Saudi and Emirati Pivot to Russia and China: Shift of Axis or Extreme Hedging?

July 5, 2022

The million-dollar question is whether Saudi and Emirati alignment with Russia and China presents a real shift in their relations with the United States.
Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces Sheikh Mohammed Bin Zayed Al Nahyan (R) meets President of Russia Vladimir Putin (L) at Kremlin palace in Moscow, Russia. Photo by Kremlin Press Center via Anadolu Images

If the war in Ukraine reveals a single globally valid truth, it is the fact that today states operate under a very different political and security order than a decade ago.

The most striking example of this new international structure manifests itself in how Saudi and Emirati national interests dictated and enabled these Gulf monarchies to respond to the Russian attacks in Ukraine more cautiously and openly refusing an automatic alignment with the United States.

The Russian invasion of Ukraine has brought the broadened range of political, economic, and strategic partnerships of Saudi Arabia and the United Arab Emirates (UAE) with Russia and China to the fore, and renewed a scholarly focus on the two Gulf states’ pivot to the East.

Gulf pivot to Asia: The shift is real

It is hardly surprising that economic cooperation has been the linchpin of the Gulf Cooperation Council’s (GCC) pivot to China, and to a much lesser extend to Russia, given the interdependent structures of their economies.

Over the last years, the economic relations of the GCC states with Russia and China are blooming at an unprecedented pace. In 2020, China replaced the European Union as the GCC’s top trading partner, as the bilateral trade volume reached $161.4 billion.

Saudi Arabia and the UAE are China’s most important economic partners in the Gulf region. According to Saudi custom data, Saudi Arabia was China’s top supplier of crude oil and held 17 percent of the Chinese market. In 2021, China was Saudi Arabia’s main trade partner, both in terms of exports (17.3 percent) and imports (20.7 percent).

Similarly, China is the top trade partner of the UAE as the bilateral trade volume exceeded $49 billion in the first nine months of 2021, showing a 38.1 percent increase compared to the same period in 2020. Furthermore, the UAE is a key destination for re-exports of Chinese goods into the Middle East and Africa.

China has substantially increased its investments in the Gulf region and as of 2021, Chinese investments reached $43.47 billion in Saudi Arabia and $36.16 in the UAE. The two Gulf countries also form an important pillar of China’s Belt and Road Initiative (BRI), and the UAE and Saudi Arabia ranked the second and third largest recipients of China’s construction investments under the BRI respectively.

More modestly compared to China, Saudi and Emirati economic relations with Russia show an upward trend. The latest figures from 2020 show that Russia-Saudi Arabia bilateral trade volume stood around $1.8 billion, more than 60 percent up compared to 2018 figures. Russian-Emirati bilateral trade looks even more robust as the trade volume between the two reached circa $4 billion in 2021. Russia also become an important destination for Gulf investment.

As of 2018, the share of Saudi Arabia’s and the UAE’s investments in the Russian Direct Investment Fund’s (RDIF) projects stood at 22 percent and 18 percent respectively. Reportedly, as of 2022, Abu Dhabi’s Mubadala Investment Company’s investments in Russia reached $3 billion. Amid the latest developments in Ukraine, many Russians see Gulf countries, particularly the UAE, as a safe haven for their investments to thwart Western sanctions. In the first quarter of 2022, Russian investments in the Dubai real estate market surged as Russia climbed to fifth place in the country, two places higher than in the previous year.

Yet, beyond economic ties, a broader partnership between the aforementioned GCC states and China and Russia is emerging. The increased diplomatic activities and steps towards strategic partnership are one way to observe the trend.

On January 10, in an unprecedented move, foreign ministers from Bahrain, Saudi Arabia, Kuwait, and Oman, and the secretary general of the GCC paid a visit to China to deepen bilateral partnerships. Chinese Foreign Minister Wang Yi met with Gulf GCC Secretary General Nayef Falah Mubarak Al-Hajraf during the visit.

