U.S.-China Economic and Security Review Commission, "Hearing: China and the Middle East (Webcast)," June 6, 2013

Thursday, June 6, 2013
Dirksen Senate Office Building, Room 608
Washington, DC 20002

Hearing Co-Chairs: Commissioners Jeffrey L. Fiedler and James Talent

Opening Statement of Commissioner Jeffrey Fiedler

Good morning and thank you for joining us. Today’s hearing on “China and the Middle East” is the sixth hearing of the 2013 Annual Report cycle. We appreciate your attendance and we encourage you to come to our other public events throughout the year. Our next hearing will be on June 27, on Macau and Hong Kong. Details will be forthcoming on the Commission’s website, uscc.gov.

Today’s hearing will examine China’s relations with the Middle East. Our first panel will assess the motivations behind Beijing’s engagement with the region, and explore how Chinese policymakers perceive the Middle East in the context of China’s broader economic and strategic objectives. While China’s engagement in the region pales in comparison to that of the United States, there are indications that Beijing may take a more forward-leaning approach to the Middle East. For instance, some Chinese scholars have advised that Beijing adopt a new foreign policy emphasizing its political and economic ties to countries in the Middle East and Central Asia. This policy, referred to as “March West,” appears to be under consideration by policymakers in Beijing. In addition to discussing Beijing’s evolving strategic thinking about the region, this panel will also examine China’s engagement in the region, which ranges from strategic partnerships, to military exchanges, to free trade agreement talks.

In our second panel, we’ll call on witnesses to describe China’s economic interests in the region. For centuries, China had robust ties with this part of the world by virtue of the Silk Road. Today, China’s economic ties to the region are strong and growing. Foremost among China’s economic interests in the Middle East is energy. China must increasingly rely on imported oil and gas to fuel its economy, and over one-half of China’s oil imports come from the Middle East. According to the International Energy Agency, by 2035, 90 percent of Middle Eastern oil will be exported to Asia. Most of that oil will go to China. But energy is not Beijing’s only economic interest in the Middle East. China seeks markets for its exports, and investment opportunities. And despite political risks throughout the region, Chinese companies, many of them state-owned, are indeed “marching west” to the Middle East.

Our third panel will examine China’s approaches to political and security challenges in the Middle East. Beijing was caught off guard by the changes wrought during the Arab Spring. In Egypt and Libya, China struggled to come to terms with regime change and scrambled to protect its citizens and investments abroad. In Syria, Beijing’s refusal to punish the Assad regime has hindered international efforts to address the conflict. Similarly, with Iran, China has worked to soften U.S. and international sanctions in Tehran. This has frustrated not only the United States, but also Middle Eastern countries concerned about Iran’s nuclear capabilities and its generally threatening posture. Finally, this panel will look at China’s approach to maritime security in the Middle East.

Before I turn the microphone over to my colleague Senator Talent, I would like to thank Senate Budget Committee Chairwoman Patty Murray and the entire staff of the Senate Budget Committee for helping to provide today’s hearing venue.

Opening Statement of Senator James Talent

Thank you, Commissioner Fiedler, and welcome to our panelists and guests.

China’s engagement with the Middle East is of particular importance to the United States given our country’s multifaceted interests and investments in that part of the world. China is expanding its economic, diplomatic, political, and security presence in and around the Middle East. The better America understands China’s approach to the region, the better prepared we will be able to respond in a way that promotes peace and prosperity.

In light of China’s growing footprint in the Middle East, we ask the following questions: Will China contribute to political stability and economic growth in the Middle East? Will China seek to match or challenge U.S. influence in the region? What impact will China’s massive appetite for Middle Eastern oil have on global energy security? Will China’s continued friendship with Iran undermine U.S. national security?

The answers to these questions are complex, and so far, China’s relationship with the Middle East has resulted in a range of outcomes, some of which complement U.S. interests, and some of which undermine them. For example, Chinese investments are underwriting key development projects in the Middle East, from highways and railways to power stations, irrigation systems, and housing. Chinese investments in Iraq’s energy sector may enable enormous post-war growth while bringing substantial new oil supplies online. Such engagement has the potential to contribute to stability and economic productivity in the region. On the other hand, however, Beijing’s support of regimes in Syria and Iran have undermined international efforts to stem violence and human rights abuses in the former, and to stop the development of nuclear weapons in the latter. In these and other cases, China’s activities detract from peace and security in the region.

We have a number of highly qualified expert panelists today to help us assess these issues and suggest how the United States might appropriately respond.

I would like to remind the members of our audience that all of the written statements submitted for the record are available on our website, uscc.gov. A transcript of today’s hearing also will be published on our website at a later date. And the testimony at this and other hearings will help to inform our Annual Report to Congress, which will be published in mid-November.

We ask that the panelists limit their opening remarks to seven minutes each in order to leave plenty of time for questions and answers.

Panel I:  China’s Perspectives and Policy in the Middle East
Dr. Dawn Murphy, Postdoctoral Research Fellow, Princeton-Harvard China in the World Program.
Dr. Yitzhak Shichor, Professor Emeritus, the Hebrew University of Jerusalem and the University of Haifa.

Panel II: China’s Energy and Other Economic Interests in the Middle East
Dr. Erica Downs, Fellow, John L. Thornton China Center, Brookings Institution.
Mr. Bryant Edwards, Partner, Latham and Watkins LLP, Hong Kong.

Panel III: China’s Political and Security Challenges in the Middle East
Dr. Jon B. Alterman, Director, Middle East Program, Center for Strategic and International Studies.
Dr. Joel Wuthnow, Research Analyst, China Studies, CNA.
Dr. Andrew Erickson, Associate Professor and founding member, China Maritime Studies Institute, U.S. Naval War College.

You can see a video of the hearing at: http://www.uscc.gov/Hearings/hearing-china-and-middle-east-webcast