history of research topics. Adhere to the combination of breadth and specialization, and encourage scholars in the institute to continue to develop in a sophisticated direction based on their own research fields on the basis of a full understanding of the basic problems, methods and theories of the discipline. On the other hand, the leadership team of the institute attaches great importance to and supports the construction of advantageous disciplines, and provides the project team with sufficient talent support and institutional guarantees to ensure that the project team can grasp and implement organized scientific research.

　　Finally, with the goal of building an academic brand and constructing an independent knowledge system of Middle East studies with Chinese characteristics, we will lead the construction of an academic community for Middle East studies in China. Over the years, the “Annual Review and Outlook of the Middle East Situation” seminar held continuously in the institute has become a well-known brand in the domestic Middle East academic community. At the same time, relying on the Chinese Society of Middle East Studies, we will drive the construction of disciplines within the institute through the national Middle East academic organization platform and jointly build an academic community for Middle East studies in China. In addition, we will expand international communication channels, actively participate in the construction of the Middle East research community in the international academic community, organize international academic seminars of the Federation of Asian Middle East Societies, etc., and continuously enhance the academic influence of the West Asia Africa Institute at home and abroad.

China’s rise, accompanied by the concurrent growth of other BRICS economies—Brazil, Russia, India, and South Africa—is driving a global shift toward regionalization, reshaping the way states approach technology, economy, and governance. The Middle East is at the intersection of this emerging dynamic. China's Belt and Road Initiative (BRI) draws regional institutions, particularly the Arab League and the African Union, into strategic partnerships with Beijing by offering digital infrastructure and technology cooperation to countries which cannot afford it. This has positioned China as a leading player in the region’s 5G infrastructure, AI industries, and cross-border digital connectivity.

Intensifying U.S.-China technological competition is pressuring Middle East states to align with one of two competing digital models: the U.S.-led ecosystem or China’s Digital Silk Road (DSR), defined by centralized state control and tightly managed networks. In this polarized landscape, Middle Eastern states—particularly in the Gulf—must navigate complex choices, weighing short-term economic gains against long-term strategic risks in shaping their digital futures. Middle Eastern countries want digital sovereignty, but obtaining requires exposing themselves to a large degree of political vulnerability. At its core, digital sovereignty for Middle Eastern states means achieving sufficient control over a state’s digital infrastructure and data governance to ensure national security, economic resilience, and geopolitical autonomy.

How do Arab states balance economic incentives and strategic risks while navigating competing U.S.-China technological ecosystems to enhance digital sovereignty without exposing themselves to political vulnerabilities?

What is China’s Digital Silk Road?

China’s Digital Silk Road (DSR) is a central feature of the Belt and Road Initiative (BRI). The DSR is a conceptual umbrella which outlines a series of technology and digital initiatives which, when combined, have the potential to expand China’s influence by equipping countries with the digital infrastructure they need to modernize and broaden Beijing’s technology ecosystem, as well as the norms that come with it. Through companies like Huawei, ZTE, and Alibaba Cloud, Chinese companies are rolling out 5G networks, fiber-optic cables, data centers, and AI-driven smart city technologies across emerging markets, particularly in the Middle East, where digital infrastructure remains relatively weak. For many states, these investments provide an opportunity to affordably leapfrog into the digital economy by developing and adopting e-government services, expanding internet access, and bolstering e-commerce capabilities for local digital ecosystems and economies. Beijing’s relative success with some countries has embedded China’s digital footprint into key regions and enabled states to develop and govern their own technology sectors, albeit with potential Chinese oversight.

Beyond physical infrastructure, the DSR provides a framework for cross-border e-commerce, digital finance, and cybersecurity—key priorities for many Middle Eastern states seeking to modernize their economies. The systems China builds are deeply embedded in its global supply chains and financial networks, facilitating easier market access for developing nations while reinforcing China’s position as a dominant exporter. Meanwhile, Beijing’s investments in submarine cables, satellite systems, and cloud computing hubs solidify its role as a central player in digital interconnectivity, particularly in the Gulf. Countries like Egypt view this as a strategic opportunity to accelerate digital transformation and strengthen their global economic standing with China’s support. However, such integration raises the prospect of long-term technological interdependence with China. As these digital ecosystems take root, states must grapple with a fundamental question: who controls the flow of data, governs AI systems, and defines the rules that will shape the next phase of the digital age?

The DSR in the Middle East

China’s Digital Silk Road (DSR) has rapidly expanded into the Middle East, providing a turnkey solution for governments looking to modernize their digital infrastructure and accelerate economic transformation. Across the region, Chinese technology firms have embedded themselves in telecommunications, artificial intelligence, and cloud computing, aligning their systems with the region’s national development strategies, like Saudi Vision 2030. Gulf states, particularly Saudi Arabia and the UAE, have emerged as early adopters of Chinese 5G networks, AI-driven governance, and smart city technologies, leveraging these investments to drive their economic diversification away from fossil fuels. Meanwhile, Egypt, Algeria, and Jordan have tapped into Chinese partnerships to expand digital access, strengthen cybersecurity, and develop fintech solutions, as well as integrating them into broader efforts to modernize their economies.

A quick look at recent deals ( is a solid source for tracking these kinds of deals).

Telecommunications & 5G

• Saudi Arabia: Huawei has major agreements with Saudi Arabia for 5G deployment, AI applications, and smart city development under Saudi Vision 2030. In 2022, China and Saudi Arabia signed multiple technology deals, including agreements on cloud computing and high-tech industries.

• UAE: The UAE has partnered with Huawei to roll out 5G networks, with the company also contributing to AI-driven governance and smart surveillance systems.

• Algeria, Egypt, and Jordan: Huawei has established digital training centers and signed agreements for telecom infrastructure expansion.

2. Artificial Intelligence & Digital Governance

• Saudi Arabia & UAE: Both countries are collaborating with China on AI-driven governance, facial recognition, and cybersecurity. Chinese companies like Huawei and CloudWalk provide AI surveillance tools.

• Egypt: Has partnered with China on AI and fintech solutions, including facial recognition systems.

3. Cloud Computing & Cybersecurity

• UAE: The Abu Dhabi-based G42 group, backed by the UAE government, has multiple partnerships with Chinese AI firms. Huawei Cloud also operates in the UAE, helping develop digital infrastructure and cybersecurity frameworks.

• Saudi Arabia: Huawei signed a deal to set up cloud computing services in Saudi Arabia, boosting digital transformation.

• Egypt: Signed agreements with China to enhance cybersecurity and e-government services.

4. Space & Satellite Cooperation

• Saudi Arabia: In 2022, China and Saudi Arabia signed a space technology cooperation agreement covering satellite development, communications, and space exploration.

• UAE: The UAE’s space agency has agreements with China for joint satellite projects and potential space exploration missions.

5. E-Commerce & Digital Trade

• Saudi Arabia, UAE, Egypt: Signed agreements with Alibaba and JD.com to facilitate cross-border digital trade, electronic payments, and cloud services.

• Saudi Arabia: Established a joint innovation center with China for digital economy development.

For Arab states, the Digital Silk Road (DSR) offers a fast-track to digital modernization, free from the regulatory constraints that often accompany Western alternatives. Across the region, China is building cloud networks, digital trade platforms, and fintech systems. These major digital infrastructure projects are pushing the region deeper into Beijing’s expanding digital ecosystem. Deeper ties to the DSR mean states get to upgrade their infrastructure, but this comes at the expense of embedding themselves in a China-led digital order.

Unlike U.S. and European-backed initiatives, which impose stricter conditions on data security, governance, and human rights, China promotes state-driven cooperation with minimal oversight. This flexibility is welcomed by governments who have previously deployed surveillance technologies for domestic monitoring, tracking dissent, and, in some cases, facilitating arrests and political crackdowns.

This pragmatic model is particularly appealing to governments seeking technological advancement while maintaining full control over governance and information flows. However, it also raises serious human rights concerns, particularly for the U.S. and Western governments, who warn that China’s approach enables authoritarian surveillance, digital repression, and abuses of privacy rights.

Chinese officials leave how the technology is used domestically to the discression of the state, and even set a strong precedent through the use of its own tech for domestic surveillance and security. The China option gives countries unrestricted digital expansion while bypassing the bureaucratic and ethical hurdles of the Western-led digital ecosystem. For China, this approach reinforces its development model, emphasizing state-led growth, technological self-sufficiency, and digital security—principles that align with the political and economic priorities of many Arab states.

Why does digital sovereignty matter to Arab states?

Middle Eastern states want greater sovereignty over their digital futures. Digital sovereignty defines a state's ability to control, regulate, and secure its entire digital ecosystem, including infrastructure, technology platforms, AI governance, and cybersecurity frameworks. It is similar to the concept of territorial sovereignty, but defined in the conceptual world of cyberspace, where the delineated virtual “borders” of a state’s sovereignty is difficult to fully assess. It involves determining who builds, owns, and operates critical digital networks—such as 5G, cloud computing, and smart city technologies—and ensuring that these systems align with national security and economic priorities. The objective of digital sovereignty is to uphold a state’s right to technological self-sufficiency while maintaining its national security, economic resilience, and geopolitical flexibility. But achieving this balance is far from straightforward.

They see digital sovereignty as a tool for securing their national security, economic independence, and geopolitical leverage in an increasingly digitized world. As global tech competition intensifies, Middle East governments must recognize that reliance on foreign tech providers—whether from the U.S., China, or Europe—creates vulnerabilities that could limit their strategic options in the future. Owning and controlling digital infrastructure, data governance, and AI development allows them to safeguard against external interference while positioning themselves as independent players in the global digital economy. And, localizing industries which produce the software and hardware make them critical stakeholders for foreign tech providers, and amplify their leverage in the industry.

By adopting Chinese digital infrastructure, they risk becoming locked into technology standards and systems that prioritize centralized governance, potentially limiting their ability to independently shape their digital governance models and data regulation frameworks. This creates an interesting dilemma where regional governments are forced to carefully weigh the immediate advantages of Chinese digital infrastructure against the long-term implications for their strategic autonomy, digital sovereignty, and access to other digital ecosystems evolving beyond China’s own.

For many states, national security and cyber resilience are at the forefront ditigal sovereignty. The region has long been a battleground for cyber warfare, espionage, and digital surveillance, with both state and non-state actors seeking to exploit technological weaknesses. The idea goes that greater control over telecommunications, cloud computing, and cybersecurity frameworks would enable Middle East governments to protect sensitive data, secure state operations, and minimize the risk of foreign intelligence access. U.S. and European have expressed concerns that certain forms of Chinese-built infrastructure creates the potential for unauthorized access. As a result, countries which partner with China face a growing number of restrictions on U.S. and Western tech exports to the region.

Economic independence is another driving factor. Gulf states, in particular, are investing heavily in technology as part of their economic diversification strategies. However, without digital sovereignty, these advancements could remain dependent on foreign providers, limiting the region’s ability to set its own rules and regulations for AI governance, digital trade, and financial technology. By strengthening local capabilities and localizing certain industries, many Arab states hope to build their own local ecosystems and capture more value from the global digital economy.

When combined, the pursuit of digital sovereignty may offer greater geopolitical flexibility. By controlling their own data and digital footprint, states can navigate between U.S. and Chinese tech spheres rather than being forced to align exclusively with one side. Countries like Saudi Arabia and the UAE have already demonstrated this approach, integrating Chinese 5G networks and AI tools while maintaining strategic partnerships with U.S. and Western firms. There are, however, limitations to how far this integration can go before one or both sides draws a red line. Furthermore, it creates long term challenges of integrating a state’s digital infrastructure cleanly into both a Chinese ecosystem and a Western-based system.

Losing out on other systems

The U.S. wants to insulate its technology from competitors, but that runs directly against the Gulf’s mix-and-match approach to digital modernization. Washington is increasingly wary of unauthorized Chinese access and technology transfer, especially as Saudi Arabia and the UAE deepen their digital partnerships with Beijing. These concerns aren’t new, but they’ve grown as Chinese firms embed themselves in the Gulf’s tech ambitions. For Gulf states, deeper integration with China limits their ability to fully align with the West and could strain their access to U.S. technology, investment, and defense cooperation.

A major sticking point is dual-use technology which could have military or intelligence applications. This has led to stricter export controls and licensing reviews for U.S. firms working in the Gulf, forcing Gulf-based companies into lengthy, politically charged approval processes that often end in denials or heightened scrutiny. In some cases, Washington has demanded full separation from Chinese firms before approving investments. The UAE’s AI firm G42, for example, was forced to cut ties with Chinese partners before securing U.S. approval for Microsoft’s $1.5 billion investment, which gave it access to advanced AI chips and cloud computing infrastructure.

Beyond technology transfer, Washington remains uneasy about how Gulf states use AI and surveillance tools, particularly given past scandals involving domestic repression and intelligence abuses. Both Saudi Arabia and the UAE have been criticized for “digital authoritarianism”, leveraging cyber tools to monitor dissidents and suppress opposition. The DarkMatter scandal, which exposed UAE intelligence agencies deploying sophisticated cyber surveillance, only deepened U.S. concerns. In response, Washington has tightened restrictions, including Bureau of Industry and Security (BIS) regulations limiting Gulf access to U.S. surveillance technologies. The Magnitsky Act looms as another potential roadblock, as both countries risk U.S. sanctions if they are found using American digital tools for human rights violations. At the same time, their collaboration with blacklisted Chinese AI firms like SenseTime, which has been linked to Xinjiang’s surveillance apparatus, further complicates U.S.-Gulf tech relations.

