Repaving the road

The New Silk Road: How a Rising Arab World is Turning Away from the West and Rediscovering China

by Ben Simpfendorfer, Palgrave Macmillan US$39.95

The events of September 11, 2001 changed the way the Middle East does business. Suddenly it became much harder for Arab traders to enter the US and Europe, effectively disconnecting them from one of their major sources of imported goods. Into the breach stepped China. Rather than close its borders to Arab business, Beijing kept the lines of exchange open and the country’s manufacturing hubs began to fill the gap left by the West. Consequently, China overtook the US as the largest exporter to the Middle East.

This sea change in Sino-Arab relations forms the basis of The New Silk Road: How a Rising Arab World is Turning Away from the West and Rediscovering China, written by Ben Simpfendorfer, Royal Bank of Scotland’s chief China economist.

As the title suggests, the Chinese and Middle Eastern worlds are old acquaintances, having traded along the Silk Road until the route collapsed around 1400 due to political strife. As a result of September 11, the road – metaphorically, at least – is being repaved.

Simpfendorfer believes this renewed connection is both stronger and more evenly balanced than its predecessor. Arab traders (more than 200,000 each year) primarily travel to Yiwu, China’s small commodities capital in Zhejiang province, in order to purchase goods to take back home. Chinese traders, mostly young women, relocate to the Middle East to set up wholesale markets, escaping fierce competition at home.

Then, of course, there is China’s reliance on Arab nations to meet its energy needs. A slice of the oil profits are, in turn, funneled back east. Arab sovereign wealth funds such as the Abu Dhabi Investment Authority actively invest in Chinese stocks through the Qualified Foreign Institutional Investor program while Arab oil firms become stakeholders in Chinese oil refineries.

But the 21st century Silk Road is not just about the exchange of goods. Ideas have become a valuable commodity, with Arab governments now looking to the Chinese growth model as a blueprint for modernizing their own economies. Syria, for example, has already copied China’s system of economic free trade zones.

Simpfendorfer is in a unique position to discuss the connection between the Arab world and China, having covered both regions in a professional capacity. In addition to providing sound economic analysis, he takes the reader beyond the realm of numbers and hones in on some of the nuances to the Sino-Arab connection.

He is quick to note the irony of the Middle East seeking guidance from a growth model in which women have featured so strongly – whether working in factories in the Pearl River Delta or setting up trading hubs abroad. In parts of the Arab world, women are not permitted to work until after they marry and even then their options are severely limited. That said, once Simpfendorfer scratches beneath the surface, he discovers that Arab women are far more economically involved than one might have thought, for example placing orders via the internet rather than working on the factory floor. Simpfendorfer argues that contact with their Chinese counterparts at wholesale markets could help bring women to the forefront of the Middle East’s own growth story.

Positive PR

Another area of interest is the media’s influence over Sino-Arab relations. Beijing has cultivated acceptance in the Middle East of China’s growing role in the world by making regular appearances on the Al Jazeera television network. And, crucially, the public faces of China in the Arab world can express themselves in the local language. This has elicited a more favourable public reaction than that received by the US, which hasn’t displayed a similar number of competent Arabic speakers.

Xinhua, China’s state-run news service, also provides China-based news stories to newspapers and magazines in the Middle East, giving its view of China and the region. Again, the message is conveyed in Arabic, which means the reports are more accessible to local media.

Western countries could learn something from China as it tries to develop better relations with the Middle East. One major lesson is that relations are a give and take process in which knowledge comes from both sides. If these countries engaged with the Arab world on an equal footing – and, ideally, in Arabic – they might be able to gather the goodwill and momentum required to forge a positive long-term relationship.

JOHN GUISE