This article first appeared in Forum, The Edge Malaysia Weekly on December 4, 2023 - December 10, 2023

China has long prided itself on its economic growth from 1979 onwards as a “peaceful development”, although the original designation of “rise” has been changed to “development”. Whether it is one or the other, China’s ability to engage in what the late Deng Xiao Ping, the paramount leader of China, once called the “four modernisations”, has been nothing but astounding.

On the economic, social, political, military and cultural fronts, despite the strenuous efforts conducted over more than four decades, invariably not to shock any great powers into believing that China is a massive threat, it is nevertheless a fact that China’s economic growth has been a plus to the global economic trajectory.

First and foremost, it has lifted 800 million people out of the poverty trap in China by 2023, with another 600 million Chinese in the pipeline. The goal is to redeem all of them by 2047, after which the government will pronounce in 2048 that it has successfully abolished all absolute poverty, thereby rendering China a developed country by 2050.

While both the 2047 and 2048 initiatives are ambitious in scale, one might notice that the focus is totally domestic. In other words, while China is open to globalisation, its national consolidation is totally local. By this token, any appetite for foreign policy adventures in the Middle East and Persia (Iran) are bound to be cautious, if not altogether reluctant, given the reputation of this region as a powder keg.

Second, irrespective of Israel’s assertion that it will have an “indefinite security presence in Gaza in any post-war arrangement”, the fact of the matter is that any occupation would undermine the reputation of the US and Israel in the Middle East and Persia. In this vein, despite China’s economic heft, how would it make sense to wade into the conflict of a tiny strip of land such as Gaza?

China’s immediate focus is on the Gulf Cooperation Council (GCC), which is on the other side of the Middle East that borders Persia via the Strait of Hormuz. If China is keen on the Mediterranean, Beijing’s sound relationship with Saudi Arabia has only just begun with any intensity. After seven weeks, the situation in Gaza remains explosive. The casualties from people afflicted by diseases due to a lack of access to medical facilities could be more than the 14,000 casualties who have been bombed according to the United Nations on Nov 29. China can provide medical relief and humanitarian assistance. But to play a larger role in peacemaking in the Middle East, the responsibility seems too big for China.

Turkiye and Greece, especially the Port of Piraeus in Greece, has been one of the fastest growing ports in the world. China invested massively in the latter almost a decade ago. Thus, while China would not be able to resist the allure of trying to solve one of the most tragic conflicts of all time near the Mediterranean, going head-first into Gaza puts its interests in the Mediterranean at risk.

But the foreign policy decision-making of China is driven by the strategic culture of realism. Not idealism or any form of Chinese exceptionalism to promote Chinese ideas such as the Xi Jin Ping Thought abroad. Once again, China can propose two-state solutions in Palestine and Israel, but not more.

Third, having played what China deems to be a key role in the rapprochement of Saudi Arabia and Iran in March 2023 — despite a hiatus of eight years between the two countries — China would reckon that it has done enough.

The key now is to reap the benefits of this one foray. Any platitudes to solving the Israel and Palestine issue, to resolve their animosity, are not worth the paper they are written on. Any pietistic statements from China are bound to be of no real substance and commitment. The same goes with other great powers on the UN Security Council.

What more, the very fact that China was able to reconcile Saudi Arabia and Iran is in itself an achievement. Any endeavour to go deeper would risk China’s outright entanglement in the Middle East and Persia. China has no interest in turning a plus into a minus.

Even if Saudi Arabia and Iran do accord China with more respect, Beijing would be receptive to their compliments with its national interest in mind. How to partake in the modernisation of GCC in high-tech industries and smart cities? Definitely not by being trapped in any complex humanitarian missions such as Gaza, which could extirpate China’s diplomatic energy, even.

Besides, Gaza’s conflict can draw in the likes of Hezbollah in Southern Lebanon and the Houthis in Yemen, if not Iran too. China cannot afford to give any impression that Beijing approves of the bellicose behaviour of Hamas or any country. If China would regard the convoluted mess in Gaza and Israel as a mess, Beijing does mean it. But this complex conflict is of the US’ own making.

Why would China try to untie the Gordian Knot? It won’t. This conflict bogs down the US and the European Union. China needs all its time and resources to deal with global issues. Not an issue specific to the Middle East and Persia only. More importantly, the similarity of Gaza and Israel’s claim to statehood seem quaintly parallel to China’s own disputes in the South China Sea and even with Taiwan.