Geopolitical pressure adds another layer to the Gulf’s digital sovereignty dilemma. The U.S. and its European allies continue to push regional governments to curb their reliance on Chinese digital infrastructure, citing espionage and cybersecurity risks. Israel has drawn a hard line, blocking Chinese 5G expansion in favor of U.S.-approved telecom providers. Saudi Arabia and the UAE, however, continue to walk a tightrope, integrating Chinese-built digital systems while keeping close ties with Washington. This dual-track strategy reflective of the GCC”s regional hedging approach: leveraging China’s cost-effective digital solutions while ensuring continued access to Western technology, security partnerships, and investment. If global competition heats up, Gulf states will have to carefully manage this balancing act.

Beyond external pressure, economic and technological lock-in presents a deeper, long-term risk. China’s digital infrastructure investments are attractive because they offer advanced technology at a lower cost, but they also bind states to Chinese hardware, software, and cybersecurity protocols, making it harder to switch providers in the future and untethering from the Chinese firewall. Unlike Western-led models, which offer greater interoperability and open digital standards, China’s tech ecosystem is designed to reinforce state control over data and information flows, shaping AI governance, cybersecurity laws, and regulatory frameworks in ways that reflect Beijing’s own governance style, which states may attempt to replicate. This distinction is critical because digital sovereignty extends beyond physical infrastructure—it also encompasses data sovereignty.

Who owns the data?

Digital sovereignty and data sovereignty are often intertwined but not always aligned. A country may retain control over its digital infrastructure while still relying on foreign cloud services to store and process data, creating vulnerabilities in national security and regulatory oversight. At the same time, strict data localization policies, like those adopted in the European Union under General Data Protection Regulation (GDPR) or China’s Data Security Law, may protect information flows but do not necessarily ensure broader digital autonomy and sovereignty. Many Middle Eastern states will face this challenge. While they embrace China’s Digital Silk Road for telecommunications and advanced tech (like AI), they face the challenge of localizing data ownership and data storage, complex data governance challenges, and a lack of localized AI regulation. Thus, their digital sovereignty is both tied to who builds the infrastructure but also on who controls the data, sets the rules for AI governance at a national, regional, and international level.

While there is a growing movement to create complimentarianism and cohesion on technology frameworks at a regional level, regulatory fragmentation due to inconsistency across digital regulations across the region adds another layer of complexity. Middle Eastern states lack a unified digital governance framework, which risks leading to inconsistent cybersecurity policies, data localization rules, and AI regulations. The Gulf states have made significant digitization and tech progress, including through e-governance, cybersecurity, and digital transformation, embedding AI and cloud computing into state operations. But much of North Africa and the Levant remain digitally fragmented, leaving them more vulnerable to foreign influence and technological dependency. Without a coordinated regional approach to cybersecurity, data sovereignty, and digital regulation, these gaps will only widen, making it harder for states to assert any real form of digital sovereignty while balancing Chinese and Western technology partnerships.

A non-aligned option is complex

Three key forces will shape how Middle Eastern states navigate digital sovereignty: technological alignment (which ecosystem they adopt), the economic dependencies that arise from that choice, and the political governance model embedded within the chosen system. This sequence of considerations will determine whether the region can craft an independent digital strategy or be forced into alignment with either Western or Chinese technological ecosystems. As Beijing and Washington construct parallel AI and digital infrastructures, they embed competing governance models, making technological choices inherently political.

This growing bifurcation is already forcing Middle Eastern states into difficult decisions. Integrating Chinese-built AI, cloud computing, and surveillance technologies risks cutting off access to U.S. and European tech ecosystems, as Washington tightens export controls and technology transfer restrictions on countries working with blacklisted Chinese firms. Yet avoiding Chinese systems entirely is neither economically nor politically viable. Many states rely on Beijing’s digital infrastructure investments and see strategic value in diversified technology partnerships.

As a result, Arab states may attempt to carve out a non-aligned digital framework, leveraging both Chinese and Western technologies without full dependency on either. However, this approach carries risk. Economic leverage—through sanctions, supply chain restrictions, or regulatory barriers—can be used, particularly by the West, to steer their alignment, limiting the viability of hybrid models. Additionally, as digital ecosystems fragment, states pursuing dual-track strategies will face mounting security risks, interoperability challenges, and unforeseen economic pressures, particularly if Chinese and Western systems become functionally incompatible. Digital sovereignty may prove more aspirational than achievable if not carefully managed.

Creating leverage through localizing supply chain

Rather than choosing, some states seek instead to change their role in the equation to make themselves essential in the global supply chain and position their economies as critical nodes in the digital economy and next-generation computing production. By localizing key elements of supply chains, particularly in semiconductor fabrication, AI computing, and cybersecurity infrastructure, Gulf states have become strategic players in its production and distribution.

This forces both China and the U.S. to engage with the Gulf as an essential partner, not a client, in the technology supply chain, making it more difficult for either side to restrict access to dual-use technologies out of concern that they may end up in the hands of their competitor. This enables the Gulf to also cultivate greater leverage in negotiations over their access to AI chips, high-performance computing systems, and secure cloud technologies that both China and the U.S. might otherwise be reluctant to share. This evolving and sensitive posture positions Gulf economies to remain technologically competitive and, to a degree, autonomous in an increasingly polarized digital landscape.

A delicate balancing act

Gulf states can and already are diversifying their digital partnerships by broadening their collaboration beyond China and the U.S. by engaging with South Korea, India, Japan, and the EU. By reducing dependency on any single provider, individual states can enhance their bargaining power and reduce the potential of getting locked into technological dependencies that could limit future options.

Another way to diversify is by building indigenous digital capabilities. Investments in domestic AI research, cybersecurity expertise, and semiconductor manufacturing are essential to reducing reliance on foreign technology and strengthening digital sovereignty, even if developing this capability initially requires some level of foreign technology and support. Building homegrown alternatives to imported technologies requires putting real capital investment into regional startups, innovation hubs, and digital entrepreneurship initiatives—a move GCC states have mastered as part of economic diversification. This will better position the region as a major hub for the development of emerging digital technologies.

Security also remains a major concern. Cybersecurity and data governance will remain a top political and policy priority moving forward. Establishing a regional cybersecurity framework, modeled on Europe's GDPR, could help harmonize data protection laws, strengthen digital trade policies, and reduce vulnerabilities to cyber threats. Ultimately, a rules-based digital order that prioritizes transparency, accountability, and individual data rights would also enhance the region’s long-term security and economic resilience.

Rather than becoming overly reliant on Chinese-built digital infrastructure, Middle Eastern states have an opportunity to deepen collaboration with U.S. and other international partners (E.U., Japan, South Korea, etc) on technology standards, cybersecurity norms, and AI ethics. The overarching question is relatively simple—though far more complex in execution: should states adopt a digital ecosystem that prioritizes global interoperability and integration, or one that increases reliance on a single actor? A system aligned with open, rules-based digital frameworks offers greater long-term stability, economic opportunity, and security.

Proactively shaping global digital governance—through engagement in international forums and bilateral tech diplomacy—may be a more effective strategy for safeguarding strategic autonomy while ensuring interoperability with overarching international systems. Aligning with trusted digital ecosystems not only grants access to cutting-edge innovation but also mitigates risks of coercive economic and technological dependencies. In an era of growing digital fragmentation, maintaining flexibility without sacrificing security will be critical to long-term success.

Which ecosystem to choose?

Middle East states have a choice. While the U.S. remains the region’s primary security partner, its ability to compete in the digital and AI-driven economy is less assured. Washington promotes an open and competitive digital order, but export controls, technology transfer restrictions, and dual-use concerns have limited its ability to provide seamless technology partnerships. In contrast, China’s Digital Silk Road offers a more accessible, turnkey and integrated ecosystem—albeit one that embeds Beijing’s governance model into national AI, cloud computing, and cybersecurity frameworks.

This growing bifurcation presents a strategic dilemma for Middle Eastern states. Wealthier Gulf countries may have the leverage to balance between U.S. and Chinese technology systems, but others risk becoming locked into the digital infrastructure they initially adopt, with long-term consequences for economic and security partnerships. A fragmented digital landscape—where Middle Eastern states lean too heavily into Chinese-built systems—could complicate U.S. military cooperation, intelligence-sharing, and economic engagement in the region.

Washington also faces a unique challenge: it must recalibrate its digital engagement strategy to offer not just security guarantees but also competitive technology partnerships. Striking a balance between security concerns and economic incentives will determine whether the U.S. can maintain its strategic influence in a rapidly evolving digital Middle East—or whether China’s model will take root, reshaping the region’s digital future on Beijing’s terms.

For further reading:

Reports & Policy Papers

1. Middle East Institute (MEI). "China, the US, and the Battle for Middle Eastern Technology." MEI Publications, 2024. https://www.mei.edu/publications/china-us-and-battle-middle-eastern-technology.

2. Middle East Institute (MEI). "Bytes and Beltways: Decoding Beijing’s Tech-Centric Geopolitics in the Gulf." MEI Blog, 2024. https://www.mei.edu/blog/bytes-and-beltways-decoding-beijings-tech-centric-geopolitics-gulf.

3. Baker Institute. "Shaping the Energy Transition in the Gulf: China Collaboration." Baker Institute Research, 2024. https://www.bakerinstitute.org/research/shaping-energy-transition-gulf-china-collaboration.

4. Atlantic Council. "Forging the 5G Future: Strategic Imperatives for the US and Its Allies." Atlantic Council Report, 2024. https://www.atlanticcouncil.org/in-depth-research-reports/report/forging-the-5g-future-strategic-imperatives-for-the-us-and-its-allies/.

5. Carnegie Endowment for International Peace. "How Huawei’s Localization in North Africa Delivered Mixed Returns." Carnegie Report, 2022. https://carnegieendowment.org/2022/04/14/how-huawei-s-localization-in-north-africa-delivered-mixed-returns-pub-86889.

Chinese Government & Policy Sources

6. Guangdong Provincial Government. "China’s Digital Economy Development Policy and International Cooperation." Guangdong Commerce Department Report, 2025. https://com.gd.gov.cn/zcqggfwpt/tzjy/content/post_4669908.html.

7. Shanghai International Studies University (SAGGAS). "China’s Role in Global Digital Governance: A Strategic Perspective." SAGGAS Research Report, 2024. http://www.saggas.shisu.edu.cn/ArticleDetail/ArticleDetail?ArticleId=91ee771d-49df-4811-8fd3-cd643a1fd75c.

8. People’s Daily. "China’s Expanding Digital Infrastructure in the Middle East and Belt and Road Initiative." People’s Daily Online, 2025. http://paper.people.com.cn/rmrb/pad/content/202503/03/content_30059816.html.

9. Belt and Road Portal. "The Belt and Road Digital Economy and Its Global Impact." China’s Belt and Road Initiative Report, 2024. https://www.yidaiyilu.gov.cn/p/161474.html.

Industry & Chinese Sources

10. Huawei Technologies. "Middle East Leading the 5G Era." HuaweiTech, 2024. https://www.huawei.com/en/huaweitech/publication/202401/middle-east-leading-5ga-era.

11. Tsinghua University Institute for International and Area Studies. "Tsinghua University’s Analysis on Global Tech Competition." IIAS Research, 2024. https://iias.tsinghua.edu.cn/en/info/1196/3204.htm.

12. Global Times. "Huawei and China’s Digital Future in the Middle East." Global Times, 2024. https://www.globaltimes.cn/page/202405/1313252.shtml.

News & International Analysis

13. World Economic Forum. "Oil Futures, the Gulf, and Global Decision-Making." WEF Report, 2025. https://www.weforum.org/stories/2025/02/oil-futures-gulf-gcc-global-decision-making/.

China’s deepening engagement with Oman is anchored in strategic investments that align Beijing’s Belt and Road Initiative (BRI) with Muscat’s Vision 2040, positioning Oman as a pivotal hub in China’s regional economic strategy. At the heart of this partnership is the China-Oman (Duqm) Industrial Park—a $10.7 billion megaproject established through a 50-year lease agreement between Oman Wanfang, a Chinese consortium, and the Special Economic Zone Authority at Duqm. The industrial hub has gradually transformed Duqm into a manufacturing and logistics powerhouse. It features an oil refinery, methanol plant, solar power equipment production, and a range of other industries critical to Oman’s long-term development ambitions.

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Oman’s Role in China’s Expanding Maritime Strategy

Oman, and particularly Duqm, fits neatly into what western scholars term China’s “String of Pearls” strategy—a network of key ports and infrastructure investments aimed at securing China’s maritime supply chains and mitigating vulnerabilities along critical trade routes. While Duqm is officially framed as an economic hub, its location outside the Strait of Hormuz enhances China's ability to bypass geopolitical chokepoints, reducing exposure to potential disruptions in the Gulf. The development of commercial and industrial facilities in Duqm, combined with growing Chinese investments in nearby maritime nodes such as Gwadar (Pakistan), Hambantota (Sri Lanka), and Djibouti, signals Beijing’s broader effort to establish a secure network of logistics and replenishment points along the Indian Ocean rim.

