Interpretation of West Asian and North African Nations Five Connectivity Index——FIVE CONNECTIVITY INDEX REPORT(2018)

April 25, 2019
About the author:Liao Baizhi[1], Research Professor, Deputy Director of Institute of Middle East Studies, China Institute of Contemporary International Relations

 

The Five Connectivity Indexes of the 16 nations in West Asia and North Africa in 2017 present the following characteristics: the overall rankings drop sharply compared with 2016. Among them, except for Turkey's ranking remaining unchanged, Iran is the only country that achieves positive growth, rising from the 38th to the 29th. The UAE and Egypt, which have the smallest declines of the remaining 14 nations, drop 14 and 15 places respectively. Yemen and Syria, which have the bigger declines,even drop 30 and 32 places respectively.

 

The growth rate of the Five Connectivity is relatively slow. The scores of most nations have not changed significantly compared with 2016. For example, Qatar scores 63.48 in 2016, and 63.38 in 2017, but its ranking drops from the 7th to the 24th. Even though Egypt, Jordan, Iraq, Yemen and other nations raise their scores, their rankings fall sharply, indicating that the 16 nations in West Asia and North Africa maintain only a common growth rate on the Five Connectivity, which is smaller than other nations.

 

There is still plenty of room for improvement. The average score of 16 nations is 51.28, which is lower than the nations along the routes,with an average score of 55.25. Although these nations are still at the level of good cooperation (50-60 points), the overall scores and rankings are relatively low. Among them, no country scores more than 70 (the level of smooth cooperation), 4 nations are at the level of inter-connectivity (60-70 points), 6 nations are at the level of good cooperation, and 3 nations are at the level of potential for cooperation (40-50 points). Syria, Yemen and Palestine, which are at the bottom, score below 35.

 

Table 9-1: The scores and rankings of West Asian and North African nations on the Five Connectivity Indexes

 

I. The 4 nations at the level of inter-connectivity

 

In this region, Turkey earnt the highest score on the Five Connectivity, indicating that China-Turkey relations made great progress in 2017. First, it benefited greatly from the attention and promotion of the top leaders of both nations. In April of that year, Vice Premier Liu Yandong visited Turkey, and then Turkish President Erdogan came to China to attend the Belt and Road Forum for International Cooperation and met with President Xi Jinping. It was the fourth meeting of the two Presidents in three years. At the end of the year, Turkish Deputy Prime Minister Simsheek visited China. Erdogan repeatedly stated that Turkey was an important node for the Silk Road to the European continent and hoped to benefit from it. Therefore, he endeavored to synergize the Belt and Road Initiative with the Turkish Central Asian Economic Corridor Project. The national high-speed rail network,the cross-sea bridge project and the Caspian high-speed rail, developed by the Turkish cabinet, are all highly compatible with the Belt and Road Initiative. The exchange mechanism between both sides has been improved. The Vice Foreign Ministers’ consultations, parliamentary exchanges, vice-premier-level consultation mechanism, and a joint working group mechanism covering the fields of diplomacy, interior, security and intelligence have been established.

 

Second, both nations have made progress in the connection of facilities. At the end of September 2017, a financing agreement on the Turkish high-speed rail project was reached, with a total amount of USD45 billion. China planned to provide a loan of USD28 billion. The project contains 16 railway lines with a total length of 5371 kilometers, which is the longest and most expensive in the international high-speed rail construction projects. In addition, Huawei obtained the contract for Turkey's 5G network construction in March 2017. ZTE purchased Naitas, Turkey's largest Internet communications company, for more than USD100 million. Alibaba Cloud officially entered the Turkish “cloud storage” service market.

 

Figure 9-1: Tier III indicators on the facilities connectivity of the 4 nations at the level of inter-connectivity

 

Third, in terms of financial integration, Turkey is a founding member of the AIIB with a 2.52 percent stake; in March 2017, Bank of China spent USD300 million to set up a branch in Turkey. Industrial and Commercial Bank, Development Bank, Export-Import Bank, Bank of China, Export & Credit Insurance Corporation and other branches in Turkey have formed a complete financial insurance credit service system.

