Since 2003, China has pursued a two-pronged Iraq policy of promoting Chinese interests while avoiding antagonizing the Untied States. On the one hand, this policy addresses concerns about oil and construction contracts and the desire to use the Iraq crisis to increase Chinese political influence in the Middle East. On the other, China has carefully avoided confrontation with the United States. This reflects pragmatic considerations of both China’s regional and global interests. Although China has so far been able to walk a fine line between pursuing its own interests and preserving a stable relationship with the U.S., such a balancing act may be hard to maintain.
Eyeing Oil and Reconstruction Contracts
China opposed American intervention in Iraq in 2003 partly because of its substantial economic interests there under Saddam Hussein’s regime. During the years before the war, Beijing actively pursued oil and construction contracts with Iraq under the UN Oil-for-Food program. From China’s perspective, a war in Iraq would substantially hurt Chinese interests since it would result in the loss of Iraqi contracts valued at over one billion U.S. dollars, which in turn would disrupt its oil supply and increase oil prices. To prepare for the disruption, China increased its purchases of oil in January 2003 by over two-thirds in comparison with the previous year, an important factor in China’s trade deficit in January 2003.
The American decision to invade also raised concerns among Chinese leaders and analysts that the strong influence of the United States in the Middle East would hinder China’s effort to access economic resources in the region. China’s repeated call for the return of sovereignty to the Iraqis reflects a deep anxiety concerning U.S. domination of Iraq’s economic resources.
China, like other prominent opponents of the war, jumped on the bandwagon of reconstruction after the war. Beijing’s pledge of $25 million and an agreement to forgive a large part of Iraq’s multi-billion dollar debt made China a significant donor to the country, but this generosity is not motivated by sheer goodwill. Chinese Deputy Foreign Minister Shen Guofang explicitly stated that China hoped to forgive some debt owed by Hussein’s regime in order to gain access to the bidding processes on big oil and infrastructure projects. 
Desire to do business in Iraq has contributed to intensified efforts towards improving relations with the new Iraqi authority. The Chinese embassy in Baghdad reopened less than two weeks after the transfer of authority to the Iraqi interim government in June 2004. China offered material assistance for the January election, provided fellowships for Iraqi students to study in China, and is helping to train a small number of Iraqi technicians, management personnel, and diplomats. For example on April 1, 2005, 21 Iraqi diplomats were funded by the Chinese government to start their month long training program at China Foreign Affairs University. In conversations with visiting leaders of the Iraqi Interim government, Chinese leaders are open about their wish to gain reconstruction contracts. Chinese diplomats in Baghdad charged with reestablishing the Chinese embassy indicated that assisting Chinese companies to gain reconstruction contracts was one of their main goals. 
Promoting Chinese Political Influence in the Middle East
Aside from economic interests, China had strategic interests as well for not supporting an American invasion of Iraq. Interest in the region’s resources has led China to seek greater visibility in the Middle East in recent years. To signal its intention to become more active in regional affairs, China appointed its first Middle East peace envoy in September 2002. Given its limited means, China’s new activism in the Middle East is characterized by a reliance on multilateral mechanisms such as the United Nations. The war in Iraq gave China an opportunity to exploit its status as a permanent member of the UN Security Council to promote its influence in the region.
In contrast to its usual inactivity in the United Nations on Middle Eastern affairs, since the beginning of the Iraq crisis, China has engaged in a flurry of activity. In early 2003, the Chinese Foreign Minister Tang Jiaxuan flew to UN headquarters in New York four times to lobby for a political solution to the Iraq problem. Most significantly, on May 26, 2004, China submitted to the Security Council an “unofficial document,” offering Chinese views on how to revise a draft resolution proposed by the U.S. and the UK. This marked an unprecedented move by Beijing to seek a more visible role on Middle Eastern affairs. In this document, China proposed that the U.S.-led multinational force withdraw from Iraq in January 2005. Even though Resolution 1546 did not adopt this suggestion, Beijing believes that its document contributed to the resolution’s terms about full Iraqi sovereignty over its resources and security matters.  Moreover, China has consistently called for a larger UN role in Iraq, both with regard to WMDs and reconstruction efforts. From China’s perspective, a more prominent UN role would not only limit American power in the region, but it would also give China more leverage in dealing with the new Iraqi authority.
Without deliberately antagonizing the United States, Beijing has sought to generate goodwill in the Arab world by distinguishing its policy from that of the U.S. Given Arab sensitivities regarding foreign interference, China’s rhetoric at the UN about respecting Iraqi sovereignty and giving Arab countries a larger role in Iraqi affairs is intended to please Arab audiences.
