BRI’s Future and Saudi Arabia-Iran Peace Agreement
Most recently, Chinese track-II diplomacy has succeeded to achieve a “diplomatic miracle” by brokering a peace deal between Saudi Arabia and Iran which has even further brightened scope, importance and utility of the One Belt & One Road Initiative (BRI) and China-Pakistan Economic Corridor (CPEC). It is indeed positive, productive and participatory which create win-win propositions for both the countries.
The two countries inked a holistic and comprehensive agreement which includes mutual respect for sovereignty and non-interference in each other’s internal affairs. It also activates a 2001 previously-signed security cooperation and trade agreement which is indeed a “value addition”. Moreover, it brightens the scope of greater socio-economic integration, regional connectivity, peace, stability and harmony between two countries in and beyond.
It has now further strengthened the Chinese presence in the GCC and MEAN. Hopefully, it would further consolidate the Chinese President Xi Jinping’s Global Security Initiative (GSI) position, scope, importance and utility in the region.
Interestingly, it has certain winners and losers. China, Saudi Arabia, Iran and, of course, people of the GCC and MENA are the immediate winners whereas Bahrain, Iraq, Lebanon, Oman, Syria and Yemen should be treated as secondary beneficiaries of this sustainable diplomatic breakthrough.
Even Chinese BRI may also be included in the list of potential winners which may also be useful in the implementation and completion of the CPEC, being the flagship project of the BRI. Regional as well as international energy and food security sectors are also the real beneficiaries of this peace agreement. Pakistan, being the close neighbouring country and trustworthy friend of China, Saudi Arabia and Iran would be in the queue of “distant winner” in the days to come.
Most recently, Wang Yi, Director of the Office of the Foreign Affairs Commission of the Communist Party of China (CPC) Central Committee hosted a dialogue between the two Middle Eastern countries in Beijing. He pledged China to continue to play a constructive role in handling hotspot issues. During the maiden visit of the Iranian President Ebrahim Raisi to China, both leaders pledged to develop friendly cooperation to promote China-Iran comprehensive strategic partnership for new development.
Beijing will continue to jointly build the BRI cooperation with Iran, aiming to step up interconnectivity and expand people-to-people and cultural exchanges. According to official data (December 2022), bilateral trade volume between China and Iran has reached $11.16 billion between January and August 2022, a 19 percent year-on-year increase. China’s exports to Iran stood at $6.214 billion, up 24 percent year-on-year, while imports were at $4.946 billion, 14 percent higher year-on-year during the same period.
Last year, the two countries jointly announced the launch of the implementation of the 25-year comprehensive cooperation plan amounting to US$420 billion agreeing to step up cooperation on energy, infrastructure, production capacity, science and technology, and medical and health care. In this regard, the two leaders vowed to implement the Iran-China Comprehensive Cooperation Plan and called for strengthened cooperation in various fields, such as trade, infrastructure and agriculture.
Raisi also called for Chinese enterprises to visit Iran for investment and business, expecting more Chinese tourists to visit Iran. Supporting and actively participating in the BRI, the Global Development Initiative (GDI), and the Global Security Initiative proposed by China, Raisi said Iran will maintain good cooperation with organizations such as the Shanghai Cooperation Organization (SCO).
On the other hand, the Kingdom of Saudi Arabia is one of the biggest recipients of the BRI investments in the GCC and MENA. Most recently, Saudi Arabia and China agreed on jointly coordinating investment in the countries of the BRI. For the further strengthening of bilateral relations, on the invitation of King Salman bin Abdul-Aziz Al Saud of the Kingdom of Saudi Arabia, President Xi Jinping attended the first China-Arab States Summit and the China-GCC Summit in Riyadh and paid a state visit to Saudi Arabia from December 7 to 10 2022.
During his visit to Saudi Arabia both countries agreed to extend their mutual win-win cooperation in the diverse sectors of economy, energy, green initiatives, infrastructure development, joint ventures, ICT, Artificial Intelligence (AI) and education and culture in which BRI would play a vital role in the days to come. China has always considered Saudi Arabia as a strategic partner and both countries strive for further alignment between the Saudi and China visions of the future, especially in the energy sphere, Xi added.
Moreover, both countries agreed to further strengthen their relationship such as oil and petrochemicals, de-carbonization technologies, electricity and renewables, hydrogen, energy efficiency, civil nuclear energy and supply chain security, in addition to industrial cooperation, the fourth industrial revolution, mining and logistics, civil aviation and aviation security and digital economy.
One of the largest deals between China and Saudi Arabia on the BRI is signed between Saudi Arabian Oil Company (Saudi Aramco) and China Petroleum & Chemical Corporation (Sinopec). According to the MoU, the companies will jointly assess refining and petrochemical integration opportunities; engineering, procurement and construction; oilfield services, upstream and downstream technologies and in the areas of carbon capture and hydrogen processes.
China is Saudi Arabia’s largest trade partner. Bilateral trade reached a total of US$87.31 billion, according to China’s National Bureau of Statistics (NBS). This was a year-on-year growth rate of 30.1 percent. Of this, Chinese exports to Saudi Arabia reached US$30.32 billion, up 7.9 percent year-on-year, while Chinese imports from Saudi Arabia reached US$56.99 billion, up 46 percent year-on-year.
To conclude, China, Pakistan, Saudi Arabia and Iran have common interests of joint regional connectivity, immense socio-economic prosperity, infrastructure development, cooperation in hydropower, green energy, agriculture, health and industrialization and last but not least, further integration and coordination about the development of BRI and CPEC and this peace agreement hopefully would further enhance mutual cooperation.
It seems that rapidly changing socio-economic, geopolitical and geostrategic conflicting realities have encouraged regional rivals Saudi Arabia and Iran to stop belligerence and start best spirits of cooperation and coordination to achieve common goals of socio-economic prosperity, regional peace and stability.
Economics is the new dawn of the new globalization era and most recently inked peace agreement between Saudi Arabia and Iran would facilitate flourishing of immense economic activities in the region in the days to come.
The policy makers of Pakistan should chalk out a comprehensive roadmap to reap fruits of this regional, trans-regional and global peace agreement which should be used for the further strengthening of CPEC onward march towards west connecting South Asia with Central Asia and the Middle East.