Both sides agreed that conditions are ripe for the establishment of a China-GCC strategic partnership and both sides will speed up the process so as to push bilateral relations to a new level,” the Chinese Ministry of Foreign Affairs said in a statement. The visit is expected to give impetus to China-GCC Free Trade Agreement (FTA) negotiations, which were launched in 2004. Although absent from the visit, the UAE expressed its support for the FTA and reiterated Abu Dhabi’s willingness to deepen cooperation with China.

The UAE and China already agreed to upgrade their relationship to a comprehensive strategic partnership, the highest form of diplomatic relationship, during Chinese President Xi Jinping’s visit to the UAE in 2018.

Beijing was also the venue for Qatar’s Emir Tamim bin Hamad Al Thani’s meeting with Abu Dhabi Crown Prince Sheikh Mohamed bin Zayed Al Nahyan in February 2022, for the first time since the end of the Gulf rift in 2021.

Military cooperation between the GCC, China, and Russia

The militarization and digitalization of Saudi-Emirati relations with China and Russia show the widened scope of the Gulf pivot to Asia beyond bilateral trade. China has long been absent in the direct security engagements in the Gulf. Yet, the recent reports signal a change in Beijing’s position. Based on a U.S. intelligence report, in 2021, the Wall Street Journal claimed that China was secretly building a military facility near a port in Abu Dhabi. The fate and the details of the Chinese facility remain unknown; yet, it is clear that China started to engage with the Gulf states through military diplomacy, including niche arm sales and joint military exercises.

The recent pledge to increase military cooperation between China and Saudi Arabia falls into these efforts. Chinese arms sales to Saudi Arabia rose from $35 million to $170 million between 2015 and 2020, and to the UAE from $45 million to $121 million over the same period.

On the Russian side, increasing arms transfers from Moscow to the Gulf, particularly to the UAE, is well documented. Russia and the UAE signed a declaration of strategic partnership in 2018 and engaged in joint investments in the military industrial sectors. Saudi acquisition of Russian S-400 air defense systems was reportedly on Russian Foreign Minister Sergei Lavrov’s agenda on his 2021 visit.

Digital infrastructure and cybersecurity cooperation is another sign of the Gulf pivot to Asia, particularly to China. The UAE Telecommunication Company signed a deal with Chinese Huawei to provide 5G services to the Emirates in 2019. More recently, in February 2021, Huawei and Emirati partners leveraged 5G multi-access edge computing to live broadcast the UAE President’s Cup, an annual cycling event.

In March 2022, the UAE Cybersecurity Council inked a deal with Huawei to launch a jointly established independent think-tank on cybersecurity. More recently, Saudi Arabia has announced that Riyadh is becoming a regional hub for Chinese Alibaba Cloud operations, as the company pledged up to $500 million in investments in Saudi Arabia over the next five years.

Testing the limits of hedging

The UAE’s decision to suspend a billion-dollar deal of U.S.-made F-35 fighter jets in December 2021 over Washington’s attempts to bloc technology transfer from China to the Emirates, which shows the extended limits of hedging strategies of the small Gulf monarchies.

The Russian invasion of Ukraine is another striking example of changing U.S.-Gulf relations as Gulf states refused to pump oil into the market, and have kept cordial relations with Russia’s Putin with which they deepened bilateral cooperation in many areas.

Washington’s relations with Riyadh and Abu Dhabi have recently become strained over a number of issues and the two Gulf monarchies’ deepened cooperation with Russia and China has been one of them. “Washington is dealing with a far more assertive, confident generation of Gulf leaders who have been hedging their relationships to be more independent of the U.S.,” notes a recent article in the Financial Times, underlining the Gulf states’ closer relations with Moscow and Beijing.

