China’s mediation of the Saudi-Iran normalization agreement signals a potential break from its long-standing policy of keeping to a minimal and economically oriented regional footprint. By successfully bringing two of the Middle East’s bitterest rivals to the negotiation table, China aims to build credibility as a capable partner in a region that has at times protested American security disengagement and bemoaned Washington’s strategic neglect.

Amr Hamzawy
Amr Hamzawy is a senior fellow and the director of the Carnegie Middle East Program. His research and writings focus on governance in the Middle East and North Africa, social vulnerability, and the different roles of governments and civil societies in the region.
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Yet China’s ability to achieve its proclaimed objectives of peacefully resolving Middle Eastern conflicts and realizing regional stability will now be put to the test. The Saudi-Iranian agreement to normalize and uphold the principles of national sovereignty and noninterference will depend on the policies of regional actors themselves—Iran in particular. Although Saudi Arabia intervened in Bahrain in 2011 and has been militarily involved in Yemen since 2016, the Islamic Republic’s policy toward the Middle East—which is interventionist in nature, by both historical and ideological design—needs to be revised. This could be achieved by curtailing Iranian support for nonstate actors and withdrawing from aggressive campaigns in Iraq, Lebanon, Syria, Yemen, and the Gulf.

Welcoming the Chinese

Economically speaking, the Middle East has long embraced Beijing. China’s trade in the region has skyrocketed since the turn of the twenty-first century and continues to expand, increasing from $180 billion in 2019 to $259 billion in 2021. Meanwhile, Middle Eastern trade with the United States has declined from $120 billion in 2019 to $82 billion in 2021. China continues to develop its economic ties across regional divides, cementing its position as the largest trading partner to regional powers such as Egypt, Iran, Jordan, Kuwait, Saudi Arabia, and the UAE.

Historically, China has shied away from involvement in conflicts or taking a direct stand on thorny disputes. Rather than challenge U.S. hegemony and post–Cold War military predominance in the Middle East, China’s position as a secondary great power has allowed it to free ride on the American security umbrella without incurring the same security costs and without facing the same strategic dilemmas. This appears to be changing. By mediating the Saudi-Iranian normalization agreement, China is veering into new territory, expanding its regional footprint from economic exchange to negotiated conflict resolution.

China’s change in approach has been welcomed by regional actors hoping to finally bury the hatchet of a decades-long rivalry—one that has had significant spillover since the Arab Spring. Since 2011, escalations in the Saudi-Iran rivalry have exacerbated and entrenched regional conflicts that have fueled proxy wars in Yemen. They’ve also frustrated stabilization efforts in Iraq and led (among other factors) to a protracted crisis in Lebanon and a political stalemate in Syria. The 2019 drone and missile attacks on Saudi Arabia and the UAE further shook Gulf Arab confidence in U.S. guarantees, which were dealt a serious blow by the signing of the Iran nuclear deal. The 2019 attacks also called into question the American security architecture in the Middle East. To regional actors, China’s promise of peaceful conflict resolution has come to offer a potential (but untested) path forward.

China’s modus operandi of negotiated settlements is also attractive to a region that has varyingly criticized U.S. administrations since 2011 for their strategic withdrawal and bristled at failed American interventions in Iraq, Libya, Syria, and beyond. While China may be able to tout its mediation of the Saudi-Iran agreement as a diplomatic success—one that has long eluded the United States—Saudi Arabia and Iran must actually live up to the agreement. Whether its mediation efforts bear fruit moving forward is not up to China, and what these attempts will mean for the Middle East and for future Chinese involvement in the region is an open question.

As it wades into stormier political waters, China will have to confront strategic challenges that compromise its show of neutrality. The success of its new Middle Eastern strategy will depend on local realities on the ground—chiefly Iranian regional policy.

Solutions or Status Quo?

Central to the Saudi-Iranian agreement is the mutual pledge to “non-interference in [the] internal affairs of states.” Whether the deal succeeds at de-escalation or meaningfully alters the regional status quo will largely be determined by Iranian foreign policy, succeeding only if Tehran curtails its support for the Houthis in Yemen, Shia forces in Iraq, Hezbollah in Lebanon, Hamas in Palestine, and President Bashar Al-Assad in Syria. On all these fronts, the ultimate policy goal must be that Iran has to moderate. Unless Tehran demonstrates a real break with the interventionist policies of its past, the Chinese-mediated deal will be dead in the water.

Disengagement from the Yemeni arena may hold the most promise. For Saudi Arabia, withdrawal would be low-hanging fruit. Riyadh has wished to disentangle itself from the conflict in Yemen for some time, looking for an acceptable exit from its stalemate with its southern neighbor and supporting U.N. mediated ceasefire agreements. For Iran, this presents an opportunity to demonstrate the sincerity of its intentions, proving its respect for national sovereignty and desire for regional stability to Saudi Arabia and China alike.