 

Fourth, people-to-people and cultural exchanges are close. With the concern about the Belt and Road rising among the Turkish society, universities, chambers of commerce, etc. regularly held related seminars and promotion conferences. The Turkish academic community even called on the government to give unconditional economic and strategic support to the Belt and Road Initiative to help the Turkish economy take off. Tourism cooperation between the two nations developed rapidly. In 2017, a total of 247,000 Chinese tourists went to Turkey, an increase of 47.57 percent over 2016. In May 2016, both sides reached a cultural exchange agreement to set up cultural centers in each other's countries, which has been successfully implemented in 2018. However, China is Turkey's second largest trading partner and the largest source of imports, and has maintained a trade surplus of more than USD20 billion with Turkey for many years. Owing to the similar economic structure of both sides, the problem of trade deficit has always been difficult to resolve, which has become an obstacle for the two nations to further strengthening cooperation.

 

The UAE ranked fourth on the Five Connectivity Indexes in 2016. Although it fell to the 19th place in 2017, and dropped from the level of smooth cooperation to inter-connectivity, the UAE in fact is a key country along the Belt and Road, and its level of Five Connectivity with China is increasing smoothly. Trade, economic and investment cooperation are the highlights of bilateral relations. At present, the UAE is China's largest export market and the second largest trading partner in the Arab world. In 2017, the bilateral trade volume was USD40.98 billion, up 2.3 percent year-on-year, of which China exported USD28.71 billion to the UAE. The two-way investment showed a growing momentum, with more than 3,000 Chinese companies setting up their subsidiaries or offices in the UAE. In particular, in February 2017, the UAE awarded Chinese companies a combined 12 percent stake in Abu Dhabi's onshore oil concession, the first time for China to acquire stakes in upstream cooperation in an oil-producing country in the Middle East. In July, Jiangsu Province and its partners of the UAE signed “The Investment Cooperation Agreement on the China-UAE Industrial Capacity Cooperation Demonstration Zone” (this agreement was implemented in May 2018 when President Xi Jinping visited the UAE). At present, Chinese companies are paying more and more attention to the UAE's radiation effect on the regional market. The UAE has become a distribution center for China's merchandise exports to the Middle East and Africa, and 70 percent of the exports are re-exported to other nations. In the field of people-to-people and cultural exchanges,the UAE unilaterally granted Chinese citizens a 30-day visa-free entry at the end of 2016. After that, more and more Chinese citizens came to the UAE for tourism, leisure, investment, business, work and study. At the end of 2017, both sides reached a mutual visa exemption arrangement. In the meantime, China, as the guest of honor, participated in the 27th Abu Dhabi International Book Fair, in which “Xi Jinping:the Governance of China ” was first published in the Gulf nations and was highly valued by the UAE government. In the field of financial cooperation, the two nations signed a currency swap agreement worth 35 billion yuan; established mutual investment funds worth USD10 billion; also reached a principled consensus on the establishment of an RMB clearing center in the UAE, with a scale of 50 billion yuan. Abu Dhabi International Financial Centre opened its first office in China and planned to cooperate with the Shanghai Stock Exchange to provide directional services for projects of the Belt and Road Initiative. The financial cooperation between both sides has broad prospects.

 

Qatar’s scores on the Five Connectivity Indexes have remained almost unchanged in 2017 compared with 2016 scores, indicating that China- Qatar cooperation had not been affected by the “blockade” on Qatar from Saudi Arabia, UAE, Egypt and Bahrain in June 2017. On the contrary, in order to break through the blockade, Qatar entered a period of intensive diplomacy, during which China was one of the key partners. In August of that year, Qatar announced the implementation of the visa-on-arrival policy for 80 nations including China, and China immediately became the fastest growing source of tourists in Qatar. Trade between China and Qatar has been growing faster than that between China and other nations along the Belt and Road. The bilateral trade volume in 2017 was USD8.08 billion, of which China exported USD1.68 billion and imported USD6.4 billion, up 46.2 percent, 11 percent and 59.4 percent respectively. In particular, in the energy field, China's natural gas imports increased by 46 percent in 2017, most of which came from Qatar. In the field of infrastructure construction, China Railway Construction Corporation Limited has undertaken the construction of the main stadium for Qatar 2022 World Cup, which is the most important project in Qatar. The Hamad Port, which is one of the largest ports in the Middle East, was built by China Harbor Engineering Company and officially opened at the end of 2016. At the beginning of 2017 and in September, two "China Gulf Expresses (Shanghai - Hamad)" were opened, so that Qatar would not need to re-export through the UAE, but import goods directly from China.

