China’s mediation efforts and Iran-Saudi Arabia diplomatic normalization Beijing’s win-win agreement

On March 10, Iran and Saudi Arabia, two main regional arch-foes, held a vis-à-vis meeting organized by China in Beijing with the aim of diplomatic normalization. Iran and Saudi Arabia have agreed to re-establish diplomatic relations and reopen their embassies within two months after a weeklong-meetings between Saudi national security adviser Musaad Al-Aiban and his Iranian counterpart Ali Shamkhani, mediated by Wang Yi of the Chinese Communist Party's Political Bureau.

The talks emphasized China’s role in hosting and sponsoring talks between the Saudi Kingdom and Iran, a process that Riyadh described as “proceeding from their shared desire to resolve the disagreements between them through dialogue and diplomacy, and in light of their brotherly ties.” China has until now had a business- and energy-first approach to the Middle East, preferring to abstain from the diplomatic and security charge held, mostly unchallenged, by the United States.

Riyadh-Tehran diplomatic thaw is indeed one of the most important events in the last few years, given the destructive nature of the standoff between the two main regional states. In fact, Saudi Arabia and Iran held several undisclosed face-to-face meetings organized by Russia, Oman, and China to de-escalate the relations, albeit unsuccessfully.

Interestingly, Beijing's successful mediation coincided with Xi Jinping's confirmed third-term presidency, and the US revealed the "Annual Threat Assessment of the US Intelligence Community" document in which China has the starring role of global adversary number one. The paper explicitly shows the US intention to tackle Chinese influence globally, though Washington abstained from any commentaries in this case.

Undoubtedly, the current Biden administration is cautious regarding Beijing's growing footprint in the Middle East region and Riyadh's shift in foreign policy dimension. On the other hand, Saudi Arabia, the US key ally in the Gulf, gradually moves toward China, as it maintains the status of global power and may be an alternative actor in case of the US disengagement with the region. Hence, Saudi Arabia, for its part, is playing the China card in a way that shows a more independent approach.

As for Iran, it views Russia and China tandem as its main strategic defence shield against the US-Israel alliance and other regional states like Saudi Arabia. The confrontation with the West heightened significantly amid the nuclear talks, as Tehran seeks to strike a deal by the end of 2023, before the looming US elections in 2024. In this vein, Tehran seems nervous, as the new potential Republican government in the US will certainly take a hawkish stand on Iran.

Such a scenario will mean the end of communication with Washington and the nuclear talks. Obviously, Iran considers itself a global player, not just a regional one. It straddles Asia as well as the Middle East. In its score, its peers are as much or more Russia and China than the Arab states. Saudi Arabia is not considered a significant threat by Iran, except as a partner and proxy for Washington. Iran wants to take the Saudi piece off the chess table with the deal.

In the case of Iran, confrontation with Riyadh is not the major concern, as Tehran faces international criticism for providing weapons to Russia to aid its invasion of Ukraine, continuing efforts to enrich uranium that could allow it to develop a nuclear weapon, punishing its people for taking part in anti-government protests and for escalating tensions with Israel. These are all items the US has elevated on the world stage as an indictment of the Iranian government.

Many analysts dubbed the China-brokered agreement with Tehran and Riyadh as a diplomatic victory, referring to the US shrinking influence. However, the US has never had a chance to arrange such a meeting due to the lack of dialogue tools with the Iranian regime. Therefore, the US statement that "it welcomes the normalization between Riyadh and Tehran" should not come as a surprise. Also, Chinese interests in bilateral partnership with both states are mostly economic, namely energy, rather than purely geopolitical. This is another reason Beijing cannot challenge the US in the Gulf region.

China will likely use this opportunity to bolster its energy security through a strengthened relationship with the two oil-producing countries. Beijing depends on Iran and Saudi Arabia for oil, while the US and Europe have moved to find energy assurances elsewhere.

In this vein, China will likely attempt to cement the Riyadh-Tehran partnership by arranging a new meeting in the coming months to mediate the diplomatic thaw to resolve other critically essential tasks. Although this mediation may put additional pressure on Israeli PM Netanyahu's government, the process perfectly suits Chinese, Iranian, and Saudi national interests.