Through cooperation with the kingdom, Iran could pressure its Houthi allies to accept a shared governance arrangement with the Gulf-backed Yemeni forces, urging both sides to cement their temporary truce as a permanent peace treaty to end the conflict. Doing so would chart a path toward restoring Yemen’s internal stability and securing Saudi Arabia’s southern border. To preserve its interests and save face, Tehran can also assure its Houthi allies a leading position in government, scoring a diplomatic victory as a capable and responsible actor while still ensuring that control over the critical Bab al-Mandab Strait does not fall into unsympathetic hands.

By fulfilling its noninterference pledge, Iran can safeguard its national interests while still demonstrating its reliability as a strategic ally of China in the region. Moreover, in exchange for ensuring the cessation of Houthi hostilities in Saudi Arabia and its neighbors, Tehran could demand similar security guarantees from the Gulf Cooperation Council, including a commitment that the Arab states deny the United States or Israel access to their airspace in the event either actor pursues military action against the Islamic Republic. Iran is already demanding that Riyadh withhold its funding of antagonistic media, such as the London-based Iran International.

Progress in Iraq, Lebanon, and Syria is less likely. The normalization of diplomatic ties with Saudi Arabia and the potential for mutual security pledges mediated by China are not enough to motivate a sudden reversal of Tehran’s policies. China and Saudi Arabia should not hold their breath for a breakthrough, as a decade’s worth of policy reconfiguration would be needed to achieve stability in Iraq; bypass sectarianism, corruption, and chronic state failure in Lebanon; and reach a political agreement in Syria. A more realistic expectation would be for Iran to gradually wean its proxies off its support, eventually bringing endless stalemates sustained by outside interference to a gradual close.

Desperately in need of another economic lifeline besides Russia and China, Iran may also find more willing trading partners among the Gulf states. Oman, Qatar, and the UAE would be likely supporters, eager to expand their existing commercial ties with Iran. By preserving normalization with Saudi Arabia, Tehran would be better positioned to overcome its regional and international isolation, with direct benefits to its citizens. For example, improved ties with the kingdom would allow Iranian pilgrims easier entry on their Meccan visits.

In an ideal—if unlikely—scenario, these demonstrations of goodwill could do more than appease Iran’s Arab neighbors. Tehran would lessen its isolation and strengthen its diplomatic position vis-à-vis the United States and Europe. It could lobby for restoring talks about its nuclear program and for a negotiating path to address Western sanctions. Rolling back sanctions gradually would unshackle Iran’s ailing economy and may enable the regime to improve the deteriorating living conditions of its citizens. Although the failed renewal of the Iran deal casts fundamental doubts about the Islamic Republic’s willingness to move away from developing nuclear weapons, enhanced regional stability and greater access to global markets might still motivate it to pull back from its frantic arms race and prioritize urgent economic recovery.

As its top trading partner for ten years and counting, China is uniquely positioned to keep Iran to its word, though Beijing’s willingness to do so remains uncertain. It is clear, however, that China has made an ambitious gamble in mediating between the two countries. Where the dice falls will depend on how much pressure it is willing to stake, and—to a much greater extent—how Iran and Saudi Arabia choose to behave.

China’s Role in the Great Power Competition Over the Middle East

Moving forward, China will have to decide what role it wishes to play in the region: diplomatic fixer, military patron, or disinterested economic titan. While it is too early to anticipate—let alone expect—transformations in China’s regional status, its recent forays into Middle Eastern diplomacy suggest wider geopolitical interests. (The inaugural China–Arab States Summit held in Riyadh in December was a case in point.)

Whether Beijing’s zero-conflict policy can insulate it from diplomatic pressures to draw definitive geopolitical alignments is unclear. Nevertheless, China will need to navigate these new geopolitical waters in considered ways. In sustaining a Saudi-Iranian rapprochement, China may find itself alienating an unenthusiastic Israel. A zero-conflict approach must also not gloss over the Middle East’s perennial cause, Palestine, if China is to maintain its credibility with Arab publics. In grappling with these competing interests, China’s regional policy of strategic hedging may inadvertently evolve into full-blown power balancing. An ascending China may hold promise for a multipolar Middle East, but it will also need to confront and overcome the same pitfalls as the United States if it is to tangibly alter the regional status quo.

For the United States, expanding Chinese involvement need not be seen as a threat. China cannot—and does not wish to—usurp the United States’ role as the dominant military power in the region. Its expanded geopolitical activity may in fact open avenues for greater cooperation with the United States, leveraging regional relationships that Washington lacks—with China’s strong commercial ties with Iran serving as an example. Because the two great powers are in agreement on some of their core interests in the region—including securing the flow of global energy and ensuring freedom of navigation—the United States would be wiser not to pressure its Arab allies into mutually exclusive partnerships. Rather than fearing and fueling a cold war in the Middle East, Washington should reevaluate its priorities in the region and consider ways in which engagement with Beijing could produce net-positive, stabilizing effects.

A multipolar competition in the Middle East may well be in the making, but perhaps not vertically and not overnight. Great powers would do well to respond to realities on the ground by listening to local actors and adapting to changing regional concerns. American unipolarity is no longer tenable, and perhaps it would better serve the interests of the United States to move with the times.