Christopher Davidson - After the Sheikhs - The Coming Collapse of the Gulf Monarchies

Similarly to Aramco, SABIC has already helped to initiate three petrochemicals projects in China as part of its ‘China Plan’, which aims to facilitate mutual investments between the two countries by supporting China’s economic development and, as its premier supplier of petrochemicals, helping to satisfy its ever-increasing demand. [442] 134. Yetiv, Steve A. and Lu, Chunlong, ‘China, Global Energy, and the Middle East’ in Middle East Journal , Vol. 61, No. 2, 2007, pp. 207–208. And in 2009 SABIC entered into an agreement to build a fourth petrochemical complex, costing $3 billion, in China’s northeastern Tianjin province. [443] 135. The National , 2 December 2009. The Qatari Investment Authority is also becoming active in China, and has recently followed Kuwait’s lead by signalling its intent to purchase $200 million worth of shares in subsequent public offerings from the Industrial and Commercial Bank of China. [444] 136. Ghafour, p. 87. It has also opened a permanent office in China with the intention of pursuing further sovereign wealth investment opportunities in the country, with QIA’s CEO having explained that ‘China and Asia are growth markets for Qatar — we are really serious about finding the right opportunities there’. [445] 137. Financial Times , 2 November 2009. Most significantly perhaps, it was announced that Qatar Petroleum would enter into a joint venture with Petrochina worth $12 billion. This deal, if followed through, would eclipse even Kuwait’s investments in China and would lead to the construction of a new petrochemicals plant in China’s eastern Zhejiang province, along with an oil refinery, an ethylene plant, and a port for oil supertankers. [446] 138. Gulf Times , 6 August 2009.

Much like its neighbours, the UAE, and more specifically Dubai, is also investing in China, and has been since the late 1980s following the establishment of the Dubai Oriental Finance Company. [447] 139. Ehteshami, Anoushivaran, ‘The Rise and Convergence of the “Middle” in the World Economy: The Case of the NICs and the Gulf States’ in Davies, Charles E. (ed.), Global Interests in the Arab Gulf (Exeter: University of Exeter Press, 1992), p. 151. More recently Dubai Ports World has made significant investments in Chinese coastal cities, and now operates seven container terminals in the country, three of them in Hong Kong. Crucially DPW has faced none of the opposition it experienced in its 2006 bid to operate ports in the US, and its success has been attributed to its well developed partnership with China’s Tianjin Port Group Company. [448] 140. Calabrese (2009), p. 4. In the near future the joint venture will also open a terminal in China’s northeastern Qingdao province and in 2009 it announced that it would also take an 80 per cent stake in a joint venture with both a Chinese company and Vietnam’s state-owned Tan Thuan Industrial Promotion Company in order to build yet another Asian container port outside Ho Chi Minh City. [449] 141. The National , 21 July 2009. Referring to the Saigon Premier Container Terminal. Abu Dhabi has thus far been more cautious than Dubai with regard to investing in China, but there are nonetheless some proxy examples: IPIC has a 65 per cent controlling stake in Borealis [450] 142. The National , 5 August 2008. —a plastics company based in Austria that has links with the Abu Dhabi Polymers Company — and in turn Borealis is investing in a polypropylene plant in China, to help boost the supply of plastics for its booming automobile industry, [451] 143. Calabrese (2009), p. 5. which now comprises more than forty-five car manufacturers, including Beijing Automobile Works and Chery Automobile. [452] 144. Davidson (2010), chapter 5.

With regards to building non-economic soft power ties, a part of the strategy seems to have been regular and high level diplomatic visits from the Gulf monarchies to Pacific Asia. While economic and trade matters are certainly discussed at these carefully staged events, the meetings are nonetheless also valuable opportunities for rulers and their ministers to convene with their Pacific Asian counterparts and consider a range of other matters. Often substantial gifts or interest free loans are granted during these meetings — especially to China, in an effort to build more sturdy political and cultural understandings, and undoubtedly to generate further goodwill. The frequency of these visits has greatly intensified, but more important has been the increasing seniority of the visitors, which now eclipses that of those dispatched to Western capitals. [453] 145. Ibid., chapter 7. A report published by the US-based Middle East Institute in 2009 also identified the trend, stating that there has been a ‘steady, incremental process in the building of personal and institutional relations — the essential latticework of Gulf-Asia economic interdependence… [and the diplomatic visits] have been capped by a slew of ambitious cooperation programs and joint ventures’. [454] 146. Calabrese (2009), p. 2.

In 2006 the Saudi king visited China to sign several new agreements that were intended to ‘write a new chapter of friendly cooperation with China in the twenty-first century’. As a gesture of goodwill he also agreed to grant China a substantial loan in order to build infrastructure in the oil rich Xingjiang province. [455] 147. Ghafour (2009), pp. 87–88. This was his first international trip as the newly-installed king — before visiting any western states — and the Chinese president declared that the visit ‘would begin a new phase in partnership between the two countries in the new century’. [456] 148. Yetiv and Lu (2007), p. 205. Following the Abu Dhabi ruler’s visit to China in 1990 the UAE has made many large donations to China, including grants to establish an Arabic and Islamic Studies Centre at Beijing Foreign Studies University and the financing of the expansion of a printing factory for the China Islam Association. Subsequent visits also led to China being granted permission to set up UAE branches of the Xinhua News Agency and the People’s Daily newspaper. [457] 149. Chinese Ministry for Foreign Affairs. Overview file on the UAE 2009. And soon the UAE’s Zayed University will establish a Confucius Institute as a result of an ‘imaginative new partnership’ that is being developed with China’s Xinjiang University. [458] 150. Sourced from Zayed University’s ‘Destined to Lead’ brochure, 2009. Meanwhile, Kuwait has been one of the most generous suppliers of low interest loans to China, with the Kuwait Fund for Arab Economic Development having provided China with over $600 million in such loans since the 1990s. [459] 151. Bin Huwaidin (2002), pp. 200–201. There have also been several large gifts, including a disaster relief package in 1998 following serious flooding in China. [460] 152. Ghafour (2002), pp. 87, 89. Chinese Ministry for Foreign Affairs. Overview file on Kuwait 2009. The poorer Gulf monarchies have been less active in providing gifts and development assistance to China. Nevertheless, in 2001 Oman’s ruler donated $200,000 to assist the Guangzhou Museum of Overseas History build a new Arab and Islamic exhibition room. [461] 153. Chinese Ministry for Foreign Affairs. Overview files on Qatar and Oman 2009.

Despite the Gulf monarchies’ internal and external survival strategies, many of which have contributed to their relative stability over the past few decades, there are nonetheless several weaknesses and pathologies that have been undermining their polities. These have often been under-reported or ignored, given the various rulers’ ability to continue buying acquiescence from their people and cultivating legitimacy. Moreover, they have often been subtle problems, and have rarely led to violent protests or headline-grabbing incidents. But given that most of these weaknesses are deep-rooted, structural, and seemingly unsolvable, it can be argued that they cut to the very core of the Gulf monarchies’ political and economic structures, often exposing the vulnerability and unsustainable nature of the current practices. As the later parts of this book demonstrate, the Gulf monarchies are not immune to the Arab Spring, which is undoubtedly serving as a catalyst for reform and revolution in the region, but it is perhaps these domestic, Gulf-specific problems which are most central to understanding the monarchies’ looming challenges.