Oman’s strategic position along the Arabian Sea makes it particularly valuable in this network. It would provide Beijing with a potential logistics and replenishment hub that is less vulnerable to U.S. naval dominance in the Gulf. While Oman has not granted China military access, its inclusion in China’s maritime infrastructure investments suggests that Beijing views it as an integral part of its long-term naval strategy. Furthermore, Chinese naval vessels already dock in Oman’s Port Sultan Qaboos, a key refueling and maintenance stop for international naval operations which reinforces Beijing’s growing logistical footprint in the region. China also participates in joint naval exercises with Russia and Iran around the Gulf of Oman, with Omani observers. Though China’s presence in Omani waters remains largely commercial and under a multilateral framework, these developments raise long-term questions about the evolution of Sino-Omani security ties. Given Beijing’s pattern of expanding dual-use infrastructure globally, its maritime engagements in Oman warrant close scrutiny from regional and Western policymaker

China depends on secure sea lines of communication (SLOCs) for energy imports, with over 40% of its crude oil coming from the Gulf region. Oman is strategically located at the intersection of multiple critical maritime routes—connecting the Gulf, the Indian Ocean, and the Red Sea. This makes it a key player in China’s efforts to secure its energy supply chains and reduce reliance on vulnerable chokepoints.

By deepening economic ties with Oman and developing infrastructure in Duqm, China may be hedging against potential supply chain disruptions caused by regional conflicts, U.S. maritime controls, or geopolitical instability in the Gulf. Unlike its heavily scrutinized presence in Djibouti, which serves as a military outpost for the Chinese navy, China’s investments in Oman remain predominantly economic—for now. However, its involvement in maritime security initiatives, counter-piracy operations, and maritime logistics indicates that Beijing is gradually expanding its strategic footprint in the region.

This has raised concerns among Western analysts regarding the potential for China’s military expansion. The port has already drawn significant military interest from various nations; the United Kingdom established a Joint Logistics Support Base there in 2017, and both U.S. and Indian navies have secured access agreements. A Chinese footprint in Duqm has been a concern for Western policymakers, who worry that this could complicate U.S. and allied naval operations in the region and lead to a more permanent Chinese naval presence in the Gulf. Chinese authorities maintain that their engagement in Oman is purely economic, but Western analysts point to China’s global pattern of dual-use infrastructure investments as a potential precursor to deeper security engagement.

China-Oman Economic and Investment Ties

Concerns over Duqm are just one facet of China-Oman relations. China has rapidly become Oman’s largest trading partner, with bilateral trade reaching $27 billion in 2023. Oman exports oil, gas, and petrochemicals to China, while Chinese imports—EVs, electronics, and machinery—support the Sultanate’s modernization efforts. Chinese FDI into Oman grew by 27.8% in 2023 to $3.45 billion, primarily in energy, infrastructure, and commercial sectors.

A central objective of China’s economic engagement with the Gulf is finalizing the long-stalled China-GCC Free Trade Agreement (FTA), which has been under negotiation since 2004. Oman has been a strong advocate, actively lobbying GCC partners on its benefits. Unlike Saudi Arabia, which fears an influx of low-cost Chinese goods could undercut its Vision 2030 industrialization goals, Oman sees no major barriers and champions deeper Sino-Gulf economic integration. Yet, bringing the rest of the GCC on board remains a challenge.

In September 2024, Chinese Premier Li Qiang met with GCC Secretary-General Jasem Mohamed Albudaiwi in Riyadh, urging a breakthrough in FTA negotiations. For Oman, the agreement could attract more Chinese investment, deepen its global trade linkages, and strengthen its role as a key hub between Asia, the Middle East, and Africa. However, growing economic ties come with risks. Some warn that Muscat could become financially overexposed to Beijing, particularly if it takes on excessive debt for infrastructure projects. As of 2023, Oman’s external debt stood just shy of $40 billion, with China-linked loans forming a manageable but growing share. While Oman has so far avoided the severe debt distress seen in other BRI partners, policymakers remain cautious about financial sustainability.

Beyond economics, China’s interest in Oman is also geopolitical. Unlike its more high-profile engagements with Saudi Arabia and Iran, Beijing’s approach to Oman has been pragmatic and relatively non-disruptive, aligning with Muscat’s traditional role as a neutral mediator. For China, Oman’s ability to engage all sides—GCC states, Iran, and Western powers—without entanglement in regional conflicts, as seen in its role in brokering the Iran-Saudi normalization, makes Muscat a natural partner.

Furthermore, Oman’s integration into the Belt and Road Initiative further cements its strategic importance within China’s economic ambitions. Its ports, free zones, and trade corridors make it an ideal logistical hub for Chinese commerce across Asia, the Gulf, and Africa. The China-Oman (Duqm) Industrial Park is a flagship BRI project and regional model China may use for investments in other regions.

Beyond trade and infrastructure, China and Oman are also expanding cooperation in space. In December 2024, Omani space firm Oman Lens signed a strategic partnership with China’s Deep Space Exploration Laboratory (DSEL) to collaborate on the International Lunar Research Station (ILRS). Oman is following the lead of other Gulf states, notably the UAE, in positioning itself as a forward-thinking, technologically advanced nation. It generally views China's expanding digital influence in Middle Eastern high-tech sectors and its growing role in global space diplomacy as strategic opportunities to enhance its own technological capabilities and international standing.

Why China? This shift is part of a broader GCC realignment, as Gulf countries pursue economic diversification, reduced Western dependency, and stronger ties with Beijing. Rather than a pivot away from the U.S., this is a strategic effort to balance relationships with both Washington and Beijing, leveraging opportunities from both global powers.

Oman, in particular, has positioned itself as a useful partner for China in advancing deeper Sino-Gulf economic integration. Muscat’s advocacy for the China-GCC Free Trade Agreement (FTA) and its openness to Chinese investment highlight its role in shaping this evolving dynamic. However, balancing these ties will be crucial. Overreliance on Beijing—especially in infrastructure financing and strategic sectors—could expose Oman to economic vulnerabilities. Meanwhile, its growing partnership with China will face scrutiny from the U.S. and key Gulf partners, particularly as U.S.-China competition intensifies in the region.

For now, China’s role in Oman remains largely economic, but any future expansion into security or military cooperation—such as logistical access at Duqm or maritime coordination—could provoke Western concerns and challenge Muscat’s delicate foreign policy balancing act. As Oman navigates this evolving geopolitical landscape, its success will hinge on its ability to leverage Chinese investment without compromising strategic autonomy. If managed effectively, Oman stands to benefit significantly from its position at the crossroads of China’s expanding Middle East footprint, securing economic gains while maintaining its long-standing neutrality.

Additional Reading

Atlantic Council. "China Is Getting Comfortable with the Gulf Cooperation Council. The West Must Pragmatically Adapt to Its Growing Regional Influence." January 25, 2024. https://www.atlanticcouncil.org/blogs/menasource/china-is-getting-comfortable-with-the-gulf-cooperation-council-the-west-must-pragmatically-adapt-to-its-growing-regional-influence/.

CACI Analyst. "China’s Debt-Trap Diplomacy in Central Asia." March 2023. https://www.cacianalyst.org/publications/analytical-articles/item/13823-chinas-debt-trap-diplomacy-in-central-asia.html.

Center for Strategic and International Studies (CSIS). "China’s Hidden Reach: Military and Economic Expansion in the Middle East." December 5, 2023. https://features.csis.org/hiddenreach/china-middle-east-military-facility/.

Embassy of China in Timor-Leste. "GCC Free Trade Negotiations with China Face No Obstacles, Says Omani Official." March 4, 2014. https://tl.china-embassy.gov.cn/eng/xwdt/201403/t20140304_1140112.htm.

LinkedIn. "China’s Potential Military Base in Oman: Reshaping the Middle East Balance?" March 2024. https://www.linkedin.com/pulse/chinas-potential-military-base-oman-reshaping-middle-east-al-badawi-9nuzc.

Middle East Eye. "Oman, China Bolster Strategic Military Cooperation During Defence Minister Visit." February 20, 2024. https://www.middleeasteye.net/news/oman-china-defence-minister-visit-bolster-strategic-military-cooperation.

Oman Observer. "China-Oman Bilateral Trade Surpasses $30 Billion in 2023." November 5, 2023. https://www.omanobserver.om/article/1154191/business/economy/oman-china-bilateral-trade-surpasses-30-billion-in-2023.

Rand Corporation. "The UK Should Be Careful Not to Hand the Middle East to China." August 2024. https://www.rand.org/pubs/commentary/2024/08/the-uk-should-be-careful-not-to-hand-the-middle-east.html.

Reuters. "China-Gulf Free Trade Talks Stall Over Saudi Industrial Agenda: Sources." May 14, 2024. https://www.reuters.com/world/china-gulf-free-trade-talks-stall-saudi-industrial-agenda-sources-say-2024-05-14/.

Reuters. "China's Premier Li Calls for Accelerated Gulf Trade Talks." September 11, 2024. https://www.reuters.com/world/riyadh-chinas-premier-li-calls-accelerated-gulf-trade-talks-2024-09-11/.

SpaceNews. "Omani Space Company Signs Up to China's ILRS Moon Base Project." December 2024. https://spacenews.com/omani-space-company-signs-up-to-chinas-ilrs-moon-base-project/.

Zawya. "Oman Enters Landmark Lunar Research Partnership with China." December 20, 2024. https://www.zawya.com/en/world/middle-east/oman-enters-landmark-lunar-research-partnership-u0zenzrf.

Zawya. "Oman-China Bilateral Trade Surpasses $30 Billion in 2023." January 15, 2024.https://www.zawya.com/en/projects/bri/oman-china-bilateral-trade-surpasses-30bln-in-2023-v0ybahn6.

As global economic activity pivots toward Asia, Gulf states have leveraged their position as a trade and energy hub to deepen economic ties with China, India, Japan, and South Korea while maintaining critical security and financial partnerships with the U.S. and Europe. This strategy has maximized their leverage in global power dynamics, but as U.S.-China competition intensifies and alternative trade corridors take shape, their balancing act faces growing challenges.

GCC-China: Deepening Ties and Strategic Realignment

Sino-Gulf relations have entered a phase of sustained economic and diplomatic expansion, reflecting Beijing’s growing influence in the region. President Xi Jinping’s December 2022 visit to Saudi Arabia marked a turning point, with the first-ever China-GCC Summit producing 35 agreements worth approximately $50 billion in energy, infrastructure, and technology. Saudi Arabia’s Comprehensive Strategic Partnership with China has since aligned the Belt and Road Initiative (BRI) with Vision 2030, reinforcing Beijing’s role in the kingdom’s long-term economic transformation.

China has strategically expanded its influence beyond economics. Its mediation of the Saudi-Iran rapprochement in March 2023 demonstrated Beijing’s ability to shape regional security dynamics, positioning itself as a potential alternative to Western diplomatic leadership. Over the past two years, diplomatic engagement has intensified, with Oman’s Sultan and Bahrain’s King visiting Beijing in the past two years to deepen economic ties, particularly in 5G technology, financial sector integration, and digital infrastructure. Saudi Arabia and the UAE’s invitation to BRICS+ in January 2024 further underscored Gulf efforts to hedge against Western-dominated financial institutions while preserving core security relationships with the U.S.

While China has long been investing in GCC infrastructure, energy, and technology, Gulf states are now channeling significant capital back into China, reinforcing a growing bilateral economic interdependence. Saudi Aramco and Sinopec’s $9.82 billion refinery and petrochemical complex in Fujian province, Qatar Investment Authority’s 10% stake in China Asset Management Company, and Saudi ACWA Power’s $1.78 billion commitment to renewable energy in China illustrate a two-way investment flow. Financial markets have also grown more interconnected, with the Shenzhen Stock Exchange and Dubai Financial Market forging new cross-border investment ties in 2024.

However, interdependence does not equate to exclusive alignment. While China is the GCC’s top trading partner, Gulf states have avoided over-reliance. Their security frameworks remain anchored with the U.S. and Europe, and their technology strategies reflect a careful balance—integrating Huawei’s 5G while safeguarding Western AI, cloud computing, and cybersecurity partnerships. This dual-track engagement allows them to maximize economic and technological benefits while mitigating geopolitical risks.

GCC-Japan & South Korea: High-Tech and Energy Partnerships

As the Gulf expands its economic engagement across Asia, Japan and South Korea have emerged as critical players in the region’s long-term development trajectory. Unlike China’s state-driven economic model, Tokyo and Seoul prioritize high-tech innovation, private-sector investment, and strategic industrial collaboration, aligning with Gulf states’ push to diversify beyond hydrocarbons and integrate into global supply chains.

Japanese Prime Minister Fumio Kishida’s July 2023 visit to Saudi Arabia, the UAE, and Qatar underscored Japan’s growing role in the Gulf’s energy transition. Through the "Lighthouse Initiative," Tokyo has positioned itself at the forefront of the region’s green energy transformation, securing agreements on clean hydrogen, carbon recycling, and sustainable metals production. By 2030, Japan aims to integrate Saudi-produced hydrogen into its energy mix, ensuring long-term energy security while deepening its industrial and financial footprint in the Gulf.

South Korea has followed a similar trajectory. President Yoon Suk-yeol’s January 2023 visit to the UAE secured a $30 billion investment pledge into South Korea’s technology and industrial sectors. Saudi Arabia has expanded its partnership with Seoul, targeting green hydrogen, electric vehicles, and petrochemicals through $30 billion in MoUs. The landmark Barakah nuclear power plant, built by Korea Electric Power Corporation, reflects South Korea’s ability to execute high-tech infrastructure projects in the Gulf, paving the way for future collaboration in nuclear energy, advanced manufacturing, and AI-driven industries.

Beyond energy, Japan and South Korea are central to the Gulf’s digital transformation. South Korea’s Samsung and LG are key players in Saudi Arabia’s NEOM megacity, while Japan’s SoftBank and Hitachi have invested in GCC data centers and AI research. These collaborations contrast with China’s large-scale infrastructure approach, providing Gulf states with alternative high-tech pathways while reinforcing ties to Western economic frameworks.