The million-dollar question is whether Saudi and Emirati alignment with Russia and China presents a real shift in their relations with the U.S. “Emirati and Saudi responses to the invasion illustrates the shifts in both Gulf states foreign policies,” Giorgio Cafiero, from Gulf States Analytics, told Politics Today.

“For a number of years, the GCC states, including Saudi Arabia and the UAE, have become gradually less confident in the U.S. as the security guarantor for the states in the Gulf subregion. … There is a sense in the Gulf that it is time to further diversify their alliances and partnerships in order to gain greater autonomy from the U.S. and become less dependent on Washington,” Cafiero added.

Yet, it might be unrealistic, perhaps impossible, to claim a total rupture in bilateral relations with the U.S. “A post-American Gulf” in terms of security structures appears as an unlikely outcome for the short term. President Biden’s visit to Saudi Arabia in July as part of his first Middle Eastern tour since he took office, demonstrates the resilience and the importance of U.S.-Gulf relations. During the visit, Biden is also expected to join a meeting of the Gulf Cooperation Council (GCC) plus Egypt, Iraq, and Jordan which too will be present at the meeting.

What is certain, however, is that the Saudi, Emirati and American security considerations after the Arab Uprisings are growingly unmatched, and the two Gulf states’ deepened strategic relations with Russia and China are becoming a reality. This might have some significant repercussions, both globally and regionally.

Global and regional implications

On the global level, increasing Saudi and Emirati alignment with Russia and China signals an ideational tilt towards the so-called autocratic stability in the non-Western world.

“We should also keep in mind that when talking about the UAE and Russia, there are some ideological, ideational, and intellectual synergies that help us understand why the UAE has moved closer to Russia in recent years,” Cafiero noted to Politics Today.

Yet, it might be unrealistic, perhaps impossible, to claim a total rupture in bilateral relations with the U.S. “A post-American Gulf” in terms of security structures appears as an unlikely outcome for the short term. President Biden’s visit to Saudi Arabia in July as part of his first Middle Eastern tour since he took office, demonstrates the resilience and the importance of U.S.-Gulf relations. During the visit, Biden is also expected to join a meeting of the Gulf Cooperation Council (GCC) plus Egypt, Iraq, and Jordan which too will be present at the meeting.

What is certain, however, is that the Saudi, Emirati and American security considerations after the Arab Uprisings are growingly unmatched, and the two Gulf states’ deepened strategic relations with Russia and China are becoming a reality. This might have some significant repercussions, both globally and regionally.

Global and regional implications

On the global level, increasing Saudi and Emirati alignment with Russia and China signals an ideational tilt towards the so-called autocratic stability in the non-Western world.

“We should also keep in mind that when talking about the UAE and Russia, there are some ideological, ideational, and intellectual synergies that help us understand why the UAE has moved closer to Russia in recent years,” Cafiero noted to Politics Today.

The shared ideational values—the rule of a strongman, confined and controlled civil society activism, and secular apathy in politics—enhance the deepening foothold of autocratic stability claims in world politics.

Regionally, the United States’ ultimate upper hand in bilateral relations is being shattered as Saudi Arabia and the UAE have mastered deploying their geopolitical advantages and diversifying their partnerships with Russia and China.

The Saudi-Emirati responses to the Russian attacks in Ukraine served as a “red flag” for Washington in terms of its strained relations with both countries over human rights abuses, the war in Yemen, and relations with China. The U.S., therefore, is likely to face much more assertive Gulf states which will demand tangible support for their security concerns.

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Nesibe Hicret Battaloglu is a Research Assistant in the Gulf Studies Center, Qatar University, Doha, Qatar and a PhD Candidate at the Middle East Technical University (METU) in Ankara, Turkey. Battaloglu obtained an MA Degree in Gulf Studies at Qatar University with a thesis on Turkey and Iran’s soft power in Gulf Cooperation Council (GCC) countries. Her research interests are international relations of the Gulf monarchies, Turkey GCC relations and identity and foreign policy nexus in the Gulf.

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