Transcription
What is the common point between this port, these oil storage tanks, or this railway line? They were all built or financed by China, and they are all threatened by missiles exchanged between Iran, the United States, and Israel. Looking at this, I asked myself a question. Is China the big collateral victim of this war in the Persian Gulf? The biggest issue for China is oil. It imports more than half of its oil from the Middle East because since 2024, China has become the main trading partner of the Gulf countries, ahead of the United States and Europe combined. They exchanged 257 billion dollars. This accusation that China could financially strangle the six oil and gas monarchies of the Arabian Peninsula does not make much sense. My name is Fleur Bron, I am a journalist at Les Échos, and today I will explain to you how China is injecting billions into the Middle East.
It is first a question of geography. For Beijing, the Middle East is an ideal stopover between Asia, Africa, and Europe. The region is in the middle of the routes of the new Silk Roads, a project initiated by Xi Jinping in 2013 when he came to power. It is intended to allow China to easily import and export products and to extend its economic influence globally. Thirteen years later, these investments are breaking records. In 2025, China spent 213.5 billion dollars on this strategy, equivalent to the GDP of Hungary. Today, there are more than 150 partner countries, and among them are the Middle Eastern countries. The relationship between China and the Middle East is anything but anecdotal. Benaouda Abdim is an editorialist at Les Échos, a specialist in international affairs. We are truly in a relationship of mutual interest, with the idea also that to project an image of global power from the Chinese side, it is absolutely necessary to have the Middle Eastern states with them because they have the financial means, because they represent an alternative to American hegemony in China's view.
China has first invested in major transport infrastructure. In 2016, for example, the Chinese company COSCO Shipping signed a 738 million dollar agreement to build a container terminal at Khalifa Port in the United Arab Emirates and can operate it for 35 years. In 2022, Kuwait signed a 4 billion dollar contract with a Chinese company for the development of Mubarak Al-Kabeer Port. Several Chinese companies are also participating in the construction of the United Arab Emirates railway network. It will connect several ports to the commercial and industrial hubs of the Arabian Peninsula. The Chinese construction company CRCC notably obtained a 1.25 billion dollar contract for the construction of 145 km of line. Well, I won't list them all for you, but to give you an idea, in Saudi Arabia alone, China spent almost 20 billion dollars on construction in 2025. The strategy of establishing Chinese companies in the Arabian Peninsula largely consists of offers deemed ultra-competitive in international tenders. So, in short, it's about providing the best turnkey solution to these countries to build a port terminal, to build a road. For China, the interest is simple: to have infrastructure to circulate its products. For poor and rather weak countries like Iran, China will export toys, t-shirts, all the most basic consumer goods. Raphael Baleyrie is a journalist and correspondent for Les Échos in China and is speaking to us from Shanghai. For richer countries, Dubai or the Gulf countries, it can export its solar panels, its technologies for desalination, for energy storage in agriculture, and for production in the middle of the desert. It also exports its artificial intelligence, its smartphones, and so on. And it is precisely these high-value-added technologies that China has been trying to export more of in recent years. Now, since China has strong brands and also very strong technologies, what it wants is rather to keep the value chain in China and keep the technological know-how in China, but to export it because it is abroad that the margins are higher. Since 2021, for example, Chinese electric vehicle exports to the Middle East have exploded. China has also positioned itself on artificial intelligence. We will talk about that a little later, but we will stay for a few more minutes on China's investment strategy. Some analysts speak of a debt trap. Beijing finances infrastructure at low cost, which the beneficiary countries then struggle to repay. Beijing can then negotiate the exploitation of its infrastructure. This is what happened in Sri Lanka, for example. Is the Middle East concerned? This accusation that China could financially strangle the six oil and gas monarchies of the Arabian Peninsula does not make much sense. One only needs to look at how the sovereign wealth funds of these countries are endowed. That of Qatar, for example, has exceeded 1,000 billion dollars. So comparing Qatari financial power to that of Sri Lanka or Zambia makes absolutely no sense. We must really take into account the fact that these states have the means for their policies, have the means to finance their public infrastructure, and are not in a relationship of dependence on Chinese capital, nor in a relationship of dependence on Chinese state-owned construction companies. But this does not prevent China from massively financing their economic ambitions. Loans granted by Chinese banks to the region reached a record level in 2025, 15.7 billion dollars. The majority is intended for Saudi Arabia and the United Arab Emirates. With the war in Iran, a question arises. Could China's debtors default? China is quite worried, and so it has asked its Chinese banks to evaluate their exposure to the Middle East, to report figures, and therefore to be more cautious. So this shows a certain nervousness. But Chinese banks are truly public giants supported by the state, so as soon as there is a crisis, there will be no banking crisis in China because of the Middle East.