 

Iran is the only country with a large increase both in rankings and scores, mainly due to the establishment of a comprehensive strategic partnership between the two nations during the visit of President Xi Jinping in January 2016. Since then, the high-level exchanges between China and Iran have been close. In 2017, Vice Premier Liu Yandong and Chen Yuan, vice chairman of the National Committee of the Chinese People's Political Consultative Conference, visited Iran successively. In the field of facility connectivity, the Export-Import Bank of China raised USD1.5 billion for the Tehran-Mashhad Railway project in August 2017. In addition, the trains from China's Yiwu, Yinchuan and other places to Tehran via Kazakhstan and Turkmenistan, have begun to operate. In 2017, the bilateral trade volume reached USD37.18 billion, with an increase of 19.0 percent year-on-year. However, since Donald Trump was elected President of the United States, he has been increasing sanctions against Iran, which have curbed the growth of trade between China and Iran. Chinese companies have repeatedly been listed on the sanction list. In particular, ZTE Corporation was fined nearly USD100 million in March 2017. In addition, because the United States has been refusing to lift financial sanctions against Iran, financing and funds-in/funds-out in Iran have become a problem. In the field of people-to-people bond, China and Iran do not have fundamental differences and both oppose American hegemonism. However, Iranians generally complain about the quality of Chinese goods, and even question the sale of Chinese inferior goods to Iran Owing to cultural differences between the two nations, there is a general negative impression of "Iran has a lot of frauds "or "Chinese are too smart."

 

II. The 6 nations at the level of good cooperation

 

Saudi Arabia, Oman and Kuwait are all oil-producing nations in the Gulf. The domestic political situations are all stable in these three nations. They are all important energy partners of China,which are respectively China's second, fourth and ninth largest sources of crude oil imports in 2017. Especially, Oman exports 70 percent of its crude oil to China, which is the biggest guarantee for the stability of bilateral relations. In the field of policy communication, following the visit of President Xi Jinping to Saudi Arabia in January 2016 and the signing of a comprehensive strategic partnership, King Salman paid a return visit in March 2017. Chia- Kuwait relations are also stable. In August 2017, Vice Premier Zhang Gaoli visited Kuwait.

 

High-level visits have greatly facilitated bilateral relations. For example, China and Saudi Arabia announced that they would place each other in a priority position in their foreign relations, and signed a Memorandum of Understanding and a letter of intent, involving 35 cooperation projects worth a total of USD65 billion. Kuwait Emir Sabah has visited China seven times, which is the most among the leaders of Gulf States. Kuwait is one of the nations that have been supporting the Belt and Road Initiative in the most active way. Saudi Arabia and Kuwait have established consultation and exchange mechanisms with China at different levels, from the Crown Prince to the ministries, which are responsible for synergizing their respective economic transformation strategies (Saudi Arabia’s 2030 Vision, Kuwait’s Silk City and Five Islands Planning) with the Belt and Road Initiative in infrastructure, energy, communications and other fields. For example, in August 2017, Vice Premier Zhang Gaoli visited Saudi Arabia to host the second meeting of the high-level joint committee.

 

Oman and China have fewer exchanges of visits due to the health of Oman’s leader Qaboos. As Oman adopts a neutral diplomacy and rarely participates in regional and international affairs, China- Oman relations are more oriented to trading partners. China has been Oman’s largest crude oil export market for the last 10 years, and has been actively supporting Oman’s determination to carry out economic transformation and construction of the Dokum Industrial Zone, the largest economic zone in the Middle East.

 

In the field of people to people and cultural exchanges, the National Museum of China held the “Arab Road – Saudi Arabian Unearthed Cultural Relics Exhibition” in 2017. President Xi Jinping and King Salman personally presided over the closing ceremony. Salman also attended the opening ceremony of the Peking University branch of the Aziz King Library, and received an honorary doctorate from Peking University. In addition, the two nations have also actively cooperated in pilgrimage organizing, international student education, tourism, joint production of cartoons and joint archaeological excavations. Oman is an important intersection of the ancient Silk Road, which the Zheng He fleet visited four times. The two nations enjoyed profound historical and cultural ties, and jointly hold many cultural exchange activities. In October 2017, Oman also granted visa-upon-arrival to Chinese citizens.

