BICOM

China’s increasing involvement in the Middle East could threaten vital UK interests in the region due to differences over Iran policy, Chinese arms exports and Chinese investment in key locations where UK forces are deployed.

China and the UK have shared interest in the Middle East including stable energy prices and supply and both have a shared interest in keeping open the Strait of Hormuz, a potential area for mutual cooperation alongside overall regional stability.

The report found that while China’s military deployments in the Middle East are small, China’s trade and economic leverage towers above the UK. This outsize influence could cause a clash with the UK on Iran as China continues to purchase Iranian oil and undercuts attempts to sanction Iran. China has also played an important role in Iran’s ballistic missile programme, viewed by the UK as a threat to regional security, particularly after cruise missile strikes on Saudi oil facilities in September. A further challenge is that Britain’s military installations in the region may in future depend on Chinese-financed ports and logistics centres. For example the UK’s forthcoming permanent naval and army desert training centre at Duqm, Oman is due to be built in an area where China is investing $10 billion in infrastructure.

Key findings from the report:

• While both China and the UK support the JCPOA Iran nuclear deal, the UK is moving towards the US position and views Iran as a destabilising player in the region which should be confronted and constrained. China-Iran trade is worth $37bn, its third largest trade partner in the Middle East after Saudi Arabia and the UAE.
• China is Iran’s largest arms supplier, and has been a key partner in Iran’s military modernisation and nuclear development, as well as supporting the development of Iranian ballistic and cruise missiles.
• China’s growth in arms sales present a challenge for the UK’s arms industry particularly in the Gulf where the UK has placed a moratorium on arms sales to Saudi Arabia
• In 2017, Chinese trade in the Middle East was worth $219.79bn. This compares to $58.21bn for the UK, and $134.08bn for the US
• ​​​​​​​The US administration estimates that 50-70% of Iranian oil exports go to China

The full briefing is available as a PDF below.

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