Avoiding Confrontation with the United States
Despite strong incentives to oppose the war and undermine American influence in the region, Beijing has sought to avoid confrontation with the United States over Iraq. This resulted from Beijing’s calculations of both its regional and global interests.
China’s post-Cold War hope for a favorable change in the balance-of-power situation in the Middle East was shattered as the United States gradually asserted itself as the region’s dominant power. The U.S. has constructed alliances with moderate Arab states such as Egypt and Saudi Arabia, while containing or destroying regimes in Syria, Libya, and Iraq. In addition to worrying about tighter U.S. control of Middle Eastern resources, Chinese analysts fear that the war in Iraq is one component of a grand strategy of encirclement directed at China.
Despite these concerns, China has reconciled itself with the idea of U.S. dominance in the Middle East, at least temporarily. Cooler heads in Beijing believe that China’s interests are best served by maintaining a policy of non-confrontation with the United States. Aside from the fact that conflict with the United States would undermine Chinese diplomatic efforts in the region and shut Chinese companies out of Iraq’s reconstruction, Beijing realizes that the United States is the primary force for stability in the region.
Additionally, China is concerned that other powers such as Japan and Russia are seeking to expand their influence in the Middle East. Egypt, for example, is seeking closer relations with Japan, which has more to offer economically than China. Some Egyptian analysts have suggested that Japan and Egypt support each other in their respective bids for a permanent Security Council seat. In order to compete with Japan and Russia for influence in the Middle East, Beijing needs good relations with the United States.
In a global geopolitical context, China has identified relations with the United States as its top strategic priority. More pressing diplomatic issues requiring U.S. assistance confront China, particularly in Taiwan. China also needs good relations with the US and its Western allies to accomplish goals related to China’s energy security. For example, Beijing is currently seeking to work with international organizations such as the International Energy Agency to enhance energy security. U.S. cooperation is crucial in that effort.
Because of these interests, China’s Iraq policy since 2003 has deliberately avoided antagonizing the United States. Although Beijing made its anti-war stance clear, China did not participate in the French-Russian-German joint statement issued on February 24, 2003, indicating Beijing’s desire not to let the issue damage U.S.-China relations. To Washington’s satisfaction, China also voted for the Security Council Resolution 1546 in June 2004, legitimizing the presence of the U.S.-led multinational force in Iraq. Moreover, official Chinese criticism of U.S. Iraq policy has been consistently mild, limited to skepticism regarding American ambitions to democratize Iraq and the Middle East, and the denunciation of the U.S. military action as a violation of the UN Charter and international law. Some recent Renmin Ribao articles have portrayed the current U.S. role in Iraq in a positive light, describing it as safeguarding the new Iraqi government and helping train army officers and policemen. 
China’s Iraq policy is indicative of its broader strategy in the Middle East, which seeks to promote Chinese interests without antagonizing the United States. Given China’s own economic and political interests, it could not cooperate fully with the United States on Iraq. Meanwhile, the reality of American dominance in the region forces China to keep its opposition moderate and cooperate with the U.S. on certain issues such as forgiving Iraqi debts. While Chinese analysts have commended Beijing’s Iraq policy as being successful, challenges lie ahead.
China’s own economic and political ambitions in the Middle East may lead it into direct conflict with the U.S. Potential issues that could lead to such conflict include weapons proliferation, China’s relations with “rogue” states, and competition for oil. In addition, increased conflict between the United States and other nations in the region may require China to take clearer policy stances. This may force China to choose sides in thorny diplomatic disputes, angering either the U.S. or Arab countries.
Yufeng Mao is a Ph.D. candidate at George Washington University. She is currently researching Sino-Arab relations.
1. http://www.aljazeera.net, March 1, 2004.
2. See CCTV interview with Sun Bigan, a former Ambassador, charged with the effort to reestablish Chinese embassy in Iraq (“Text of Interview Given to CCTV by Head of Group Charged with Rebuilding Chinese Embassy in Iraq,” Chinese Foreign Ministry website, February 17, 2004, http://www.fmprc.gov.cn/chn/ziliao/wzzt/zt2004/xgxw/t66614.htm)
3. Jianfang Ribao (Liberation Daily), June 10, 2004.
4. For an example, see Li Xuejiang, “Yilake zai jiannan zhong qianxing (Iraq is Moving Forward with Difficulty),” Renmin Ribao (People’s Daily), April 13, 2005.