In this piece, Edwin Tran examines China’s involvement in the Hashemite Kingdom, and how Jordan’s trade landscape is increasingly dominated by Beijing’s “Belt and Road” ambitions. Beyond trade, Edwin explores the financial and pandemic support that China has offered the Kingdom, and how such support is manifest in a highly different form to that offered by the U.S. and other international institutions.
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2020 has been a year dominated by many simultaneous large-scale events. From the ongoing global pandemic, to major political developments all across the world, nothing about this year feels precedented. However, while many of these events have been surprising and seemingly spontaneous, other developments have remained remarkably consistent. Many thought that China’s “One Belt, One Road” initiative would face significant hardship. China’s mishandling of the Coronavirus outbreak in Wuhan, coupled with major diplomatic spats across the globe, seemed like signs of a weakening Chinese presence.
However, it has become clear that the COVID-19 pandemic has done, at least currently, little to significantly challenge China’s foreign involvements. In many countries, the influx of Chinese companies, nationals, and investments has remained relatively steady. Much of this can be seen in various African countries, where Chinese interest is a political phenomenon with years of precedence. However, other regions have also continued to see Chinese involvement. In particular, the Levantine region of the Middle East is no stranger to the political aspirations of Beijing. In Jordan, Lebanon, and other Levantine countries, China continues to be an omniscient presence, with huge sums of money being invested into these countries. The Hashemite Kingdom of Jordan, in particular, is a good example of just how pronounced the Chinese presence in the region can be.
Deficits, Imbalances, and the Jordanian-Chinese Gulf
If there’s one figure that illustrates the Chinese-Jordanian relationship, it would be the World Bank’s assessment of trade balance between the countries. As of 2020, Jordan boasted a dramatic trade imbalance of -2.6 million (in thousands of USD). It is the highest difference, although the Kingdom of Saudi Arabia follows behind as a close second. Although the United States has strong trade relations with Jordan, it is unparalleled to China’s own trade prowess. Even more interesting to note is that while Saudi Arabia’s main exports to Jordan are in energy, China’s exports are incredibly diversified. Jordan imports everything from shoes, to air conditioners, and to vaccines.
It is important to first contextualize just how China came to such a prominent role in Jordan’s economy. In fact, for many years, Jordanian-Chinese relationships were non-existent. During Jordan’s Black September in 1970, the Communist Party of China (CCP) supported the Palestinian fedayeen in their attempts at overthrowing the monarchy. However, in the years following U.S. President Nixon’s pivot to China, the Jordanian government would follow suit. In the 1980s, Jordan began to seek further relations with China. Jordan’s growing ties with China coincided with new economic developments spearheaded by Deng Xiaoping, paramount leader of the CCP in that time. In particular, the development of China’s special economic zones highlighted the country’s first forays into a more open economy, with export-based production being at the center of these new zones.
Jordan and the BRI Project
The story from there is history. China, as with many other parts of the world, has become one of the dominant exporters to Jordan. However, with the rise of paramount leader Xi Jingping and the development of the “belt and road initiative,” the Jordanian-Chinese dynamic is certainly changing. In fact, China’s movements in recent years have seen a ramp up in trade deals and bilateral negotiations. China has even admitted to this. According to a 2013 statement from the Chinese Ministry of Foreign Affairs, Chinese-Jordanian relations “developed at a faster pace. Exchanges and cooperation in various fields continued to make new progress.” In fact, in September, King Abdullah attended the China-Arab States Expo held in Ningxia. There, King Abdullah personally met with Chinese Premier Li Keqiang. Shortly after this, China and Jordan successfully negotiated a deal to create an oil-shale plant in Jordan, with some experts valuing the deal at around $2.5 billion. Other deals established in September 2013 included those with “Xinjiang Goldwind Science and Technology Company and China International Water and Electric Corporation to design, construct, and operate a wind-powered 300-megawatt plan in Jordan.”
In 2014, Jordan began to ramp up its own exports, sending raw goods and textiles to China. In 2015, China and Jordan concluded an agreement valued at $2.8 billion toward the construction of a Jordanian rail system. Meanwhile, Jordan’s Aqaba Special Economic Zone Authority (ASEZA) established a “major investment agreement with China’s Shenzhen Chamber of Investment” aimed at developing Aqaba’s industrial sectors. This then came around the same time as the Jordanian Armed Forces (JAF) accepted a Chinese grant of around $4.7 million to purchase Chinese military equipment. An additional deal emerged in education, with the China University of Geosciences in Wuhan announcing plans to build a school in Amman dubbed “the Silk Road Academy.” Economists estimated that the total value of investments by China in that month alone had reached somewhere around the $7 billion mark. The U.S. State Department, on the other hand, reportedly only provided around $1 billion in aid and official U.S. reports indicated that in a 5 year period, Jordan has only received $6.375 billion.
In 2016, China made its Middle East aspirations incredibly clear. In a text called the “Arab Policy Paper,” the Chinese government highlighted the significance of Jordan and the Levant. In fact, the opening lines of the document recount stories of a time “two thousand years ago, [where] land and maritime Silk Roads already linked the Chinese and Arab nations.” When moving back to the present, the document flatly states that much of China’s current policy in the region is focused on the “process of jointly pursuing the Silk Road Economic Belt and the 21st Century Maritime Silk Road initiative.”