Expanding Regional Connectivity: The Role of IMEC and IPEF

As Gulf states expand ties with Japan and South Korea, their engagement increasingly intersects with competing regional frameworks. While IMEC (India-Middle East-Europe Economic Corridor) aims to streamline trade routes between India, the Gulf, and Europe, IPEF (Indo-Pacific Economic Framework for Prosperity) seeks to integrate Indo-Pacific economies under U.S.-aligned governance standards. Navigating both initiatives allows the Gulf to reinforce its role as a transit hub while securing investment from multiple economic centers.

IMEC, announced at the 2023 G20 Summit, is designed to facilitate trade and energy linkages across South Asia, the Gulf, and Europe. Although Japan and South Korea are not formal IMEC members, the corridor offers them opportunities to diversify supply chains, enhance access to Gulf and European markets, and bypass China-centric shipping routes. For the GCC, IMEC provides another tool to reinforce its position as a logistics and trade hub while attracting East Asian capital.

IPEF, launched in May 2022, represents a U.S.-led initiative focused on supply chain resilience, clean energy, and digital trade. While not directly linked to the Gulf, its inclusion of Japan and South Korea means that many IPEF-aligned investments in the region—particularly in hydrogen, AI, and infrastructure—could integrate with Gulf economic priorities. However, uncertainty surrounding U.S. commitment under a potential Trump administration raises concerns about IPEF’s durability. If U.S. disengagement weakens IPEF’s effectiveness, Japan and South Korea may pivot toward direct bilateral agreements with the Gulf or seek alternative economic frameworks.

The Gulf as a Global Convergence Point

Rather than treating IMEC, IPEF, and BRI as competing frameworks, Gulf states have positioned themselves at the intersection of the three, leveraging each to maximize investment, trade integration, and strategic influence. IMEC enhances Gulf connectivity to Europe and South Asia, while IPEF aligns with regional digital and clean energy priorities, offering structured engagement with Indo-Pacific economies. At the same time, Gulf states remain central to BRI’s expansion into the Middle East, capitalizing on Chinese infrastructure financing while maintaining access to competing economic architectures. By engaging in all three frameworks, the Gulf ensures it remains indispensable to Asia’s leading economies while avoiding dependence on any single power.

However, shifting U.S. policy priorities could complicate long-term regional economic integration. If Washington deprioritizes multilateral economic frameworks, Gulf states will need to rely more on bilateral agreements with Japan and South Korea to sustain momentum. While they stand to benefit from IPEF-aligned investments, they may increasingly turn to IMEC and bilateral deals as alternative mechanisms for economic expansion.

Ultimately, the Gulf’s ability to maneuver between these shifting frameworks will not only determine its economic resilience but also shape its geopolitical autonomy in an era of intensifying great-power competition. By embedding itself within all major Asian economic architectures—without fully committing to any single one—the Gulf ensures it remains a critical player rather than a passive arena for external influence. This strategic balancing act will define its future role as a global economic hub and a power broker in an increasingly multipolar world.

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Gulf states are navigating a complex geopolitical and economic landscape, balancing traditional energy dominance with diversification into renewables, expanding their technological capabilities amid intensifying U.S.-China competition, and investing in infrastructure to solidify their role as a global trade and logistics hub. This balancing act is underpinned by a combination of strategic hedging, economic pragmatism, and a long-term vision that seeks to position the region at the center of global energy transitions, digital economies, and infrastructure connectivity.

Energy: Retaining Dominance While Managing Transition

Despite global efforts to accelerate the shift toward renewables, hydrocarbons remain the economic backbone of Gulf states, and their strategies reflect a deliberate effort to shape—not merely react to—the energy transition. Saudi Arabia, the UAE, and Qatar collectively control over 48% of the world’s proven oil reserves and 41% of its natural gas reserves, ensuring their continued leverage in global markets. OPEC+ remains the primary instrument for managing production and price stability, with Riyadh acting as the key orchestrator of supply adjustments. In 2023, Saudi Arabia led voluntary production cuts of 1 million barrels per day, signaling its ability to manipulate global oil supply even as demand fluctuates. However, U.S.-Saudi energy relations have evolved; Washington's increased shale production has diminished its direct reliance on Gulf oil, prompting Saudi Arabia to deepen energy ties with China, which now imports nearly 1.8 million barrels per day from the kingdom. Meanwhile, Russia’s participation in OPEC+ reflects a growing transactional relationship between Riyadh and Moscow, where Saudi Arabia gains leverage against Western political pressure while Russia secures market stability amid sanctions.

Security concerns remain paramount in the region’s energy calculus. The Strait of Hormuz, through which over 20% of global oil flows, remains a strategic chokepoint, with Iran repeatedly demonstrating its ability to disrupt transit through naval maneuvers, drone strikes, and cyber operations. The Red Sea and Bab el-Mandeb Strait have also become volatile, as evidenced by Houthi attacks on Red Sea shipping, underscoring the fragility of regional supply chains. While the U.S. Navy remains the primary security guarantor, Gulf states are expanding military partnerships beyond Washington, including with China, which opened its first overseas military base in Djibouti near the Bab el-Mandeb Strait. These shifts indicate a broader push by Gulf states to diversify their security partnerships, but aim to deepen reliance on the U.S. through a bilateral defence cooperation agreement.

At the same time, Gulf states are positioning themselves as key players in emerging energy markets. Saudi Arabia aims to dominate the global blue hydrogen market, investing $8.4 billion in hydrogen projects, while the UAE has committed $50 billion to renewables through Masdar, reflecting a strategic hedge rather than a full-scale transition. Qatar, already the world’s largest LNG exporter, is investing $30 billion to expand LNG production by 64% by 2027, reinforcing hydrocarbons as a long-term economic pillar. These moves signal that Gulf states are not abandoning fossil fuels, but rather integrating them into the global energy transition in a way that maintains market dominance.

Technology: A Strategic Battleground in U.S.-China Competition

The Gulf’s digital transformation is unfolding in the shadow of great power competition, as U.S. and Chinese technological spheres increasingly clash. Saudi Arabia and the UAE are aggressively investing in AI, cybersecurity, and digital infrastructure, with the GCC digital economy expected to reach $400 billion by 2030. Yet, these investments are drawing increased scrutiny from Washington, particularly regarding Chinese tech penetration into critical infrastructure.

Huawei’s 5G rollout across Saudi Arabia, the UAE, and Qatar has triggered U.S. concerns over cybersecurity risks, with Washington pressuring Gulf states to curb Chinese technological influence. However, for Riyadh and Abu Dhabi, technological independence is as important as security ties with the U.S., leading them to pursue a pragmatic hedging strategy. The UAE has already become a hub for Chinese AI and cloud computing companies, while Saudi Arabia has signed multiple AI cooperation agreements with Chinese firms as part of Vision 2030.

Cybersecurity is another major priority, driven by escalating cyber threats from Iran, Hezbollah, and other regional actors. The UAE has responded by establishing the Cyber Security Council, while Saudi Arabia has invested in offensive cyber capabilities, signing cybersecurity pacts with U.S. and European firms. These developments highlight how digital security has become a core pillar of national security strategies in the Gulf, intertwined with broader geopolitical alignments.

Infrastructure: Gulf States as a Global Logistics Hub

Gulf states are aggressively investing in infrastructure to cement their role as a global trade and logistics hub, leveraging their strategic location at the crossroads of Asia, Africa, and Europe to position themselves as indispensable players in global commerce. Infrastructure development is not just about economic diversification—it is a geopolitical tool that enables Gulf states to assert influence over the flow of goods, energy, and capital between major economic blocs. Saudi Arabia’s Vision 2030, with its $500 billion infrastructure portfolio, includes flagship projects like NEOM, a planned smart megacity integrating advanced logistics, AI-driven trade hubs, and sustainable urban development. Beyond NEOM, Saudi Arabia is modernizing its Red Sea and Gulf port infrastructure, enhancing connectivity to global markets while preparing for the long-term shift in maritime trade routes.

Meanwhile, the UAE has solidified its dominance in maritime logistics, with Jebel Ali handling 15 million TEUs annually, making it the largest port in the Middle East and a key transshipment hub linking Asian manufacturing centers with Western consumer markets. The UAE’s DP World, one of the largest port operators globally, manages a vast network of ports, free zones, and logistics corridors across the Middle East, Africa, and South Asia, extending Emirati commercial influence far beyond its borders. These investments underscore the Gulf’s broader ambition: not only to integrate more deeply into global supply chains but also to shape how trade routes evolve in an era of shifting global power dynamics.

A key geopolitical shift in infrastructure development is the intensifying competition between China’s Belt and Road Initiative (BRI) and the India-Middle East-Europe Economic Corridor (IMEC). The IMEC project, announced at the 2023 G20 Summit, is being framed as a Western-backed alternative to BRI, aiming to establish a new economic corridor that links India to Europe via the Middle East through a multi-modal transportation network combining rail and maritime infrastructure. The initiative is designed to bypass Chinese-led projects, reducing Beijing’s influence in global infrastructure development while deepening trade integration between the Gulf, South Asia, and Europe.

However, rather than taking sides, Gulf states are hedging their bets, engaging with both BRI and IMEC to maximize economic opportunities while maintaining strategic flexibility. Saudi Arabia and the UAE have been among the largest Gulf recipients of Chinese BRI investments, particularly in port and logistics infrastructure. Jeddah Islamic Port and Abu Dhabi’s Khalifa Port have seen significant Chinese-backed upgrades, reinforcing their roles as regional trade hubs. At the same time, Saudi Arabia has signaled strong support for IMEC, recognizing the potential to deepen economic integration with India and European markets.

Another critical component of Gulf infrastructure strategy is the I2U2 initiative, a multilateral economic partnership between India, Israel, the UAE, and the United States. Initially envisioned as a technology and infrastructure-focused mini-lateral framework, I2U2 seeks to enhance trade connectivity, food security, clean energy cooperation, and technological collaboration across its member states. For the Gulf, particularly the UAE, I2U2 represents another avenue to diversify economic partnerships beyond traditional Western and Chinese engagements while strengthening ties with both India and Israel, two rising players in global technology and supply chain logistics. While I2U2 is not a direct competitor to IMEC or BRI, it aligns with the broader Gulf strategy of engaging in multiple economic and strategic partnerships simultaneously, allowing Gulf states to reinforce their position at the intersection of global trade while hedging against over-dependence on any single geopolitical bloc. The UAE, as a key logistics and financial hub, is leveraging I2U2 to expand its role in global food corridors, digital trade, and renewable energy, further solidifying its status as a central player in shaping new economic corridors in a multipolar world.

This dual-track strategy highlights the Gulf’s pragmatic approach to infrastructure diplomacy: rather than aligning fully with either China or the U.S.-India-Europe axis, Gulf states are ensuring they remain central to competing trade networks. By positioning themselves as pivotal transit hubs, they retain leverage over global supply chains, securing investment from multiple partners while avoiding over-reliance on any single global power. This approach also reflects a broader shift toward strategic autonomy, where Gulf states are no longer passive participants in global trade but active architects of new economic corridors that will shape global commerce for decades to come.

The Trump Factor in the Gulf’s Strategic Calculus

The return of Donald Trump to the presidency introduces significant variables into the Gulf’s energy, technology, and infrastructure strategies. His administration previously prioritized U.S. energy independence, leading to increased domestic production that reduced Washington’s reliance on Gulf oil. A second Trump term could see renewed pressure on Saudi Arabia and OPEC+ to increase production, disrupting their supply-cut strategies to maintain price stability.

On the technology front, Trump’s administration escalated tensions with China over 5G and AI, a trend that would likely intensify in a second term. This could force Gulf states into harder choices between U.S. security partnerships and Chinese technological investments. Meanwhile, infrastructure initiatives like IMEC, framed as a counter to China’s BRI, could receive increased backing—or be sidelined depending on Washington’s priorities.

Trump’s transactional approach to foreign policy also introduces greater unpredictability in U.S.-Gulf relations. His past administration’s shift away from multilateral security commitments means Gulf states may accelerate their diversification strategies, seeking deeper ties with China, Russia, and India to hedge against Washington’s unpredictability.

Ultimately, Gulf leaders will need to reassess their geopolitical positioning, balancing economic pragmatism with evolving U.S. foreign policy under Trump. Their ability to adapt to shifting U.S. priorities while maintaining strategic autonomy will be crucial in navigating the next phase of global power realignment.

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Endnotes:

1. Trump’s Energy Policy and U.S.-Gulf Relations

2. Trump’s Return and the Gulf’s Tech Balancing Act

3. Trump’s Unpredictability in the Gulf

4. Gulf States' Proven Oil Reserves

5. Saudi Arabia's Voluntary Production Cuts

6. Strait of Hormuz Oil Transit

7. Saudi Arabia's Hydrogen Investment

8. UAE's Renewable Energy Commitment

9. Qatar's LNG Expansion

10. GCC Digital Economy Projection

11. Huawei's 5G Deployment in the Gulf

12. Saudi Arabia's AI Collaborations

13. UAE's Cybersecurity Initiatives

14. Saudi Arabia's Vision 2030 Infrastructure Projects

15. Jebel Ali Port's Throughput

16. India-Middle East-Europe Economic Corridor (IMEC)

17. Saudi Arabia's Energy Relations with China

18. Saudi Arabia's Spare Oil Production Capacity

This paper has evolved over a few years of discussions and research around how China engages in party-to-party dialogue with the Arab world. This is a new area of research, so I do approach it with a degree of humility.