To the likes of Prime Minister Benjamin Netanyahu, Israel must be preserved as a whole. This is based on the 1967 borders that Tel Aviv doubled the size of Israel in the Six Day War. Israel is indivisible, just as Taiwan is. Invariably, the likes of Netanyahu and his far right cabinet cannot allow Israel to be divided, nor can Taiwan be drawn away from China.

Coincidentally or otherwise, China and Israel separately believe in their historical rights — often going back thousands of years of history. It is to the benefit of China to let Israel and Palestine squabble with each other on these ancestral and historical lines. This would put the US in a conundrum.

Indeed, Beijing’s own claims in the South China Sea are also based on the whole corpus of historical rights (of possession), even if the latter is not recognised by international laws. But this is precisely why China has no interest in mediating a conflict dyad that would make international law too modern and less historical and ancestral.

Thus, to those who suggest that China can be a mediation partner in the Israeli and Palestinian conflict, perhaps they have misunderstood the narrow interests of China. While it is true China now has the largest number of naval frigates and destroyers in the world, the key is to deploy them in the South China Sea and the Pacific Islands atolls.

Lately, China’s less-than-stellar economic performance, both at home and abroad, has considerably dented its image. Going overseas in search of global trade is fine. But not foreign expeditions that can create more burdensome duties at sea or on the ground in Gaza.

Besides, the lacklustre economic performance of China has raised serious questions about whether its large debt overhang in the property sector — potentially running into at least US$2 trillion 

(RM9.3 trillion) — is sustainable. As ever, China will lower its foreign policy exposure in the Middle East for now — except to protect its oil supply chain.

Moreover, just as Japan has taken decades to recover from the “burst of the bubble economy” in 1989, China’s economy is skating on thin ice too.

There are signs that China is being affected with a weak gross domestic product growth of 4.5% annually, when in fact Beijing needs at least 6% of annualised growth to progressively reduce its youth unemployment of more than 25%.

If China cannot clear the bar of the higher end of the economic growth, it would be more sensible for the country to focus its diplomatic efforts on the South China Sea and potentially the Korean Peninsula, especially the latter where North and South Korea are technically still at war since the armistice of 1953.

More importantly, China’s Belt and Road Initiative (BRI) has appeared to sour considerably. Its debt exposure in economic aid to various countries has made China unable to recover close to US$1 trillion of its economic aid and loans to the Global South, according to the research of the College of William and Mary in the US. Such dismal pictures have also been brought into the sharpest relief by the Rhodium Group in Germany, if not the World Bank too.

Indeed, while the research of Professor Debbie Brautiger at Johns Hopkins University in Washington DC can attest to the fallacy of the Chinese “debt trap” — a point shared by her co-researcher Professor Meg Ritye at Harvard Business School — neither of them has explained that China’s BRI projects are not in distress. The duo mainly affirm that “debt trap” is empirically wrong.

China’s debts are, in the main, its own liabilities due to its aggressive lending.

Some scholars put the figure of debt defaults at 30%. These are the projects where the BRI projects have failed. While other academics put it at the level of 60% of the BRI projects that have been started but are still producing no major yields. In the main, this miscalculation was aggravated by the severe economic distress of the world due to the inability of many prior borrowers to recover from the post-pandemic rebound. All these numbers point to a China that will be more conservative and homebound in its foreign and commercial diplomacy.

Besides, as nefarious as this may sound, the stronger the likelihood that the Biden administration can be ensnared in yet another war in the Middle East, the more with which the US and its allies would have to spend their blood and treasures of the US on Israel.

The US’ entangling alliance with Israel would lead Washington to what Professor Paul Kennedy at Yale University once called the “imperial overreach”. The US is completely stretched on Gaza and Ukraine.

Such a dire situation that confronts the US and Israel in the Middle East, if not Persia, could only be considered a boon, not a bane, to China. In all likelihood, China would prefer to see a meltdown of the regional neighbourhood of the Gaza Strip and the Levant — in turn, Syria and Lebanon — all of which are now the world’s most war-torn economic corridors.

This dejected state of affairs would wear the US and Israel down, rather than see them flourish and be able to reconstruct the maritime areas and geography here in and around the Middle East and the Mediterranean.

After all, China has already secured at least one military base in Djibouti to protect its supply line and vessels from any piratical raids near the Gulf of Aden. China has a good relationship with Oman too.

Any unnecessary involvement in Gaza that can become more dangerous to China’s geopolitical and geoeconomic profile would not be easily approved in Beijing.

Dr Phar Kim Beng is senior adviser to the Bluebridge Education Group at the University of Cambridge, England, and CEO of Strategic Pan Indo Pacific Arena, Malaysia and London. He was previously director of the Political and Security Community at the Asean Secretariat.

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