By 2017, China’s Ministry of Commerce was reporting significant figures, estimating that “Jordan’s imports from China reached US$2.772 billion, and exports to China reached US$164 million.” In 2018, Jordanian sources estimated that trade relations between the two countries were now valued at around $3 billion, while Chinese officials announced cooperative construction plans aimed at building a new facility known as the Fujian Maritime Silk Road Commodity Centre. High level discussions between Chinese business leaders and Jordanian officials (all the way to King Abdullah himself) continued throughout 2018 and 2019. At the same time, Chinese-Jordanian negotiations throughout the 2010s resulted in a huge influx of Chinese tourists. Between 2018-2019, Chinese tourism in Jordan had increased by an incredible 20%.
In the Age of COVID-19
With the advent of the Coronavirus outbreak, many believed that China’s status in the region could be in jeopardy. However, cooperative efforts were quickly coordinated. As Jordan began to implement strict quarantine measures, Jordanian officials reached an agreement with their Chinese counterparts. Tens of thousands of sets of personal protective equipment, gloves, face masks, and test kits were sent from China to Jordan. Individual firms joined in these efforts. In April, Jack Ma, co-founder of Alibaba, was able to send over 300,000 face masks and 100,000 test kits to Jordan. Jack Ma would later be awarded the King Abdullah II ibn Al Hussein Order for Distinction of the First Degree for his efforts. Other firms also joined in these efforts. China’s State Development & Investment Corporation reportedly donated medical equipment worth over $1.2 million USD to Jordanian hospitals. These efforts can be summed in a June statement provided by Jordan’s Health, Minister Saad Jaber, noting that “since the outbreak of the coronavirus in Jordan, we started cooperating with China in this regard, and our cooperation is solid.” More recently, Chinese-Jordanian cooperation has resulted in Jordanian involvement in China’s phase 3 trial of a potential COVID-19 vaccine.
The pandemic is still ongoing, and few are certain as to what the full ramifications are. However, there are possible takeaways. The most interesting dynamic that will emerge after the pandemic’s end is the competition occurring between China and the United States. In many ways, Jordan acts as a microcosm of the ongoing dispute between these two hegemons, with the particular strategies of these nations emblematic in their approaches toward Jordan. Both countries are major players in Jordan’s economy, with the United States trailing just behind China and Saudi Arabia in total trade value. The United States projects influence through its foreign aid and, more importantly, in its security arrangements with Jordan. By supporting Jordanian stability and security, the United States receives immense political leverage and influence. China on the other hand has focused its efforts mainly on the economic side. With the United States already playing the role of guardian, China is able to act more subtly, offering financial incentives that the United States might be unwilling to give. An incredibly salient statement comes from Liu Chao, a political worker at China’s Amman embassy. Back in 2013, during the China-Arab States Expo, Chao explained:
“We do not interfere with domestic matters,” he said. “When there is domestic unrest, we do not comment. This is a diplomatic philosophy based on totally different values from America, who likes to ‘look around in other people’s homes.’ China does not do this.”
Scholars have long noted that the appeal of China’s BRI loans come from their relative lack of strings. Unlike loans by international institutions like the International Monetary Fund or from the United States, China does not ask its loan recipients for changes to political or economic institutions. In a country like Jordan, which has a history of problematic reforms because of IMF stipulations, it becomes easy to see why Chinese economic deals may be attractive. The same applies to much of the region, and China has shown keen interest in supporting many players in the region, including Syrian dictator Bashar al-Assad.
For a country with substantial economic issues, this geostrategic competition can act as a boon. Jordanian unemployment has reached to around 23% per official reports, and real figures are certainly higher than that. At the same time, Jordan suffers from a lack of natural resources and a reliance on a single economic industry: tourism. With the advent of COVID-19, this sector has essentially collapsed, and the financial well-being of Jordan is now under more strain than ever before. For Jordan, with a history of failed IMF reforms and financial crises, the Coronavirus pandemic is life or death. Financial and military assistance by these two countries helps Jordan stem impending doom and disaster. However, the pandemic is far from over and sectors like tourism and hospitality are a long way from fully recovering. Jordan will require significant assistance in order to reasonably survive the coming years, and the emerging conflict between the United States and China may very well become a key tool to leverage for that support.
Suggested e-learning courses related to this topic:
- Contemporary Issues in World Politics – University of Naples Federico II
- Central Challenges of American National Security, Strategy, and the Press – Harvard University
- Humanitarian Response to Conflict and Disaster – Harvard University
- International Human Rights Law – Université Catholique de Louvain
Suggested books for in-depth reading on this topic:
- Our Last Best Chance: A Story of War and Peace (King Abdullah II)
- The Making of Jordan: Tribes, Colonialism and the Modern State (Yoav Alon)
- Belt and Road: A Chinese World Order (Bruno Maçães)
Additional geopolitical reading suggestions can be found on our 2020 reading list
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Edwin Tran is an analyst focused on the Levant, following time spent living and researching in the region. He specialises in hybrid organisations and their historical contexts in order to understand their popularity and political successes within civil society.
For an in-depth, bespoke briefing on this or any other geopolitical topic, consider Encyclopedia Geopolitica’s intelligence consulting services.
Cover Photo: Mileli
Fig 1: Lommes
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