The China-Arab States Political Parties Dialogue (CAPPD) has become a emerging, but notable part of China’s diplomatic strategy in the Middle East. Launched in 2016, the dialogue offers the Chinese communist party a carefully structured platform for ideological engagement and political alignment with Arab elites. The CAPPD provides a forum where China’s governance model, articulated through Xi Jinping Thought on Governance and Socialism with Chinese Characteristics, is taught and socialized with Arab political elites. These exchanges allow Beijing to shape its own political narrative in the Arab world and advance its vision of a new order, one that is increasingly multipolar and aligned with Beijing’s interests.

From the CPC View

From the party’s view, their external work transcends ideological and social system divides, which positions the party as a leader in shaping a global network of political party partnerships that aim to promote stable state relations. According to Xi, political parties worldwide should enhance mutual trust, improve communication, and create new forms of party relations based on mutual respect and learning. However, the rhetoric of cooperation often is often not rooted in in the free exchange of ideas, but in positioning China’s governance model as a central point of learning for other nations. In essence, these political dialogues are part of a broader interest in aligning foreign political elites with Chinese strategic priorities.

The Party both deepened cooperation with Marxist and progressive parties globally, but also strategically engages with non-Marxist political systems to broaden the range of stakeholders—the Middle East is no exception. The CPC’s institutionalized exchanges with major countries, especially in the developing world, and with major political parties, is a structured initiative to socialize China’s political philosophy into foreign governance systems. Currently, the party maintains regular contact with over 500 political parties and organizations worldwide, creating a network for exchange and cooperation across various forms and levels. These exchanges transcend ideological and social system differences. Chinese officials are clear that this does not involve "importing" foreign models or "exporting" the Chinese model. This framing, however, is somewhat disingenuous. In practice, the CCP is exporting its governance model by showcasing the "success" of China's political system under Xi Jinping's leadership and promoting it as the key to both national and regional stability.

For more on defining this model, see my paper series on China’s approach to development in conflict areas.

The CPC’s emphasis on "cooperation over confrontation" can disguise what can be perceived as the one-sided nature of these engagements. The Party’s approach focuses on integrating China’s leadership into the political frameworks of partner states. This does allow for China to advocate greater ideological diversity - expecially in promoting ideas which either align with its own or contribute to undermine those of the west in the international system. For example, in its dialogue with Russia, China has not only deepened political trust but also strengthened its strategic partnership and underscored the benefits of alignment with Chinese interests in global governance, especially for countries on the periphery of global affairs (e.g. North Korea, Iran, and previously Syria). This approach has also helped deepen China’s footprint in Africa and the Middle East. Egypt and Algeria stand out as prominant examples.

In the Middle East context, the dialogue is an important part of China’s broader “trinity approach” (三位一体) to diplomacy, which encompasses three forms of outreach: party diplomacy, public diplomacy, and non-government diplomacy.

Together, these strands of diplomatic engagement allow China to target key segments of foreign societies—political elites, civil society, think tanks, and the general population—while using these channels to mutually reinforce its strategic image and diplomatic objectives. Through these avenues, Chinese officials work to cultivate long-term validators in Arab society beyond Middle East states by investing in cultivating the next generation of political leadership. This is an investment to ensure that Arab states’ policies and public sentiment gradually align with China’s geopolitical priorities long-term. Wang Chao, President of the Chinese People’s Institute for Foreign Affairs argued that people-to-people diplomacy is “more effective in presenting China’s political and economic standing and cultural appeal, thus fostering a more favorable public opinion of China across the world.” A number of adjacent state-linked institutions facilitate this process in coordination with the Party.

China’s United Front (统一战线工作) Work Department and its partners are known to cultivate influence overseas and bolster China’s circle of friends globally. Dubbed by Xi as the party’s “magic weapon,” the United Front is a global network of organizations, institutions, individuals, and, in some cases, intelligence entities, whose work aims, more generally, to maintain and extend the power of the Chinese state through cultivating influence in and through overseas Chinese communities in areas of strategic importance, as well as to build influence among politicians, scholars, religious and business associations, and companies of various sorts and alignments in target countries and regions. In the former context, United Front activities aim to “guide” as opposed to “leading” overseas Chinese communities to proactively participate in serving CCP agendas in the countries they reside and in activities which strengthens and supports China’s foreign policy priorities. In the latter, the Chinese leadership has revived Mao-era policies of “making the past serve the present, make the foreign serve China” (古为今用, 洋为中用), an approach of using multitrack engagements—people-to-people, party-to- party, and PRC enterprise-to-foreign enterprise—to cultivate influence among foreigners and promote China’s foreign policy objectives.

See the CPC Central Committee’s paper on the party’s external work: 宋 涛：党的对外工作是中国特色大国外交的重要体现.

Building Political Capital through Party Diplomacy

For the Middle East, the political parties dialogue primarily functions as a political elite engagement platform. The CAPPD, launched in 2016 and convened every two years, has established itself as the primary platform for political engagement between the Chinese Communist Party (CCP) and Arab political parties. Each session brings together representatives from the CCP Central Committee and political leaders from across the Arab world, facilitating direct exchanges and dialogue.

The first two dialogues, held in 2016 and 2018, took place in China under the auspices of the CCP’s International Department. However, due to the COVID-19 pandemic, the 2020 and 2022 sessions transitioned to a hybrid format, allowing for broader participation through large-scale online engagement with a wider range of Arab political parties.

At these events, Arab political leaders have participated in hands-on training sessions and received instruction in core CCP ideology, including Xi Jinping Thought on Governance, Socialism with Chinese Characteristics in the New Era, and other foundational party doctrines. Through this platform, China has cultivated relationships with Arab political figures, working to align their priorities with Beijing’s broader regional and global interests. Arab political leaders and party officials are immersed in a process of ideological training that aligns them with China’s vision of governance and global leadership. This kind of political outreach aims to deepen diplomatic ties and shape political cultures in the Arab world to ensure a sustained, ideologically-informed alignment with China’s long-term goals.

The 2023 session in Yinchuan is a prime example. This brought together political leaders, party representatives, and think tank members from 19 Arab countries and 67 political parties and organizations. Several key speakers addressed the forum to discuss China’s growing influence in the Arab world and the role of BRI. Hassan Benomar, a member of the political bureau of Morocco's Rassemblement National des Independants (RNI) and deputy speaker of the Moroccan House of Representatives, emphasized Morocco’s role as the first North African country to sign a Belt and Road cooperation agreement with China. He highlighted the significant contributions of Chinese investments in infrastructure, technology, and economic development, positioning Morocco as an important gateway in the Mediterranean region. Similarly, Saleban Daher Bile, a member of the executive bureau of Djibouti’s People's Rally for Progress (RPP) and secretary general of the Djibouti National Assembly, underscored China’s role in Africa’s economic growth, citing investments in high-quality infrastructure projects such as ports, cross-border roads, railways, and industrial zones that have created numerous job opportunities.

Jordan’s Communist Party Secretary General Saud Qubailat commended China’s commitment to fair and just international relations, expressing appreciation for the dialogue’s opportunity to witness China’s achievements firsthand. Egyptian Assistant Foreign Minister Salah Eldin Abdel Sadiq echoed this sentiment, praising China’s mediation efforts in restoring Saudi-Iran diplomatic ties and its growing role in fostering regional stability. He highlighted the belief that China’s diplomatic efforts bring significant security benefits to the Middle East, stating, “if not China, then who?” Finally, in a written address to the dialogue, Mahmoud Abbas, chairman of Fatah and president of Palestine, acknowledged China's growing influence in the Arab world and its leadership in multilateral forums such as the Shanghai Cooperation Organization (SCO) and BRICS. Abbas emphasized China’s contributions to building a multipolar world and lauded initiatives like the Global Civilization Initiative, which he described as essential for global cooperation and the well-being of humanity.

Beijing uses this platform to some extent as a public endorsement of China’s political and economic models, while also cementing China’s status as a primary partner for infrastructure development, trade, and investment. These endorsements from political elites do more than strengthen bilateral relations; they can serve as a force multiplier for China’s own image building project, to position Beijing as a reliable global power, capable of offering both economic growth and regional stability.

Economic Leverage: The Belt and Road Initiative and Beyond

Beyond political alignment, China’s growing influence in the Arab world is equally tied to economic leverage. Through infrastructure investments and trade agreements under the Belt and Road Initiative, China has managed to secure a long-term economic opportunities in the region. The CAPPD is integral to this effort by providing the diplomatic framework within which economic cooperation can flourish, which is reinforcing to the party’s own success narrative. The political leaders participating in the CAPPD often return to their countries with a renewed understanding of how China’s economic model can align with their national interests—whether through investment in infrastructure, access to Chinese markets, or support for regional development projects.

This blended party-led economic diplomacy is a unique feature of China’s outreach. By embedding itself in the development of Arab economies, the party can reinforce political discourse with state-led tangible, on-the-ground realities. Through this lens, the CAPPD acts as both a political and economic tool, allowing China to directly shape the region’s economic trajectory, while also building a foundation of trust that aligns Arab states with China’s broader geostrategic objectives.

Public Diplomacy: Shaping Perceptions Across Borders

Public diplomacy is another critical component of China’s CAPPD strategy. While political elites are the immediate targets of China’s engagement, public diplomacy seeks to foster a broader ideological shift within Arab societies. By focusing on people-to-people exchanges, media engagement, and cultural diplomacy, the party helps positions China’s image as a constructive power committed to the prosperity and stability of the region.

The public dimension of the CAPPD is particularly evident in China’s efforts to cultivate positive perceptions among Arab populations. As political leaders publicly praise China for its non-interference policy and commitment to regional peace, these endorsements can resonate throughout the broader public. Prior to COVID-19, these endorsements had little influence. But over the past few years, public sentiment in the Middle East toward China has improved, especially since Saudi-Iran deal and the Gaza war. By leveraging the CAPPD as a tool to shape public opinion, China ensures that its narrative of economic development, sovereignty, and cooperation is not only embraced by government elites but also by grassroots communities.

Non-Government Diplomacy: Expanding Influence Through Civil Society

While much of the CAPPD’s focus is on political elites, non-government diplomacy, while not a central feature, play an increasingly important role in China’s engagement with the Arab world, especially think tanks. These engagements provide China with valuable access to local intellectual networks and serve as a platform to cultivate grassroots support for its initiatives. Through the CAPPD, Beijing engages with local actors who align with its narrative of peaceful development, multilateral cooperation, and economic growth. Think tanks and similar organizations play a crucial role in legitimizing China’s presence in the region, extending support for its policies beyond government elites to broader segments of Arab society. This layer of soft power helps China counterbalance Western influence in global governance and navigate regional sensitivities by fostering a perception of China as a constructive and reliable partner. As a result, China’s influence is not only reinforced at the state level but is gradually woven into the intellectual and social fabric of the region, making its engagement more sustainable and resilient to external criticism.

Risks and Challenges: Navigating Complex Geopolitics

Despite its strategic advantages, China’s growing influence in the Arab world does not come without its challenges. Arab states are increasingly balancing relations with both China and the West. While China’s non-interference policy and economic opportunities make it an attractive partner, there are still concerns about debt dependency from BRI projects and potential backlash from the West, especially as China’s political influence grows. Moreover, the geopolitical rivalry between China and the United States means that Arab states must navigate a delicate balance, ensuring that their relationships with China do not undermine their traditional ties with the West.

Does it work?

It is very difficult to evaluate the effectiveness of China’s political parties platform. Overall, Beijing’s influence efforts in the region is, to some extent, productive in achieving the desired outcome of improving its image among local populations and cultivating greater support from political elites. But, one must be careful not to overly credit this platform, when many of the large political parties and monarchies in the region choose not to participate. They choose to engage China bilaterally through official channels.

As China strengthens its ties with Arab political elites and civil society, it will also reinforce its vision of a multipolar world where China’s leadership is not only accepted but also embraced by nations traditionally aligned with Western powers. The CAPPD serves this mission in China’s diplomatic toolbox, enabling Beijing to forge lasting relationships with Arab states, while positioning itself as a force for regional stability and global peace.

Parts of this paper are derived and updated from my previous long-form paper on Chinese influence in the eastern Mediterranian. You can read it here.

In a recent dialogue with Chinese business leaders, I was struck by how prominently concerns over economic decoupling with the United States and the trajectory of bilateral economic relations featured on their agenda. For experts in political economy and commercial affairs, this focus may seem overwhelmingly obvious. However, approaching this issue from the lens of geopolitics, security, and strategic stability offers a different perspective. My preoccupation lies not with the dynamics of trade itself but with the foundational conditions that enable commerce: peace, stability, and the physical infrastructure that sustains them.

When peace is absent or stability falters, industries suffer—though there are exceptions in war economies that thrive amidst conflict. Conversely, durable peace and stability serve as catalysts for economic opportunity and growth. This paper seeks to explore this relationship, drawing on research from institutions like the Centre for Humanitarian Dialogue and others, while examining the dual role private industry can play in either fostering or hindering peace.

This analysis is not intended to be definitive but rather to provoke a deeper consideration of how private sector actors influence the conditions that underpin sustainable economic development and political stability. The focus will largely center on the Gulf Cooperation Council (GCC) states, where the intersection of U.S. and Chinese economic interests is most pronounced. While acknowledging the broader complexity of applying this framework to the Levant—where war economies have entrenched themselves within overlapping ideological and financial structures—this paper narrows its scope to the GCC for clarity and relevance.

