Over the past decade, since Xi Jinping became the General-Secretary of the ruling Chinese Communist Party (CCP) in 2012, he has accelerated China’s return to political prominence. In turn, China’s ambitious global programme of economic, diplomatic and political expansion has pushed the world back towards a state of multipolarity. As well as developing China’s domestic military and economic capabilities, Beijing’s state-led efforts to ensure it leads the field in the strategic technologies used by modern economies such as renewable energy or artificial intelligence have served it as a soft-power multiplier abroad.
In many regions, this has eroded several decades of unquestioned US pre-eminence following the fall of the Berlin Wall, including the Middle East, whose abundance of fossil fuels made it a particular focus of American foreign policy concern for many decades. In the 21st century, as the world shifts away from hydrocarbons and towards renewable energy generation and clean mass transportation,China’s deepening domestic commitment to electric vehicles and the infrastructure needed to power them (like charging stations) is adding to its attraction as an economic and political alternative, even to Arab governments traditionally aligned with America.
Enter the EV Dragon?
With strong government backing since 2015, China’s electric car industry has emerged in recent years as a serious competitor to pioneers of the sector like US firm Tesla, with plug-in cars’ share of the Chinese car market estimated to hit 40% by end-2024. Chinese auto manufacturers have a commercial incentive to expand into the Middle East even without official encouragement from the CCP. The domestic Chinese market for electric vehicles (EVs) is extremely competitive, with Chinese EV manufacturers looking to expand overseas in a bid to increase their profitability as a consequence.
Chinese EV exports to the European Union and the US are increasing, albeit from a low base; but the growing trade and technology war between Washington and Beijing which began under former President Donald Trump in 2018 continues under President Joe Biden, who has chosen to maintain Trump-era tariffs on China for example. Growing Western unease about China means Chinese EV manufacturers worry about measures to limit their exports in both markets, incentivising them to look to regions like the Middle East, where there is less political resistance to Chinese commercial expansion.
Like the rest of the world, the Middle East is suffering from the impact of manmade climate change and seeking to move away from fossil fuels for power and transport. Arab autocracies like the Gulf Cooperation Council (GCC) bloc are attracted to Beijing’s reputation as a modernising non-democracy which is able to complete large-scale infrastructure projects, shown by years of global infrastructure development under its strategy known as the Belt and Road Initiative.
China also offers Middle Eastern countries a state-led model to emulate should they consider partnering with Chinese firms in their own nascent future EV industries, especially among early prioritizers of green transport like the United Arab Emirates and Saudi Arabia. Government-to-government connections between Middle Eastern regimes and China’s CCP are also increasing, helped by the need of many GCC countries to diversify their economies beyond hydrocarbon exports. Moreover, unlike with the US, Arab governments face little domestic backlash for deepening their ties with China, which is popular in the region, especially among Arab youth, 80% of whom consider Beijing to be an ally of their country according to a regional survey held earlier this year.
This diplomatic popularity suggests that Chinese products will benefit from a kind of soft power which will boost Chinese EV firms’ confidence that they will be able to enter the region with little political or commercial controversy. Some practical obstacles still remain. For example, the Gulf Cooperation Council (GCC) bloc of Arab countries requires vehicles to pass a tough certification process to ensure they can operate in GCC countries’ harsh desert climates, and concerns have been raised about untested Chinese EV imports which are not covered by warranties there.
The quickest Chinese EV brand to establish a commercial footprint in the GCC is BYD, run by Wang Chuanfu, which hopes to begin selling both EVs and plug-in hybrid cars in the UAE by the end of 2023. Despite recent cutbacks, the company remains backed by Warren Buffet, and is experiencing solid sales of its diverse portfolio.
In the UAE, BYD appears focused on launching the ATTO 3 (the first EV model BYD developed for the international market and which it claims has passed GCC climate stress tests) first, followed by the Han EV sedan in October this year. BYD and other Chinese brands may soon face competition in the GCC car market from indigenous GCC brands like Saudi Arabia’s Ceer, but will have the advantage of their previous experience developing the market in China.
Outside the GCC, China’s backing for renewable energy projects which boost Middle Eastern countries’ energy independence — such as Beijing’s longstanding state-backed investments in solar and wind power in resource-poor Jordan — could help Chinese power and construction companies future work electrifying non-Gulf Middle Eastern countries’ roads and public transport systems too, as the shift to EVs takes off there. For example, work on renewable energy projects in Jordan in earlier years may have helped Chinese officials and executives establish the relationships that have already enabled early sales of EVs to begin there. BYD has received approval to launch four models there; in addition to the ATTO 3 and the Han sedan, these include the Dolphin compact car and the Tang sport-utility vehicle. An incentive to quickly approve more EV models, more quickly for Jordan, is that it is dependent on petrol-imports, meaning a shift to a renewable energy grid which fuels an electrified public transport system and road network would be an immense advantage to a relatively poor country.
Chinese efforts to offer green economic development to Middle Eastern states have seen them make diplomatic in-roads into the region without the deployment of widespread military power, or the entanglement of Chinese actors in the region’s many quarrels. Whether this will continue as the country’s diplomatic and commercial footprint expands in the Middle East is open to question. However, China’s efforts to take a global lead in the areas of renewable energy and electric vehicles in the previous decade appear to be advancing its bilateral relations in the Middle East in the 2020s. It has not yet displaced the US as the dominant global power in the region, but Washington would be wise to take note of how Beijing’s investments in these areas have paid off in terms of soft power there.