Eight years ago, in September 2015, Jordanian King Abdullah II and Chinese President Xi Jinping signed a landmark strategic partnership agreement between their respective countries which included a series of investment deals worth $7 billion.
The move made strategic sense: over the years, the Hashemite Kingdom has earned a reputation as an “oasis of peace” in the West Asia region among Chinese foreign ministry officials.
At the time, the Jordanian monarch aptly described the visit to Beijing as “a new chapter in bilateral relations.” Montaser Oqla, the former commissioner of the Jordan Investment Council, declared that the accords were “real deals that will be implemented in the coming years.”
The $7 billion investment package was strategically allocated across four major projects:
A $1.7 billion project aimed at constructing Jordan’s first power plant utilizing oil shale in the Attarat area; an impressive $2.8 billion investment earmarked for the development of the national railway network; an agreement with the Chinese conglomerate Henergy to build a renewable power plant capable of generating 1,000 megawatts at a cost of nearly $1 billion; lastly, an investment agreement between the Aqaba Special Economic Zone Authority and the Chinese Chamber of Investment to develop an industrial and logistic zone spanning approximately one million square meters.
Evolving Amman-Beijing relations
Fast forward eight years from the strategic partnership’s inception, which encompassed around 29 Jordanian development projects in the energy and infrastructure sectors, during which Chinese companies acquired stakes in the Jordan Arab Potash Company and the Attarat Energy Company.
Many of these ambitious projects, however, have encountered substantial setbacks. Some stalled right from the outset, like the suspension of the railway network project after the signing of a memorandum of understanding (MoU) with the Chinese company CCECC. The latter had expressed keen interest in the project, even sending an engineering team to Jordan to assess the network’s feasibility.
Other projects faced difficulties after their initiation, such as the “debt trap” Attarat project, which ultimately led the Jordanian government to pursue international arbitration “on the grounds of gross unfairness.”
East meets West (Asia)
Jordan and China’s hot-and-cold journey harks back to the Cold War’s ideological struggle between the capitalist west and the socialist east.
In those days, China championed a revolutionary “anti-imperialist” stance, advocating for the overthrow of monarchies and supporting liberation movements across the Arab world. That trajectory changed in the 1970s with the US-Chinese rapprochement, notably marked by President Richard Nixon’s historic visit to China in 1972.
This event culminated in the signing of the Shanghai Declaration, which laid the groundwork for normalizing relations between Beijing and Washington.
Khair Diabat, a researcher and academic in the Department of Political Science at Yarmouk University, tells The Cradle that this shift in dynamics consequently opened diplomatic avenues for US allies – including Jordan in 1977 – to establish diplomatic relations with the People’s Republic of China.
Samer Khair Ahmed, a prominent writer and researcher specializing in Asian affairs, points out that Beijing’s return to international forums, including reclaiming its permanent seat on the UN Security Council in 1971 (replacing Taiwan), marked another significant milestone.
In 1978, Beijing embarked on a policy of reform and opening-up, which gathered steam following the end of the Cold War. In short shrift, China emerged as a key player in the new global order, fully capitalizing on its newfound international access despite ongoing trade and financial disputes with the US.
In just a few decades, China has transformed into a “global economic giant” that has established mutually beneficial bilateral and multilateral relationships, most notably in the realm of trade, with countries across the world, including those in West Asia.
Investing in the Hashemite Kingdom
Beijing’s inroads into Jordanian markets have been slow and incremental. The first trade exchange between China and Jordan in 1979 amounted to a modest $135 million in exports. Remarkably, this figure had totaled $8 billion by the end of 1988, when Jordan played a pivotal role as an intermediary in procuring Chinese arms for Iraq during its eight-year war with Iran.
In 1999, King Abdullah II’s initial visit to Beijing resulted in a joint statement with then-Chinese President Jiang Zemin, focusing on broad political outlines such as regional security, stability, and the Israeli-Palestinian peace process.
By the time of the king’s 2015 visit, a significant shift in bilateral interests was taking shape, aimed at solidifying a joint strategic partnership and attracting Chinese investment commitments across sectors like energy, industry, transport, and communications.
That year arguably marked the zenith of China-Jordan relations, especially as Jordan joined the Belt and Road Initiative (BRI), President Xi’s ambitious project launched in 2013 to connect the Chinese economy with key global economic regions.
Between 2015 and 2022, trade between the two countries displayed fluctuations without a discernible pattern, primarily due to the considerable disparity in the size of their economies. Even when trade volume reached $4.4 billion in 2021, making China Jordan’s second-largest trading partner after Saudi Arabia, Amman’s trade deficit persisted.
Notably, Jordan has hosted numerous branches of Chinese companies, particularly in the automotive and clothing sectors. Chery Automaker, for instance, established a showroom in Jordan in 2012, aiming to establish a $30 million assembly line in the country. Jerash Clothing and Fashion Company, with annual revenues of $70 million, was listed on the New York Stock Exchange in 2018.
Steering clear of Washington’s ‘red lines’
Jordanian-Chinese relations have evolved amidst heightened tensions between Washington and Beijing. The former has provoked the latter over the sensitive Taiwan issue and initiated a trade and technology war against China — all as part of a broader US strategy pivot to Southeast Asia to stymie China’s increasing global clout.