The GCC offers fertile ground for such an analysis. As one of the world’s most strategically vital regions, it stands at the crossroads of global energy markets, trade routes, and geostrategic competition. The economic ambitions of both China and the United States in this region underscore the potential for private industry to serve as a stabilizing—or destabilizing—force. By examining the mechanisms through which businesses can contribute to or detract from peacebuilding, this paper aims to contribute to a growing dialogue on the intersection of private industry and international stability.

The BLUF [Big Line Up Front] of this paper is simple: The premise of this paper is simple: private industry and business leaders are essential to advancing trilateral dialogue between the U.S., China, and the Middle East, and promoting stability in the Middle East. While this is not a new concept, it has gained renewed urgency as the economic interests of both China and the United States in the region grow. Engaging the private sector in stability-building efforts is not just desirable—it is a strategic necessity. Without proactive involvement, businesses risk losing access to one of the world’s most dynamic and lucrative investment markets, particularly in the Gulf Cooperation Council (GCC). Stability is not only the bedrock of sustained economic growth but also a prerequisite for realizing the region’s transformative ambitions, such as Saudi Arabia’s Vision 2030.

The global competition challenge

The GCC sits at the nexus of global power competition. Both U.S. and China strategic interests converge on the Gulf region. The region’s political and economic stability have created an environment which facilitates global trade and energy security, both shared Sino-US interests. However, U.S.-China rivalry remains the dominant paradigm in the Middle East. Both approach the Middle East with distinct agendas. Washington leans on enduring security partnerships with Israel and Gulf states to safeguard energy access and maintain regional stability, prioritizing defense, counterterrorism, and economic engagement. Beijing, by contrast, focuses on economic development through infrastructure investments and trade under the Belt and Road Initiative. This economic-centric strategy allows China to position itself as a facilitator while steering clear of political and military entanglements, a role traditionally assumed by the U.S. Yet, this divergence in strategies complicates sustained collaboration. Strategic competition dominates their global outlook, and mutual trust remains elusive.

For international and GCC businesses operating in energy, logistics, and technology, the costs of instability in the region are both immediate and severe. Supply chain disruptions, rising operational costs, and diminished investor confidence jeopardize profitability and deter foreign direct investment (FDI). Economic initiatives across the GCC—like Saudi Arabia’s Vision 2030—depend on attracting private investment in sectors such as renewable energy, tourism, and advanced technology. These opportunities are contingent on a secure environment that mitigates risks for investors and reduces the costs associated with conflict, including elevated insurance premiums and security expenses–as we saw with the Houthi attacks on Red Sea shipping.

Although the GCC is not immediately threatened by conflicts like those in Gaza or Syria, the persistent “Iran question” remains a significant concern. This decades-long crisis, though mitigated by the 2023 Saudi-Iran rapprochement, represents a residual risk, especially for sectors like energy. The potential for escalation is always present, yet often beyond the direct control of GCC states, as it hinges on the actions of external actors, including Israel and Iran.

For businesses, the stakes are clear: conflict introduces volatility and uncertainty, which ripple across the region and beyond. The October 7 war in Gaza has underscored this, reversing previous trends toward improved dialogue and escalating tensions across the region. Meanwhile, the overlay of U.S.-China competition has added another layer of complexity, further destabilizing the environment for regional industries.

GCC countries are working to balance these competing pressures to sustain an attractive business environment and secure investment. However, the highly uncertain interplay of regional conflicts and global rivalries creates persistent challenges. One solution lies in fostering dialogue. More specifically, establishing mechanisms for dialogue between the U.S., China, and Arab states. Such dialogue is not just a mechanism for mitigating conflict but aims to create a stable, predictable environment where business and peoples can thrive and contribute to the region’s long-term stability.

There is a degree of sincere skepticism I have encountered in developing this line of thinking, which argues that the interests of both U.S. and China, though they may align on fundamental issues, are more prone to pursue competition and take opportunities to undermine the other. And, that this dynamic would undermine the feasibility of trilateral dialogue. I concur with my colleagues on the realpolitik view of competition over cooperation, but my perspective seeks to find ways to bridge the divide between the U.S. and China on competition by introducing two actors into the pool for dialogue: 1) Arab states and representatives and 2) private industry. The latter I discuss here, but the latter requires a little deeper evaluation.

See “Finding US-China Complementarity in the Middle East”

Why private industry?

When I worked briefly with a strategic advisory firm on China-Middle East initiatives, I learned two interesting lessons:

Private industry has a fundamental interest in peace, stability, and market predictability for sustainable business.

The Ukraine war demonstrated how political upheaval and conflict can disrupt and reshape global industries overnight. CEOs and companies faced immense pressure to exit Russia, driven by sanctions and stakeholder demands. Supply chains were forced to adapt, while the energy landscape shifted dramatically. Russian oil became largely untouchable due to sanctions, compelling Europe to seek new energy partners. This crisis accelerated a recalibration of European energy policy, pushing many EU countries to strengthen ties with GCC states. In doing so, Europe often set aside long standing grievances over social and human rights issues, prioritizing energy security and economic stability over political differences.

Business leaders are an important channel for bridging U.S.-China relations and maintaining dialogue even when state-to-state channels breakdown.

Over the decades, individuals with deep connections in both the U.S. and China have played a crucial role in navigating bilateral challenges, especially during periods of strained government-to-government relations. Figures like Stephen Schwarzman, Ray Dalio, Henry Paulson, and Henry Kissinger have frequently stepped in to bridge gaps, leveraging their influence and networks to maintain dialogue. These efforts have spurred initiatives like the Bloomberg New Economy Forum and the Future Investment Initiative, which use industry as a platform for fostering engagement.

In the Middle East, similar leaders and the broader business community have an opportunity to create and support platforms for trilateral dialogue among the U.S., China, and regional stakeholders. By funding and hosting such initiatives, they can provide a neutral space for discussions, helping to address regional and global challenges while aligning economic and strategic interests. These efforts could make the business community a central player in advancing stability and collaboration in the region.

Private sector in peace processes

For business leaders, advocating for trilateral mediation involving the U.S., China, and regional actors is not simply a diplomatic exercise—it is a strategic investment in the economic future of the GCC and their own bottom lines.

The Centre for Humanitarian Dialogue conducted a study in 2008 of the ways the private sector has engaged in previous conflicts to support the various peace processes, and several examples are helpful for the GCC case.

In El Salvador, businesses supported peace negotiations after years of civil war made extortion and violence unbearable. A collective effort by the Salvadoran business community, driven by research into the economic costs of conflict, was instrumental in securing a peace agreement that ended over a decade of war. Similarly, in Northern Ireland, business leaders framed peace as an economic necessity, producing a "peace dividend" report that galvanized support for negotiations. These examples demonstrate the power of business to not only advocate for stability but also influence the political landscape by emphasizing the shared economic benefits of peace.

In the GCC, businesses have the opportunity to play a similar role. CEOs and industry leaders can serve as conveners, bringing together stakeholders from the U.S., China, and the Middle East to create platforms for dialogue. They can also sponsor research that quantifies the cost of instability and highlights the economic potential of peace, much like the Confederation of British Industry (CBI) did in Northern Ireland. Such initiatives would provide a compelling, data-driven case for stability, resonating with both policymakers and private-sector actors.

However, advocacy alone is not enough. The private sector must consider commitments to long-term engagement in post-conflict recovery and implementation. Historical examples illustrate the critical role businesses can play in building peace after agreements are signed. In El Salvador, companies funded education and training programs to reintegrate former combatants into the workforce. In South Africa, businesses facilitated dialogues that bridged divides and provided logistical support for the Convention for a Democratic South Africa (CODESA). GCC businesses could adopt similar strategies by investing in infrastructure, workforce development, and community programs that promote social cohesion and economic inclusion. These efforts would reinforce stability while simultaneously creating opportunities for economic growth.

Yet, achieving these outcomes requires overcoming challenges. One key lesson from Guatemala and Sri Lanka is the importance of unity within the business community. Divisions within the private sector can derail peace efforts, especially when factions prioritize short-term gains over long-term stability. In contrast, collective action by South Africa’s Consultative Business Movement (CBM) unified diverse industries to push for meaningful negotiations. In the GCC, businesses must coalesce around shared goals of stability and growth, presenting a united front to governments and international actors.

Businesses must also balance their self-interest with broader societal goals. The perception of acting solely for profit can undermine trust and legitimacy both with states and local populations. By aligning industry efforts with Environmental, Social, and Governance (ESG) principles, GCC businesses can build credibility as actors committed to the public good, especially if they can legitimately put prioritize peace and stability before profit. Maintaining neutrality is equally important. This positions the private sector as a partner in peace-building, rather than a politically motivated entity.

Without stability, the GCC’s transformative economic vision is unsustainable, and businesses will face mounting costs and diminished opportunities. By contrast, proactive engagement in trilateral mediation and peace-building ensures that the private sector not only secures its investments but also contributes to the long-term prosperity of the region. History demonstrates that businesses are not bystanders in conflict—they are stakeholders in peace with the power to shape outcomes.

As the GCC continues to navigate the complexities of global competition and regional transformation, the role of private industry in promoting trilateral dialogue cannot be overstated. Business leaders have both the means and the mandate to drive peace-building efforts, leveraging their resources and influence to create a stable, prosperous future. Failing to act risks not only losing the economic promise of the region but also ceding the opportunity to lead its next chapter of growth and innovation. Stability is not just good for business—it is essential for its survival.

The Role of Private Industry in Building Stability

Private sector engagement in peace-building is not just desirable—it is essential for ensuring regional stability and sustained economic growth. Businesses bring unique resources, networks, and credibility to the table, but their role must be earned and carefully positioned. The HD research cites several examples for business involvement in peace processes:

1. Credibility and Legitimacy: To influence peace processes, businesses must demonstrate credibility and a deep understanding of the conflict’s context. Examples from El Salvador, Mozambique, and South Africa show how businesses became trusted mediators by maintaining neutrality and aligning with broader societal goals.

2. Collective Action: Unity within the business community amplifies its impact. South Africa’s Consultative Business Movement (CBM) demonstrated how collective action can lead to meaningful peace-building, whereas divisions in Guatemala undermined private-sector influence.

3. “The Peace Dividend”: Highlighting the economic benefits of stability can galvanize support from businesses and policymakers. Data-driven approaches, like Northern Ireland’s “peace dividend” report, illustrate how peace reduces operational risks and creates predictable investment environments.

4. Social Engagement: Companies with experience engaging across diverse societal groups, as seen in Colombia and South Africa, are better positioned to foster trust and facilitate productive negotiations.

5. Platforms for Dialogue: Industry-led initiatives such as the Bloomberg New Economy Forum and Future Investment Initiative illustrate how the private sector can create neutral platforms for dialogue. The GCC, supported by regional and international business leaders, could establish similar forums for trilateral engagement among the U.S., China, and Arab states.

Takeaways for the GCC

• Proactive Private Sector Engagement: Businesses must align their economic interests with stability-building efforts, demonstrating their commitment to regional development. This is particularly critical for international investors looking to secure their long-term position in the GCC’s diversifying economy.

• Unity Within the Business Community: Maintaining a united front ensures private-sector advocacy for stability is effective. Divisions, like those in Guatemala, should be avoided to enhance influence with policymakers and regional actors.

• Fostering Dialogue and Collaboration: Establishing platforms for trilateral dialogue involving the U.S., China, and GCC stakeholders can reduce tensions and foster cooperation, ensuring the region remains attractive to global investors.

• Implementing Post-Conflict Recovery: Beyond advocacy, businesses can play a direct role in rebuilding stability by investing in infrastructure, workforce development, and community programs that reinforce peace.

• Preparing for Global Disruptions: The Ukraine war demonstrated how conflict reshapes industries and supply chains. The GCC must position itself as a stable, reliable partner to attract investment and weather global economic shocks.

Broadening the Base

Other factors cannot be excluded in the pursuit of bolstering the participation of business in peace. Effective peace-building and stability require the engagement of a broader range of actors, including non-governmental organizations (NGOs), civil society, and international institutions. NGOs often bring expertise in humanitarian response and grassroots mobilization, addressing the social and human dimensions of conflict that businesses may overlook. Civil society organizations provide essential platforms for community engagement, ensuring that peace efforts are inclusive and responsive to local needs. These actors, working alongside governments and businesses, create a more holistic approach to stability, addressing not just economic concerns but also social, political, and cultural drivers of conflict. Integrating their contributions is essential to creating durable solutions that benefit all stakeholders.

Conclusion

The Trump administration's approach to U.S.-China relations introduces significant uncertainty, particularly concerning the Middle East and the Gulf Cooperation Council (GCC). The appointment of officials with hawkish views on China suggests a potential shift from dialogue toward heightened competition. In this context, the GCC and the business community—both of which have previously engaged with President Trump—will be crucial in advocating for sustained direct and indirect dialogue. Now, more than ever, multitrack diplomacy is essential to address escalating concerns across the Middle East.

Endnotes

Centre for Humanitarian Dialogue, The Business of Peace: A Study of Private Sector Engagement in Peace Processes. Oslo Forum, 2008.

Consultative Business Movement, Submission to the Truth and Reconciliation Commission of South Africa. Johannesburg, 1997.

Confederation of British Industry (CBI), Peace – A Challenging New Era. 1994.

Vielman, G. A., Tiempo Perdido. Private Edition, Guatemala City, 1998.

Banfield, J., Gündüz, C., & Killick, N. (Eds.), Local Business, Local Peace: The Peacebuilding Potential of the Domestic Private Sector. International Alert, 2006.