 

Figure 9-2: Radar-graph of Tier III indicators on people-to-people bond of the 6 nations at the level of good cooperation

 

However, some problems have also been exposed in bilateral cooperation. For example, Saudi Arabia has adopted a policy to reduce the proportion of foreign workers in order to increase its own employment rate, and the Saudi Arabian image is relatively negative in Chinese people. Moreover, because Saudi Arabia, UAE, Bahrain and other nations severed ties with Qatar in June 2017, the GCC was severely divided, and the China- GCC FTA negotiation was also forced to pause. Finally, although Bahrain is also a Gulf country, it is small and lacks resources, and its trade volume with China was only USD1.027 billion in 2017, 90 percent of which was exported by China. The cooperation in political, economic and cultural fields has been smooth, but there will be limited room left for improvement in the future.

 

Cooperation between China and Israel made rapid progress in 2017. When Prime Minister Netanyahu visited China in March of that year, the two nations announced the establishment of a comprehensive and innovative partnership and signed a series of agreements in the fields of aviation, technology, education, medical care and environmental protection. The two nations have a smooth communication, and have built two platforms for exchange and cooperation: one is the China-Israel Joint Commission on Innovation and Cooperation,the other is Inter-governmental Economic and Technical Cooperation Mechanism. In the economic and trade domains, the two nations have complementary strengths. Israel is one of China's major economic and trade partners in the Middle East. China is Israel's largest trading partner in Asia and the third largest in the world. The two nations enjoy close people-to-people and cultural exchanges. A series of celebrations were held in 2017 to mark the 25th anniversary of the establishment of diplomatic ties between China and Israel. On November 26, the Chinese Cultural Centre in Tel Aviv, Israel was inaugurated. So far, Israel Airlines has established Tel Aviv-Beijing, Tel Aviv-Hong Kong round-trip passenger routes; Air China has a code-sharing cooperation with Israel Airlines; Hainan Airlines has opened the Beijing-Tel Aviv route in 2016; in March 2017, Cathay Pacific opened the Hong Kong - Tel Aviv route. However, the influence of three factors is more obvious in bilateral exchange. First, the American factor has limited deeper military cooperation between China and Israel. Second, the Palestinian factor has a great impact on the relations between China and Israel. Israel has decided to bring in 20,000 Chinese construction workers, which might easily cause political disputes and affect China-Pakistan relations during construction. Third, the Arabian factor makes China-Israel cooperation more limited to economic, trade, and technological innovation.

 

The cooperation between China and Egypt has also progressed smoothly, and the scores on the Five Connectivity have increased compared with 2016. The biggest highlight was President Seth's visit to China in September 2017, which was the fourth visit to China since he was elected president in 2014, and highlighted the close bilateral relations. In addition to economic, technology and transportation cooperation, both sides emphasized a desire to strengthen cooperation in counter-terrorism and law enforcement,and signed several relevant documents. People-to-people ties between China and Egypt have been further strengthened. In January 2017, the China-Egyptian Cultural Year closed, during which the two nations implemented 100 projects, including 56 in Egypt and 44 in China. With the deepening of mutual understanding, Egypt has become the favorite African country for Chinese tourists. In the first half of 2017, there were about 159,000 Chinese citizens visiting Egypt, an increase of 113 percent year-on-year. China has become the fourth largest tourist source country to Egypt.

 

III. The 3 nations at the level of potential for cooperation and the 3 nations at the level of weak cooperation

 

Jordan scored the highest among the remaining six nations, reaching 48.05, close to the ceiling of the level of nations of potential for cooperation, which is in line with the actual situation. The political exchanges between China and Jordan have been close. King Abdullah II has visited China eight times since he ascended the throne. In 2015, the relations between China and Jordan were upgraded to a strategic partnership. In 2017, Vice Premier Liu Yandong, Foreign Minister Wang Yi, and Vice Chairman of the Standing Committee of the National People's Congress Qiangba Puncog visited Jordan successively. China is Jordan’s largest source of imports and second largest trading partner. The two nations have a strong willingness to promote jointly the Belt and Road Initiative. In 2017, the Atalat oil shale power station project, worth USD1.6 billion, was officially launched, of which China was the investor, financier and builder. China Dragon City, which consists of more than 200 shops and covers an area of ​​over 20,000 square meters, was opened in Amman, Jordan in September of that year. However, Jordan's economy is vulnerable, with a weak economic foundation and poor resources. Its agricultural results depend on the weather, and its industry is over-dependent on foreign aid. In addition, Jordan is affected by the chaos of neighboring Syria and Palestine, and faces a serious refugee problem. Under internal and external pressure, its political and economic situation is too fragile and limits the further deepening of China-Jordan relations.

