U.S. Policy In The Middle East Is Getting Tough Again — And The Reason Is China

-Analysis-

CAIRO — Islamic history tells us that Al-Muizz, the first Fatimid caliph in Egypt, had been asked to prove that he really was one of the descendants of Prophet Muhammad. He picked a handful of gold from a box on his side, and said: “This is my pedegree.” And he gripped his sword with his other hand and said: “and this my ancestor.”

It’s a scene without any sort of verification, but it has been popular since 970 AD largely because of its theatrical nature. The saying “Al-Muizz’s sword and gold” has become a synonym for political regimes that resort to “stick and carrot” policies.

No regime is able to remain in power through repression alone. It has to offer its people some benefits, and link it to their power, so that repression becomes the exception and not the rule.

But in the 21st century, the United States appears to have gradually, but decisively, abandoned the Al-Muizz style in managing power in the Middle East. It gradually traded in the carrot, and has been resorting to the stick more.

This shift is not limited to the American presence in the Middle East alone, but rather a general trend for the United States. It’s linked to the decline of U.S. weight in global trade and investment, and it impacts its ties with the entire world: Africa, Latin America and Southeast Asia.

Base of U.S. deployment

More than any other region, the Middle East has extremely dense American military deployment. We see such deployment not only in the military bases scattered in the Gulf, Iraq, Syria and Djibouti, but also in the influx of aircraft carriers and strategic bombers which have played an active role in participating in bombing operations in Yemen, Syria and Iraq, and providing direct support for Israeli offensive and defensive operations in Gaza, Lebanon, Syria and Iran.

It’s not some strategic plan prepared by successive American administrations.

However, this increasing military deployment was not part of some strategic plan prepared and sought to be implemented by successive American administrations.

While the great failure of the Iraq war gave the Obama administration (2009-2017) an impetus to withdraw from the region, a withdrawal that continued with Donald Trump (2017-2021), the developments that followed 2011 promoted another US deployment to the Middle East to defend its interests.

This U.S. return began with the formation of the international coalition to confront ISIS, followed by the return of American forces to Iraq, and the increase of their presence in Qatar and Bahrain, then the establishment of U.S. bases in northern Syria.

Then came the al-Aqsa Flood (Hamas’ attack on October 7), which exposed Israel to the Palestinian resistance and the force of Iran-backed parties. This prompted Washington to increase its deployment to levels that had not been seen since its 2003 Iraq invasion.

​China’s economic muscle

In contrast to the increasing American military presence over the past decade, its economic role in the Middle East has declined relatively, whether as a trading partner, a source of direct investment, or even as a donor, particularly when compared to the rising interests of China.

China imports more than half of the Gulf’s oil exports

In 2022, for example, China was the Middle East’s first trading partner in terms of exports and imports. It now imports more than half of the Gulf’s oil exports, and supplies the region’s countries with about 67% of what they import.

Meanwhile, the United States ranks far behind India and a number of European countries, in terms of exports and imports, especially with its expansion in oil production, the most prominent thing the Middle East can offer to the world.

The U.S. foreign trade decline has not been limited to the Middle East, but has extended to many regions around the world with the rise of China over the past three decades.

In South America, the historical backyard of the United States, China’s share of total foreign trade with the continent reached about 25% in 2021, compared to 15% for the United States.

In Africa, China has been the continent’s first trading partner since 2014, after surpassing the United States and old colonial powers such as France and Britain. The same applies to the ASEAN group in Southeast Asia, which includes some of the world’s fastest-growing economies such as Thailand, Vietnam, Indonesia, Singapore and Malaysia.

The chronic deficit

China was the first trading partner outside the ASEAN group of Southeast Asia, with about 20% of ASEAN’s total exports and 31% of its imports, compared to 19% and 9% for the United States, respectively.

China’s rise is consistent with the rise of Southeast Asia as the world’s largest exporting power after China. The group has 10% of total exports in 2022, compared to 9% for the United States, although the United States retains the lead as the world’s largest importer with 13.2%, followed by China with about 10.6%.

Here lies the terrible and chronic deficit in the U.S. trade balance.

Stick or carrot?

The United States has also become not as attractive a source of direct investment as it used to be. China estimated its cumulative investments in the region at 3 billion in 2022, while cumulative U.S. investments reached billion in 2023.

The decline has affected the United States as a donor of economic aid. The percentage of foreign aid to US GDP declining steadily since the end of World War II: it was 5% in 1945, it is just 0.18% in 2024.

The decline in U.S. aid is reflected in the Middle East, meaning that countries in the region, which are historically the world’s largest recipients, have less opportunity to receive grants.

But while a report to Congress in 2023 shows that the Middle East and North Africa countries have historically been the largest recipients of U.S. foreign aid with a total of 2.6 billion between 1946 and 2020, the largest part of this aid was directed to support the Israeli military. This places such aid in the category of stick rather than carrot.

This does not mean the American empire is in decline.

Today, Ukraine and Israel are the two largest recipients of U.S. support in 2023-2024.

The changes that have affected the weight and role of the United States in the global economy, including the Middle East, do not mean that the American empire is in decline.

The U.S. still maintains its lead in two basic issues: money, with the centrality of the dollar as an international currency on which China itself relies heavily in its trade and investments, and the production of advanced technology, including that for military usage.

This makes the U.S. likely to continue to play a pivotal role in the global economy in the coming years.

But at the same time, if we return to the metaphor with which we began the article, the American stick has become bigger while the carrot is shrinking. And the developments in the Middle East reveal changes that indicate that the United States will use its Navy fleets, Air Force fighter jets, and endless supply of weaponry to address the challenges the world poses to it.