Vines, A., The Business of Peace: ‘Tiny’ Rowland, Financial Incentives and the Mozambican Settlement. Conciliation Resources.

Sri Lanka First (SLF), Campaign Materials for Peace Advocacy. Colombo, 2001.

European Council on Foreign Relations, The Energy Crisis and Europe’s Response. 2022.

Fulton, J., China's Changing Role in the Middle East. Atlantic Council, 2023.

Kingdom of Saudi Arabia, Vision 2030 Strategic Plan. Riyadh, 2016.

Future Investment Initiative Institute, Annual Forum Reports. Riyadh, 2021–2023.

Bloomberg New Economy, Forum Highlights and Reports. Singapore, 2019–2023.

World Economic Forum, The Future of ESG in Global Markets. Geneva, 2022.

Addendum

Case Studies of Lessons Learned and Potential Applications for the Gulf

The following historical examples compiled by the Centre for Humanitarian Dialogue highlight key lessons from past peace processes, offering valuable insights for the Gulf Cooperation Council (GCC) and international industries as they navigate trilateral mediation and regional stability efforts. These case studies illustrate the transformative role of private industry in fostering peace and the potential applications for the GCC.

Colombia: Bridging Divides Through Private Dialogue

In Colombia, escalating violence in the mid-1990s spurred business leaders to act. Off-the-record meetings facilitated by the private sector created opportunities for dialogue between armed groups, civil society, and government representatives. Businesses also helped mobilize public support for peace through campaigns and initiatives like the Citizens’ Mandate for Peace, which garnered 10 million votes in favor of ending violence.

Lesson for the Gulf: GCC businesses can use their convening power to foster informal dialogues between stakeholders, including regional governments, international actors, and civil society. Public campaigns highlighting the benefits of peace could further bolster support for mediation efforts.

El Salvador: Aligning Economic Incentives with Peace

By the late 1980s, a decade of civil war in El Salvador had devastated the business environment. Extortion, abductions, and violence eroded economic confidence, while a rigid elite resisted reforms. However, younger, modernizing business leaders recognized the need for peace as a precondition for economic growth. The U.S.-backed Fundación Salvadoreña para el Desarrollo (FUSADES) played a pivotal role by producing research on the costs of conflict and demonstrating the opportunities globalization offered to a stable economy.

Alfredo Cristiani, a pro-business leader, won the presidency in 1989, leading swift negotiations with the opposition that resulted in police, military, and judicial reforms, as well as the demobilization of armed combatants. Businesses actively supported these efforts, including funding programs to integrate former fighters into the workforce.

Lesson for the Gulf: GCC businesses should undertake research that quantifies the economic costs of instability and advocate for peace as essential to regional development. Additionally, private industry can support post-conflict reintegration efforts, such as skills training and workforce development.

South Africa: Building Consensus Through Business Leadership

During the transition from apartheid, South Africa faced political deadlock between the government and opposition forces. The Consultative Business Movement (CBM), a coalition of private-sector leaders, played a crucial role in bridging these divides. Businesses facilitated secret meetings, convened stakeholders, and provided logistical support for the Convention for a Democratic South Africa (CODESA). Through its impartial conduct and credibility, CBM helped break impasses and sustained momentum for negotiations.

Lesson for the Gulf: Business leaders in the GCC could form coalitions similar to CBM to provide a platform for dialogue and logistical support for trilateral mediation. Neutrality and transparency are key to ensuring credibility with all parties involved.

Northern Ireland: Advocating the Peace Dividend

The private sector in Northern Ireland played a prominent role in advancing peace talks during the 1990s. The Confederation of British Industry (CBI) published a landmark "peace dividend" paper that quantified the economic benefits of ending violence, including reductions in security costs and increased investment in tourism and trade. Business leaders collectively lobbied political parties, emphasizing the stark choice between peace and economic prosperity or continued stagnation.

Lesson for the Gulf: GCC businesses can commission and disseminate similar research demonstrating the economic dividends of stability. This would help mobilize public and governmental support for trilateral mediation and peace-building initiatives.

Guatemala: The Perils of Division Within the Business Sector

Guatemala’s peace process following its civil war in the 1990s was marred by divisions within the private sector. While some businesses supported negotiations, others opposed them, believing a military solution was preferable. The lack of unity weakened the private sector’s influence, undermining progress.

Lesson for the Gulf: The GCC business community could present unified position in pursuit of peace and stability to avoid the pitfalls of factionalism. Collective action is crucial for amplifying the private sector’s voice and ensuring effective participation in peace-building processes.

After a recent visit to KSA in November 2024, I was fascinated by Kingdom’s focus on investment in and cultivating a local semiconductor ecosystem amidst global competition around their production. I decided to do a paper to help readers develop a better accessible understanding of the dynamic.

Saudi Arabia’s efforts to integrate into the global semiconductor supply chain are grounded in its Vision 2030 strategy, which aims to diversify the kingdom’s oil-dependent economy and position it as a leader in technology and innovation. The country’s vast energy resources, growing emphasis on advanced manufacturing, and ambitious digital transformation projects place it in a strong position to contribute to and benefit from the semiconductor industry. However, achieving this vision requires overcoming significant challenges and developing a coordinated manufacturing and use econosystem.

Energy as an Advantage for Semiconductor Manufacturing

Semiconductor fabrication plants - also known as fabs - are among the most energy-intensive facilities, requiring constant and reliable power supplies to operate at the precision needed for chip production. Saudi Arabia’s abundant energy resources—particularly its low-cost oil, gas, and growing renewable energy capacity—offer a unique advantage.

The kingdom’s investments in renewable energy projects, such as the $500 billion NEOM city and its accompanying green hydrogen initiative, signal a shift toward sustainable energy production. By aligning its renewable energy ambitions with the needs of semiconductor manufacturing, Saudi Arabia could present itself as a destination for fabs seeking energy resilience and sustainability. This could prove especially attractive to global semiconductor leaders looking to diversify their production base beyond East Asia.

NEOM and Semiconductor-Driven Digital Transformation

The NEOM project represents a cornerstone of Saudi Arabia’s technological ambitions. Envisioned as a fully integrated smart city powered by renewable energy, NEOM is designed to incorporate cutting-edge technologies, including artificial intelligence, the Internet of Things (IoT), and advanced robotics. These systems rely heavily on semiconductors to function effectively, creating a natural demand for advanced chips.

NEOM’s promise as a “living laboratory” for semiconductor-enabled innovation extends beyond its digital infrastructure. By situating research and development (R&D) facilities within NEOM or similar zones (such as the King Abdullah Science and Technology University), Saudi Arabia could establish itself as a hub for semiconductor applications, from renewable energy grids to autonomous systems. Collaborations with international semiconductor companies could also bring expertise, technology transfer, and investment to the kingdom.

Advanced Manufacturing and Industrial Zones

Saudi Arabia’s commitment to building an advanced manufacturing sector is evident in initiatives like the King Salman Energy Park (SPARK) and the Jazan Economic City. These industrial zones are designed to attract high-tech industries, including those related to semiconductors. The country’s strategy involves leveraging its existing energy and logistics infrastructure to support semiconductor assembly, packaging, and testing operations, which require less technical expertise than full-scale fabrication but are critical components of the global supply chain.

Additionally, the Saudi Industrial Development Fund (SIDF) offers financing and incentives to attract foreign investment in high-tech sectors. By targeting semiconductor firms looking to expand their manufacturing base, Saudi Arabia could position itself as a regional leader in semiconductor assembly and testing and attract global talent. But this will take time as its capacity matures.

Human Capital Development

One of Saudi Arabia’s key challenges in developing a domestic semiconductor industry is the shortage of technical expertise required for chip design, fabrication, and testing. Recognizing this gap, the kingdom has prioritized education and workforce development through initiatives like the Human Capability Development Program under Vision 2030. Partnerships with leading universities and research institutions, as well as scholarships for Saudi students in science, technology, engineering, and mathematics (STEM) fields, are designed to build the human capital necessary for a high-tech economy.

Saudi Arabia could accelerate this effort by establishing specialized training centers focused on semiconductor manufacturing and R&D. Collaborations with global chipmakers, such as Intel or TSMC, could provide training programs and internships that fast-track the development of a skilled workforce.

Strategic Partnerships and Investment

Saudi Arabia’s Public Investment Fund (PIF), a key driver of Vision 2030, has the financial resources to secure strategic partnerships with global semiconductor companies. The PIF could invest directly in chipmakers or R&D initiatives, leveraging its capital to attract technology and expertise to the kingdom. For example, partnerships with firms specializing in renewable energy-related semiconductors or AI applications could align with Saudi Arabia’s broader economic goals.

Moreover, Saudi Arabia’s growing diplomatic and trade ties with China, a global leader in semiconductor consumption and an emerging player in production, present additional opportunities. While maintaining its longstanding security and economic relationship with the United States, the kingdom could position itself as a bridge between the two superpowers in the semiconductor supply chain.

Areas to Watch

Alat, established in February 2024 by Saudi Arabia's Public Investment Fund (PIF), is a strategic initiative aimed at transforming the Kingdom into a global hub for electronics and advanced industries. A central focus of Alat is the development of a robust semiconductor industry within Saudi Arabia.

• Semiconductor Manufacturing: Alat is dedicated to establishing a comprehensive semiconductor manufacturing ecosystem in Saudi Arabia. This includes the production of semiconductors across three primary technology segments: Power, Perception, and Processing. Alat

• Strategic Partnerships: In March 2024, Alat entered into a partnership with the King Abdulaziz City for Science and Technology (KACST) to bolster the semiconductor industry. This collaboration focuses on localizing semiconductor manufacturing, fostering research and development, and nurturing a skilled workforce tailored to the sector's needs. Alat

• Sustainable Manufacturing: Aligned with Saudi Arabia's Vision 2030, Alat emphasizes sustainable industrial solutions powered by clean energy. The initiative aims to contribute to the Kingdom's goal of achieving net-zero carbon emissions by 2060. Vision 2030

• Economic Impact: By 2030, Alat aspires to create approximately 39,000 direct jobs and contribute over $9.3 billion to Saudi Arabia's non-oil GDP. This endeavor is part of a broader strategy to diversify the national economy and reduce reliance on oil revenues.

Challenges to Saudi Arabia’s Semiconductor Strategy

While Saudi Arabia has made significant progress in laying the groundwork for a semiconductor ecosystem, several challenges remain:

High Barriers to Entry: Semiconductor fabrication requires advanced expertise, precision engineering, and significant capital investment. Entering this sector will take years of sustained effort and collaboration.

Global Competition: Countries like Taiwan, South Korea, and the United States dominate the semiconductor industry, while other emerging players, such as India and Vietnam, are rapidly developing their capabilities.

Geopolitical Risks: Saudi Arabia’s balancing act between the U.S. and China could complicate its semiconductor ambitions, particularly as export controls and technology restrictions intensify.

Opportunities for Saudi Arabia in the Global Semiconductor Ecosystem

Despite these challenges, Saudi Arabia has several pathways to integrate itself into the global semiconductor supply chain:

Regional Leadership: By leveraging its energy resources, advanced industrial zones, and digital transformation projects, Saudi Arabia can position itself as the GCC’s semiconductor leader, setting an example for neighboring states.

Collaborative Ecosystem: Fostering partnerships with global technology firms and GCC peers could create a regional semiconductor hub that combines energy, logistics, and innovation.

Focus on Applications: Instead of competing directly in advanced chip fabrication, Saudi Arabia could focus on semiconductor-dependent applications, such as renewable energy systems, autonomous vehicles, and AI technologies, aligning with its economic diversification goals.

Other Recent Investments

• National Semiconductor Hub: In June 2024, Saudi Arabia launched the National Semiconductor Hub, aiming to attract 50 semiconductor firms by 2030 to build design expertise within the kingdom.

  Semi Engineering

• AI Investments: The Saudi government is in discussions with venture capital firms to establish a $40 billion fund dedicated to artificial intelligence initiatives, which include semiconductor technologies.

  Fast Company ME, New York Times.

Additional Reading:

• Saudi Vision 2030 Official Document. Vision 2030. Government of Saudi Arabia, 2016. https://www.vision2030.gov.sa/en.

• "Saudi Arabia's Expanding Role in Advanced Technologies." Diplomatic Courier, 23 March 2023. https://www.diplomaticourier.com/posts/saudi-arabias-expanding-role-in-advanced-technologies.

• "Saudi Arabia Launches 'National Semiconductor Hub' to Drive Industry Localization." Arab News, 15 June 2024. https://www.arabnews.com/node/2524301/business-economy.

• "Saudi Arabia Makes Significant Moves in Semiconductor Sector with Strategic Investments." Arab News, 10 September 2024. https://www.arabnews.com/node/2566001/business-economy.

• "From Vision to Reality: Saudi Arabia’s Bold Tech Strategy for 2030." Edge Middle East, 7 February 2024. https://www.edgemiddleeast.com/business/from-vision-to-reality-saudi-arabias-bold-tech-strategy-for-2030.

• "Saudi Arabia's National Semiconductor Hub: Attracting SR1 Billion Investment and Establishing 50 Companies for Chip Design." Saudi Press Agency, 25 July 2024. https://saudipress.com/saudi-arabia-s-national-semiconductor-hub-attracting-sr1-billion-investment-and-establishing-50-companies-for-chip.