 

Lebanon, Iraq, Syria, Yemen and Palestine score lower. The latter three nations rank respectively the fourth, third and second from the bottom in the 94 nations along the routes, which is more due to domestic factors. China has close political ties with the above five nations. In 2017, China signed a memorandum on the Belt and Road Initiative with Lebanon, received a visit from Palestinian President Abbas, firmly supported Syria in safeguarding national stability and sovereign integrity, and actively promoted reconciliation among all parties in Yemen within the UN framework. The same is true in the economic field. China has trade contacts with the above five nations, even including war-torn Syria. Iraq is China’s third largest trading partner in the Arab world. However, for a long time, years of civil strife in the five nations have seriously hindered the implementation of the Belt and Road Initiative. The 18 factions in Lebanon have been feuding for power, which has delayed the presidential elections for 45 consecutive times since 2014. After the election of the new president at the end of 2016, Lebanon was involved in the disputes between Saudi Arabia and Iran, and its Prime Minister at once announced his resignation. Although Iraq and Syria finally won the war on terror, they were ravaged by the extremist group Islamic State. The incessant fighting in Syria has not yet subsided. Airstrikes by Saudi Arabia and other coalition forces in Yemen have divided the country, plunged countless people into an abyss of misery, and led to a serious humanitarian crisis. More than half of the country's population -- about 14 million -- was at risk of famine. Bloody clashes continued between Palestinians and Israelis, due to the American pro-Israel policy after President Trump took office. The economy in the Gaza Strip and West Bank continued to deteriorate. Obviously, under such circumstances, it is unrealistic for China to further promote the Belt and Road Initiative in these nations.

 

IV. Retrospect and Prospect

 

China and West Asian and North African nations have launched the Belt and the Road cooperation for a long time. In June 2014, President Xi Jinping delivered an important speech at the opening ceremony of the Sixth Ministerial Conference of China-Arab States Cooperation Forum, laying out a “1+2+3” cooperation pattern (to take energy cooperation as the core, infrastructure construction and trade and investment facilitation as the two wings, and three high and new tech fields of nuclear energy, space satellite and new energy as the three breakthroughs), which was highly appreciated by the Arab States. So far, China has signed the cooperation documents on jointly building the Belt and Road with nine Arab nations, and the cooperation documents on industrial capacity with five Arab nations. Bilateral cooperation had made rapid progress in infrastructure, finance, energy, science and technology, humanities and other fields. The cooperation between China and the three non-Arab nations of Israel, Iran and Turkey, has also achieved gratifying results in the Belt and Road cooperation.

 

However, compared with other regions, some inherent problems in West Asia and North Africa have hindered the further deepening and implementation of the Belt and Road Initiative. Firstly, wars broke out frequently. Parts of some nations were still dominated by warlords or tribal militants. Nations in the region and external powers interfered and waged proxy wars. Many central governments were collapsed or weakened, which had no solution or capability for recovering economic development. Secondly, terrorist activities remained rampant. The Islamic State was militarily defeated. However, large numbers of battle-hardened jihadis returned to their home countries, then launched "lone wolf" attacks, or formed new branches of terrorism, which posed severe threats to the security of regional nations. Thirdly, society was in a turbulent situation. Some regional nations had to start a painful economic transformation after suffering the "Arab Spring" shock, but the prospects for reform would be unpredictable. Some other nations were plagued by an undercurrent of social strife, and uncertainty of political stability. Fourthly, external intervention, sectarian and ethnic conflicts were highly complex. Not only the Arab nations, but the GCC was divided seriously, so that China had to be cautious when cooperating with different nations.

 

The West Asian and North African nations are China’s natural partners in the construction of the Belt and Road, due to historical and humanistic factors as well as geographical and realistic considerations. Although the continuing instability in this region led to the relatively lower scores on the Five Connectivity Indexes, but as President Xi Jinping has stressed, the people in West Asia and North Africa generally seeing that expecting stability, seeking peace, enforcing reform and promoting development is the irresistible trend. In the future, the Belt and Road Initiative will be very promising in West Asia and North Africa.

 

Notes:

[1]Liao Baizhi ,male, PhD,the deputy director and research fellow for the Middle East Institute of CICIR (China Institutes of Contemporary International Relations) .

 

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