If China can avoid a banking crisis, can it escape an oil crisis? China needs oil and gas. The Middle East possesses a lot of it. So China is interested in the Middle East. The biggest issue for China is oil. It imports more than half of its oil from the Middle East, and even 13% if we look only at Iran. The main destination for oil from almost all the Gulf petro-monarchies is China. Before the war, Beijing also bought more than 80% of Iranian crude oil. It had developed a sophisticated clandestine system to evade international sanctions. And above all, this Iranian oil is much cheaper than non-sanctioned oil. But well, the small problem is that the war in Iran blocks the Strait of Hormuz, through which half of China's needs pass. In the short term, there will not be a strong impact on China's oil supply because China first has strategic reserves. They are equivalent to about 200 days of imports from the Middle East. Second, it has diversified its oil suppliers a lot, and so we have seen how it suddenly turned to Russia, to West African countries like Angola to buy oil. Beijing has also anticipated risks and invested billions to avoid depending solely on the Strait of Hormuz. China National Petroleum Corporation has built the Abshan Fujairah pipeline, which allows oil to be exported without passing through this strategic passage. The Chinese company Sinopec also owns 50% of a major oil terminal in Fujairah, which has 36 storage tanks. And this terminal is located outside the Strait of Hormuz. Today, Chinese banks are financing the expansion of a liquefied natural gas plant in Qatar, and Sinopec has become the first Asian shareholder in the North Field East gas project in Qatar. But what Beijing may not have foreseen is this. Since the capture of President Maduro, some Venezuelan oil exports have been seized by the United States. Now, China imported oil from Venezuela. Well, the country was only a secondary supplier. It represented only 4% of China's total maritime imports. But this oil notably repaid Caracas's huge debt to China. In short, this makes the Persian Gulf China's energy focus. But it is not only for its oil that the region is so strategic. New technologies, and particularly artificial intelligence, have become priority objectives for Beijing. The Middle East has become a major arena for economic confrontation between the United States and China. The idea that the United States is waging a war against Iran to ultimately destabilize China is an idea that is widely found in Iranian media, particularly private economic media, because the United States is concerned about China's power in the region. They have proof of this because when Donald Trump visited the region in May 2025, he obtained promises of investment worth hundreds of billions of dollars from the United Arab Emirates, Saudi Arabia, and Qatar in artificial intelligence infrastructure, semiconductors, and pillars of the digital economy in the United States. Donald Trump obtained that the United Arab Emirates, in particular, renounced a number of sensitive technological partnerships with China. This is the case of G42, an Emirati company specializing in artificial intelligence. To be able to buy chips from the American company Nvidia, G42 had to cut its ties with Chinese companies, notably Huawei. Behind this technological battle, there is also a battle of influence taking place in the region. In the Middle East, China seeks above all to have economic rather than military influence. It is notably for this reason that it does not want to intervene in the war in Iran. But nevertheless, it is moving diplomatic pieces in the region. China is becoming an important diplomatic actor in the Middle East. It has worked towards the rapprochement between Iran and Saudi Arabia. On the other hand, militarily, China does not want to intervene militarily because, in return, it does not want other countries to interfere in its own internal problems. Well, if it does not intervene militarily, it counts on it from an economic point of view. In February, the Chinese state arms manufacturer Norinco inaugurated a light armament factory in Kuwait. For the moment, China has opened only one military base in 2017 in Djibouti, in the immediate vicinity of the port of Dorale. Its army trains, conducts exercises, collects intelligence, and escorts merchant ships. The Chinese are perfectly aware that they cannot offer a turnkey security, a protection umbrella, similar to that of the United States. And they are not looking for it either. In the meantime, the United States is pressuring China to help it unblock the situation in the Strait of Hormuz. China is worried about the military and economic repercussions of this conflict. Donald Trump and Xi Jinping were supposed to meet at the end of March 2026, but this visit was postponed due to the war in Iran. Thank you very much for watching this analysis. Tell us in the comments if you would like us to analyze other facets of Chinese power. Don't forget to subscribe to our channel so you don't miss our next videos. P9. Objective 4, strengthen. I understand people who do SMR a bit. It's very tempting when you have a microphone like this.