• "Saudi Arabia's Tech Transformation: Embracing AI and Semiconductors for a New Era." Al Arabiya English, 26 January 2024. https://english.alarabiya.net/News/saudi-arabia/2024/01/26/Saudi-Arabia-s-tech-transformation-Embracing-AI-and-semiconductors-for-a-new-era.

• "Saudi Arabia Boosts Chip Ambitions, Launches Semiconductor Hub." MIT Sloan Management Review Middle East, 20 February 2024. https://www.mitsloanme.com/article/saudi-arabia-boosts-chip-ambitions-launches-semiconductor-hub/.

Jordan often punches above its weight class due to its strategic geography and diplomatic prowess. Beyond this, it has struggled to fully develop its economy and pull itself out of the mire of economic deterioration. The Kingdom’s leadership has anchored its future to foreign aid and preferential trade with the United States, GCC countries, and the EU, but this has forced the Kingdom into an increasingly complex geopolitical posture.

Jordan’s Strategic Outlook

Jordan heavily depends on foreign aid to support its economy. A semi-arid country, it lacks substantial natural resources and grapples with economic challenges, including economic stagnation, high debt-to-GDP ratio, staggering unemployment, and limited growth. The nation receives significant development and humanitarian assistance from Gulf countries like Saudi Arabia and the UAE, as well as from European and U.S. partners. This aid helps manage issues arising from regional conflicts, social instability, and the presence of millions of refugees from neighboring countries. Despite these challenges, Jordan maintains a degree of security that appeals to foreign governments, who view the country's stability as beneficial to regional stability and worthy of ongoing support. 

The role of the Jordanian monarchy, particularly under King Abdullah II, is pivotal in shaping the country's foreign policy and securing international support. Through high-level diplomatic engagements with leaders from major powers like the US, Russia, and China, Jordan postures itself itself as a key player in regional stability and counterterrorism. The US is Jordan's largest aid provider, with substantial economic, military, and direct budget support flowing into the country, underscored by agreements that ensure continued aid. Jordan's reliance on this support underscores a synergy where aid is exchanged for stability, a principle fundamental to Jordan’s strategy in maintaining and enhancing its international relations. While Jordan engages diplomatically with various nations, its connections with the US are particularly strong, limiting the depth of its ties with US competitors. 

Jordan’s future stability will be greatly shaped by its ability to diversify its sources of income and move away from aid dependency in a way which does not profoundly undermine domestic stability. Jordan’s leadership seeks alternative sources of support, such as from China’s Belt and Road Initiative and critical infrastructure financing. However, Jordan faces a complex array of domestic challenges that any alternative partner must be capable of addressing. These include shoring up Jordan’s national security, stabilizing the economy, and maintaining the existing monarchy’s stability. However, any major shifts or attempts to reform the Kingdom’s economic posture often fuels popular backlash, exemplified in Jordan’s tumultuous negotiations with the International Monetary Fund over state reforms. Meanwhile, major economic initiatives aiming to expand Jordan’s access to critical resources have consistently run into roadblocks, especially when they include neighboring Israel. A recent water for energy deal brokered between Israel, the UAE, and Jordan has received major pushback in Jordan, and created greater political pressure on the Jordanian government as it balances the woes of cooperation with Israel, especially during the current Gaza war. 

Economic Diversification without De-Americanization

Jordan is currently nearing the final year of its 2020-2025 national development strategy, which has aimed to improve economic performance and reorient the economy towards export-led growth. The success of this initiative however has faced significant headwinds - COVID-19, multiple wars in Gaza, refugee crises, and the fallout of the Ukraine war - as crisis after crisis has tested the durability of Jordan’s economy. 

Jordan needs new economic partners. Its current menu of U.S., EU, and Gulf partners are critical to its long-term sustainability, but the Kingdom’s current approach has not delivered on its economic ambitions, nor has it translated to major progress for its increasingly frustrated population. 

For several years beginning in 2015, Jordan looked to China as a potential economic partner, and the two explored deepening cooperation under the Belt and Road Initiative. For their part, China’s leadership explored investing billions into Jordan’s infrastructure to serve as a potential launchpad for supporting reconstruction efforts in Syria and Iraq. The two signed a number of memorandums of understanding to explore a range of infrastructure projects, including a railway and shale-energy generation. However, Sino-Jordanian cooperation did not yield any major fruit, and the myriad of plans largely fell through. The one project which did come to fruition was the Chinese-owned Atarat shale oil plant, which has become a diplomatic sore spot for Jordan due to accusations of debt-trap diplomacy and a hefty $8.4 billion Jordan will be required to pay under the 30 year power purchasing agreement. Furthermore, since 2017, Jordan has suffered a major trade deficit as a result of a severe trade imbalance with China. This trade imbalance has grown from $2.5 billion in 2017 to a staggering $4.9 billion in 2023. 

experiment with Jordan’s economic diversification through China showed the pitfalls low-to-middle income countries can run into when exploring state-to-state deals with China. The two maintain cordial diplomatic and political ties, but Jordan has largely left bilateral commercial ties with China to the private sector and has looked elsewhere to diversify its economy. China will remain a central market for Jordanian importers, but Jordan may look to broaden its access to new import markets to reduce overreliance on China.

Regional Diversification and the Case for IMEC

Diversification will be critical for Jordan to weather headwinds in the global economy and in its own, but this diversification will likely evolve from within the U.S. broader geoeconomic network of partners and allies. For Jordan’s leadership, this largely requires doing more business with its largest existing trade partners and finding ways to capitalize on new geoeconomic initiatives entering the region. BRI was one such initiative. While the BRI offered some benefits, it did little to advance Jordan's broader goals of economic development and stability, nor did it actually translate into a substantial increase in Chinese exports of Jordanian goods. 

Jordan’s largest asset remains its geography and its stability. This makes it both a critical node for regional trade and a potential home base for many companies seeking to enter the Middle East market. However, the Kingdom has struggled to incentivize economic investment and foster the growth of industry. Part of this is linked to security, but other social, political, and economic factors also hinder new business from entering the market. For nearly a decade, the Kingdom has sought investments for new critical infrastructure - a railway network, energy projects, water projects, and more. Few of them have practically seen the light of day due to complications and a challenging political environment which often quells the projects in the earliest stages. Part of the challenge is that most of these projects are linked to Jordan’s neighbors - Iraq, Saudi Arabia, and Israel. Regional politics can make negotiating business across borders difficult due to the burden of history and sociopolitical baggage, especially when pursuing business with Israel. Jordan has found success in negotiating business directly with European partners through deals such as the Jordan Compact - a deal for Jordan to provide employment for Syrian refugees in exchange for priority export access to Europe’s markets. However, these initiatives often result in few actual improvements in Jordan’s exports due to the blockage of land routes via Syria and expensive maritime trade costs via Aqaba. 

For Jordan to break out of its current economic posture, it needs both better integration into the regional economy of the Middle East and the global economy. This means better access to supply chains, logistics, land and maritime routes, capital investment, technology, and knowledge transfer - all things it currently lacks.

On September 9, 2023, the United States signed a joint memorandum of understanding with Saudi Arabia, Germany, France, Italy, and the UAE to build the India - Middle East - European Economic Corridor (IMEC). The IMEC proposed developing an alternative to China's BRI and the "Middle Corridor" to foster economic growth by improving connectivity and economic integration among Asia, the Arabian Gulf, and Europe. The IMEC envisages the establishment of two fresh economic corridors. The eastern route would link India with the Arabian Gulf, while the northern route would connect the Arabian Peninsula to Europe via a railway. This railway aims to offer a more economically efficient cross-border ship-to-rail transit network, linking India, the UAE, Saudi Arabia, Jordan, Israel, and onwards to Europe. Components of the corridor include laying cables for electricity and digital connectivity, as well as pipes for exporting clean hydrogen. It further aims to strengthen regional supply chains and improve trade accessibility for participating countries. 

The real benefits for the IMEC lie with the major MOU signatories, especially India, the GCC countries, and Europe. Jordan offers perhaps the smallest geographic contribution to the IMEC, in that the physical components of the corridor will pass through southern Jordan, connecting Saudi Arabia to Israel. But those few miles of railroad, pipeline, and cables could be transformative to Amman by linking the Kingdom to thousands of miles of economic benefits. 

IMEC would bring vital infrastructure investment to Jordan, kickstarting its connectivity to a cross-border railroad network. Although initially linking only southern Jordan to the broader corridor, IMEC's impact would be transformative for Jordan's infrastructure goals, paving the way for future connectivity projects, including rail networks with Iraq and Turkey.

IMEC offers Jordan an opportunity to boost its economy, catalyze domestic industry growth, and broaden access to both existing and new export markets. By diversifying trading partners and reducing reliance on any single market, Jordan can fortify its economy while maintaining its strategic ties with the United States. The corridor's strategic route opens doors to new international markets, potentially amplifying export volumes and stabilizing the economy against market fluctuations. Additionally, infrastructure enhancements under IMEC could slash business costs and streamline logistics, enhancing the overall efficiency of doing business in Jordan. 

IMEC members are Jordan’s top existing export markets, with India and Saudi Arabia ranking second and third respectively and Europe as a highly desired market. Jordan’s connectivity to the IMEC infrastructure will enable it to reap the benefits of economic activities and trade moving both western to Europe and eastward to India. This would streamline Jordan’s ability to increase its trade volume at a faster rate with reduced costs, potentially lowering the costs and barriers for Jordanian companies to access the new markets. If planned effectively, this offers one major outlet through which Jordan can stimulate local job growth, reduce unemployment,  and bolster many of its nascent manufacturing industries to begin scaling their export capacities. 

To secure IMEC’s benefits, Jordan’s leadership will need to take critical steps in line with other IMEC investors and partners to open up its regulatory and business environment to facilitate and stimulate local growth, attract international investors, and sustain those investors. Scaling two new trade corridors will require extensive coordination between signatories to address a broad range of legal, technical, design, financing, and regulatory standards to govern both the development, sustainment, and expansion of the corridors. While Jordan has yet to sign the MoU, it will need to closely monitor and, if possible, lend its voice to the development of the coordinating entities leading the IMEC process. 

Expanding Ties with India

Jordan has seen significant growth in its trade ties with India, and IMEC could deepen bilateral ties and expand Jordan’s access to India’s massive domestic market and facilitate bilateral investment opportunities. At a macro level, Jordan and India maintain friendly political and diplomatic ties. India’s Prime Minister Shri Narendra Modi and King Abdullah II coordinate on issues of critical importance for Jordan, especially Israeli-Palestinian issues. While India maintains strong ties with Israel’s political leadership, India’s political support for Palestinian statehood and Jordan’s role in the peace process has reinforced for Jordan’s leadership a solid foundation on which the two have built a broad portfolio of exchanges and partnerships. This covers a wide range of areas, including trade and investment, political cooperation, technology, health, defense and security, and development.

While Jordan is not yet formally integrated into either the I2U2 or IMEC grouping, it has seen steady benefits in its economic ties to India. While China is one of Jordan’s biggest trade partners, there is a significant trade imbalance between the two valued at roughly $4.3 billion in 2023 in China’s favor. Whereas with India, whose economy dwarfs Jordan’s own, has maintained a more equal trade balance, which has grown by nearly 140% since 2017.  

One specific industry which stands to benefit is Jordan’s potash mining and exports. The Arab Potash Company - Jordan’s major provider of potash and other minerals and fertilizers - is one of Jordan’s most productive sectors with business ties to India. This would allow Jordan to lower the cost of critical mineral exports and help broaden Jordan’s export potential in India. China is a major shareholder in Jordan’s potash market, but the pan-Arab owned company could leverage the opportunity to diversify their customer base through the IMEC corridor. 

Jordan’s Strategic Value

Jordan may not be a major economy within the IMEC, its role as a political and diplomatic actor cannot be overstated. 

The last two nodes of the northern corridor require perhaps the most diplomatic and political jockeying to secure - the Jordan to Israel linkages. Any major initiatives which are perceived to deepen Jordanian-Israeli ties will likely face major pushback in Jordan, the Palestinian territories, and the broader Arab world. The current war in Gaza shows that nonstate actors like Hamas and the Houthis in Yemen hold a level of veto power as well through the use of force to destabilize any extensions in Israel. This residual instability will be a major impediment to the final realization of a northern corridor to Europe. 

Another major factor shaping the future of the northern IMEC corridor is the potential for Israel-Saudi normalization and the cadence of political developments this could initiate, ranging from a U.S.-Saudi defense pact and Saudi pressure for Israel to agree to some form of timeline in the creation of a Palestinian state. These geopolitical uncertainties will shape the future development of the northern corridor and have a profound effect on regional stability for the foreseeable future. 

Jordan plays a crucial role in overcoming these obstacles and establishing the necessary conditions for completing the northern corridor. Despite the sensitivity of Israeli-Jordanian relations, cooperation exists at operational levels, and broader economic initiatives within the U.S. network of partners, offering both economic and political advantages, are likely to progress to some extent. Both Jordan and Israel exhibit caution in deepening ties with China, preferring to strengthen connections with the Arab Gulf and India, which promise significant benefits.

Furthermore, Jordan's involvement is essential in garnering support from within the Arab world for the initiative, particularly as the U.S. faces criticism for its stance in the Gaza conflict. While the restoration of the U.S. image in the region remains uncertain, Jordan can and should advocate for its participation in the IMEC and leverage its diplomatic position to potentially playing a pivotal role in the near to mid-term. Despite challenges in integrating IMEC beyond Jordan in the short term, Jordan could still benefit from the eastern corridor by securing connectivity to Saudi Arabia during periods of instability and open up its access to markets in India and beyond. 

© Jesse Marks