The Limits of China’s Role in Syria – The Diplomat

Last week, Syrian President Bashar al-Assad was re-elected with 95% of the vote. He insisted on presenting the poll as a sign that the country is returning to normal after a decade of chaos and civil war. This is important if he wants to attract foreign investment to rebuild the country.

Certainly, since the last presidential election in 2014, Assad has regained control of much of the country and its population, as evidenced by the fact that the number of registered voters has increased from 15.8 to 18.1 million. . However, parts of the country did not participate, including the northern Kurdish Autonomous Region and the opposition-held Idlib province.

Assad’s victory was treated with skepticism in western countries, where officials shared the view of the Syrian opposition that the poll was neither free nor fair. In contrast, Assad Russian and Iranian the allies approved the result. They were followed by Belarus and China.

Chinese approval will be particularly welcome for Assad as he seeks to leverage it in some more tangible form of assistance. Previously, he played on the Sino-Syrian connection as a way of demonstrating that it is not diplomatically isolated and that it has a number of potential partners to support its reconstruction efforts.

Having access to external capital is vital for the reconstruction of Syria, as it is highly unlikely that domestic sources will be sufficient. In 2017, the World Bank calculated that the Syrian economy had reduced by $ 226 billion between the start of the uprising in 2011 and 2016, which is double the country’s total GDP. A year later, this estimate had increased further, reaching 350-400 billion dollars.

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Such figures are astronomical. They also eclipse the current and continued aid from Russia and Iran to support the Assad regime throughout the war. the the highest estimates place Russian and Iranian aid to $ 7 billion and $ 23 billion, respectively. Even if such numbers are matched in the post-war period, they will not come close to the required amount.

For this reason, China has become a more attractive proposition to some in Damascus, especially since other forms of foreign capital – including from the West – are likely to remain unavailable as long as Assad remains in government. power. Indeed, Assad has already expressed interest by joining the Chinese Belt and Road Initiative, while its officials tried to attract Chinese investment in a series of projects, including the construction of a north-south-east highway, the redevelopment of ports of Latakia and Tartus, and the construction of railways, one in the Damascus region and another that would be linked to the Lebanese port of Tripoli.

Still, it would be a mistake to assume that investments by Chinese public and private companies could offer much more than those offered by Russian or Iranian companies. Trade and investment between China and Syria has been generally modest, even before 2011. Since then, it has not increased substantially either. In 2015, Huawei expressed interest in the reconstruction of the telecommunications system of Syria and in 2017, China pledged $ 2 billion contribute to the development of infrastructure and industrial parks. These figures are in addition to $ 60 million that China provided in various forms of humanitarian aid during the war.

The limited level of Chinese investment in Syria must also be put into perspective. The bulk of Chinese commercial activity is located elsewhere in the Middle East, mainly in the Gulf – particularly in Saudi Arabia, Iran and the United Arab Emirates – and in North Africa – in Egypt and Algeria in particular. In addition, Chinese financial commitments in the region may have already reached their peak. According to American Enterprise Institute, which monitors Chinese capital globally, investment in the Middle East has declined since 2018 – the year President Xi Jinping pledged $ 23 billion in loans for the region as a whole to the Sino-Arab Cooperation Forum.

Even if Chinese investors and companies focused more on Syria, there are several other hurdles they should face that we looked at in our recent study on the subject. Several are linked to risk. The first is that even if the war is coming to an end in Syria, it does not mean the end of the conflict. Substantial parts of the country remain out of Assad’s control and foreign troops remain in Syrian territory, including Turkish and American forces. Chinese investors can be wary of lingering volatility.

Another risk is the impact that international sanctions could have. Syria is subject to a wide range of sanctions and the United States has shown its willingness to enforce them. This prompted some financial institutions to avoid getting involved in the country, including some Hong Kong banks fearful of being blacklisted Therefore.

A third challenge is that Chinese capital and companies can get caught up in games that are beyond their control. Assad has showed himself prepared to exploit all the opportunities available to him, including playing his own partners against each other. Russian and Iranian officials and companies have clashed to win the ear of the regime in order to acquire potentially lucrative contracts for themselves. Assad may well seek to do the same with Chinese companies. Not only would it cause them problems, having to navigate between Syrian, Russian and Iranian interests, but due to their hitherto limited involvement in the country, they would also have the disadvantage of knowing less about the local terrain.

In short, the material benefits of the “Chinese dream” may turn out to be less profitable than they appear. That said, we have suggested that China could serve Syrian ambitions in another way: as a potential development model. Indeed, Syria had already embarked on a path similar to that of China in 2005, when the regime embarked on a limited form of privatization and liberalization. This had echoes in China’s earlier transition to a market economy after 1978. China also attracted valuable foreign investment from the 1980s through the establishment of special economic zones focused on manufacturing. In addition, China’s first economic reforms were initiated at the national level and led by its leaders with little regard for external frameworks and conditions, such as those associated with the Washington Consensus under the IMF and the World Bank.

Of course, it’s important not to overdo the parallels. There is a substantial difference between the two countries given the state of war in Syria and China’s economic development in its absence. Yet the lessons for the regime may turn out to be as important as any reconstruction funds it could extract from China and its other international partners.

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