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China increasingly looking to Iran and Kurdistan for energy security

By Christina Lin

China, a country that has the most to lose in the Middle East in the face of the Islamic State (IS), is upgrading its ties with more stable partners in the region such as Iran and Kurdistan.

On August 8, the well-respected Hong Kong-based newsmagazine Phoenix Weekly featured a cover story on what amounts to be a declaration of war against Beijing by IS with a July 4 speech by the group’s leader Abu Bakr Al-Baghdadi naming China first in a line of 20 countries to have violated Muslim rights accompanied by a map of the proposed IS caliphate that includes Xinjiang.  

While the thought of IS occupying Chinese territory currently seems far-fetched, Chinese strategists nonetheless have to worry about how IS expansion will impact China’s energy security and its own westward  march seen in the Eurasian Silk Road Economic Belt, the centerpiece of Chinese president Xi Jinping’s foreign policy.

Former Chinese ambassador to Iran Hua Liming underscored, “China definitely has a stake in this issue… the rise of ISIS now overrides other turbulence in the Middle East”, while Zhu Weilie, director of the Center for China-Arab States Cooperation Forum Studies, said the Silk Road Initiatives were an upgraded version of Chinese enterprises’ “going out” strategy (走出去略) for projects initiated back in 1993 when China first became an oil importer. 

According to Erica Downs of the Brookings Institution, Baghdad is to be the centerpiece of China’s Middle East energy strategy with China’s most productive upstream activities located in Iraq. Iraqi fields are among the world’s largest, with China’s oil giant CNPC holding substantial stakes in Al Ahdab, Rumaila, Halfaya and West Qurna 1 in the south, and Sinopec also holding stakes in an oil field in Iraqi Kurdistan.  

Beijing is also the largest oil and gas investor in Iraq, and in 2012 Fatih Birol, chief economist at the International Energy Agency, dubbed the rapidly developing ties between Beijing and Baghdad the “B&B” link. 

Saudi Arabia is currently China’s largest crude oil supplier followed by Angola and Iran, but over the past years China has been increasing its imports from Iraq. China purchased nearly 50% of Iraqi oil production in 2013 and in 2014 it planned to increase this to 70% at 850,000 barrels per day (bpd), narrowing the gap between Iraq and Saudi Arabia at 1.1 million bpd in 2013, while surpassing Iran at 530,000 bpd in the first half of 2014 alone.

However, IS now threatens China’s oil stakes in southern Iraq, therefore, Beijing is upgrading ties with Iran and Kurdistan to offset potential losses in the face of Baghdad’s instability. In September, China established a new consulate general in Erbil in the midst of their negotiations for the potential sale of 4 million barrels of oil. 

Beijing sees Kurdistan as a rock of stability in a sea of upheavals in Syria and Iraq and is forging closer ties to protect its oil interests. This follows a similar pattern of gaining a hold in South Sudan prior to Juba breaking away from Sudan in 2011.  In fact, China is increasingly militarizing its energy policy by sending a battalion of 700 combat troops overseas for the first time in order to protect its oil interests and by contributing 350 UN peacekeepers in South Sudan, bringing the total number of Chinese troops in the country to over 1,000. 

While China’s quiet support for Kurdistan may be a possible irritant in Sino-Turkey relations, Beijing is nonetheless increasingly frustrated by what it perceives as Ankara’s complicity in allowing the transit of Chinese Uyghur militants into Syria and Iraq to train with Al-Qaeda affiliates and IS.  China has suffered its worst terrorist attacks over the past 20 months, and the Communist mouthpiece Global Times has pointed the finger at Turkey for supporting Uyghur separatist organizations such as ETIM and Istanbul-based ETESA, which recruits from the Uyghur Diaspora.

Given that IS poses a threat to Xi Jinping’s grand strategy of the Silk Road Economic Belt, China’s Mideast energy interests, as well as a secure transit of energy resources through Xinjiang to the rest of China, Beijing may decide to play the Kurdistan separatism card and put pressure on Ankara to clamp down on IS and Uyghur militants’ anti-Chinese activities. Indeed, a 2006 Hurriyet Daily article on China’s Kurdish policy acknowledged the unspoken Beijing-Ankara quid pro quo of not supporting either Uyghur separatists or the PKK.[1]

Beijing is also upgrading military ties with Iran with an eye for establishing a potential naval base in the country, and in September the two conducted their first joint naval war games in the Strait of Hormuz. As China’s economy grows and its Mideast energy dependence increases, Beijing will be more proactive militarily to help maintain regional security and stability.

Given that IS threatens China’s core interests seen in Middle Eastern energy security and Xinjiang’s territorial integrity, an issue which has side effects on Sino-Turkey relations revolving around Uyghurs and Kurds, it is imperative for Beijing and Ankara to carefully manage the Uyghur/IS issue to help ensure the territorial integrity of China, Iraq and Turkey.

1. Mehmet Ali Birand, “China’s Kurdish policy is changing”, Hurriyet Daily News, 28 February 2006. http://www.hurriyetdailynews.com/default.aspx?pageid=438&n=chinas-kurdish-policy-is-changing-2006-02-28

Christina Lin is a Fellow at the German Marshall Fund’s Transatlantic Academy 

Source: JTW

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The Journal of Turkish Weekly

JTW is a respected Turkish news source in English language on international politics. Established in 2004, JTW is published by Ankara-based Turkish think tank International Strategic Research Organization (USAK).

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