This geopolitical face-off presents a challenge for Amman, whose important economic interests with China have the potential to upset its long-term political alliance with the US. Economist Zayan Zwaneh argues that this clash of interests hampers the implementation of Chinese projects, including the Attarat project, which was a significant outcome of the Jordan-China partnership.
Some background: In 2014, Prime Minister Abdullah Ensour’s government signed an agreement with Attarat Power Company to construct a plant generating 470 megawatts of electricity, which would cover a substantial portion of Jordan’s electricity needs by 2020.
However, the Jordanian partner sold its stake to a Chinese company in 2017, and by the end of 2020, the Jordanian government had turned to international arbitration citing “outrageous injustice” because of high costs and annual losses estimated at more than 200 million dinars.
Jesse Marks, a researcher on China-Middle East relations, notes that Amman is cautious not to cross certain “red lines” in its relationship with Washington. These red lines encompass large economic projects like Attarat, military cooperation, and specific types of technology, communications, and infrastructure investments that could undermine US strategic interests.
Pentagon documents leaked earlier this year reveal US pressure on Jordan to exclude Chinese tech giant Huawei from tenders related to fifth-generation equipment. The American threats look to have been successful. While previously, Huawei had been a key provider of infrastructure equipment for second, third, and fourth-generation networks in Jordan, national telecommunications companies Zain, Umniah, and Orange have now turned to Swedish or Finnish multinational companies for their fifth-generation network development.
At the local level, the cost factors of local products, including energy, labor, and transportation, also play a crucial role in either attracting or impeding investment projects and government tenders. In 2019, the Chinese ambassador to Oman, Pan Weifang, highlighted instances of Chinese projects stalling, such as a Chinese company withdrawing from a solid waste power plant tender due to the “high prices of electrical energy.”
Balancing aid and economic cooperation
Researcher Diabat sheds light on the inherent asymmetry in economic relations between Jordan and China. First, there is China, “a country that competes in the international system with a number one economy, military power, huge human size, and vast geographical area — versus to a small state (Jordan) that does not have sufficient natural resources and mediates a state of regional instability.”
Consequently, China’s approach to Jordan is that of a small country viewed within the broader context of Beijing’s West Asia policy. Diabat suggests that “even if the relationship is framed in the name of a ‘strategic partnership,’ China has signed similar partnerships with 180 countries in the world.”
But Marwan Soudah, president of the International Union of Arab Writers and Friends of China, urges the need for Amman to capitalize on these investment opportunities. He emphasizes that economic relations with China should extend beyond mere trade exchanges or occasional aid gestures like providing rice or donating Sinopharm vaccines against COVID-19.
While acknowledging China’s contributions, such as providing customs inspection equipment to the Jordanian Customs Department and humanitarian aid to Syrian refugees in Jordan, Soudah stresses the importance of fostering economic cooperation and not relying solely on financial aid, which Jordan has received from the US for decades.
The Saudi diplomatic success story
Economist Zwaneh underscores the necessity for balance and diplomacy in managing Jordan’s relationships with both the US and China. This approach could enable Amman to exploit political opportunities stemming from the interdependence of the Chinese and American economies, despite their political and economic differences.
Zwaneh points to Saudi Arabia as an example, where skillful diplomacy has led to the attraction of substantial Chinese investments, amounting to $43.5 billion in 2020. Riyadh has also leveraged its position to facilitate Chinese-sponsored Saudi-Iranian reconciliation efforts and withstand US objections to oil production cuts.
In 2016, Saudi Crown Prince Mohammed bin Salman’s visit to China marked a significant milestone in strengthening bilateral relations and broadening technological exchanges between Riyadh and Beijing via substantial partnerships and investments in areas such as smart cities, power grid management, and digital infrastructure. Notably, Huawei played a pivotal role in the development of 5G networks within the Saudi telecommunications market.
These growing ties have led to China’s imports from Saudi Arabia surging to $57 billion, surpassing its exports to the country, which amounted to $30.3 billion. Saudi-Chinese relations have also ventured into strategic endeavors, including Aramco’s involvement in building a $10 billion petrochemical refinery and complex in northeast China.
Moreover, collaborative efforts have extended to the production and testing of various components for satellites and reconnaissance aircraft in partnership with the China Aerospace Science and Technology Corporation.
Unlocking Jordan’s economic potential
However, Asian affairs researcher Ahmed points to the stark distinction in the convergence of interests between China and affluent Arab states — versus non-oil developing countries like Jordan.
Persian Gulf states, he argues, enjoy far more independence and flexibility in pursuing their interests, primarily due to their ownership of oil — a key driver of Chinese foreign policy in West Asia.
Additionally, wealthy countries possess substantial economies and development ambitions, offering China opportunities to integrate its ambitious BRI projects with these countries’ development initiatives. Diabat emphasizes that China’s current interests in the region revolve around energy resources in the Persian Gulf, agricultural and military technology in Israel, and access to large markets with significant populations and resilient economies like Iran.
He hopes that Jordan can present strategic assets that appeal to China and other major powers, such as uranium resources, oil shale reserves, and a renewable energy potential. Diabat suggests that Jordan should focus on offering more than just traditional concessions or geographic proximity to great powers.
While challenges persist, Jordan has the potential to leverage its unique strategic assets and diversify its offerings to attract foreign investment. In a rapidly evolving multipolar world, Jordan’s role in bridging east and west will remain an important aspect of its foreign policy, which it should use to its advantage.