Iraq is one of China’s largest partners in Belt and Road Initiative as China expands Middle East role

Iraq is at the receiving end of some of China’s largest investments under the Belt and Road Initiative, according to a news report published in the Jerusalem Post Monday. 

Last year, Iraq received $10.5 billion in investments under the Belt and Road Initiative with China investing in oil plants, roads, school and green energy projects. 

China launched the Belt and Road Initiative – the land-based “Silk Road Economic Belt,” and sea-based “21st Century Maritime Silk Road” – in 2013. The BRI has massively extended China’s presence in Central and South Asia, the Middle East, Europe, Africa and Latin America through an enormous network of roads, railways, tunnels, dams, airports, ports, energy pipelines, power plants and telecommunications networks.

In the Middle East, China has signed cooperation agreements with 19 Arab countries for construction projects under the Belt and Road Initiative (BRI), according to a report by China Daily, a Chinese government news outlet. The report specified that an increasing number of cooperation projects were taking place in areas of electricity, communication, industrial parks, nuclear energy and satellites. 

When it comes to energy, Iraq is now China’s third largest partner within the Belt and Road Initiative with Russia and Pakistan taking first and second place, respectively. 

“In my opinion, Iraq being the third-largest BRI country says a number of things: first of all, that Iraq is a less controversial investment than Iran, that it has a great deal of untapped potential and easier access than Iran. And also, that the Iraqi government and people are easier to negotiate with and to do business with than Iranians,” Carice Witte, the founder and executive director at SIGNAL – Sino-Israel Global Network & Academic Leadership, said. “The Chinese have always found it extremely difficult to do business with Iran and there is a lot of unpublicized tension in Iran-China relations. Due to China’s dependence on Saudi and Gulf energy, they feel it’s important to cultivate another significant source of oil. Iraq is a very young market that needs to grow, needs everything and has a way to pay for it (unlike Syria which has limited oil reserves and Lebanon which has none). When you think about it, Iraq is the ideal venue for China in the Middle East.”

China’s investments in the Middle East rose by about 360% in 2021 compared to 2020, according to a report from Fudan University’s Center for Green Finance and Development in Shanghai. Construction projects increased by 116% in 2021 compared to 2020. 

China is already the Middle East’s largest trading partner and that trade is only likely to grow. In August, the fifth China-Arab States Expo took place in China, during which agreements between China and Arab countries worth an estimated $24 billion in investments were made. In a letter to the China-Arab Expo, President Xi Jinping wrote that China was “ready to…elevate China-Arab strategic partnership to a higher level, and jointly build a China-Arab community with a shared future for the new era”.

To bring about that “higher level of strategic partnership,” China and the Arab League are currently preparing for the first China-Arab summit, scheduled to take place in Saudi Arabia in 2022. In July, Chinese Foreign Minister Wang Yi visited Egypt, Algeria and Syria – having already visited six other Middle Eastern countries on his tour of the region in March. 

During his visit to Egypt, he and the secretary-general of the League of Arab States, Ahmed Aboul Gheit, made a joint statement in which they said that the China-Arab summit would “constitute a qualitative leap to advance Arab-Chinese relations and the Arab-Chinese strategic partnership to broader horizons.”