i CHINA AND THE MIDDLE EAST HEARING BEFORE THE U.S.-CHINA ECONOMIC AND SECURITY REVIEW COMMISSION ONE HUNDRED THIRTEENTH CONGRESS FIRST SESSION THURSDAY, JUNE 6, 2013 Printed for use of the United States-China Economic and Security Review Commission Available via the World Wide Web: www.uscc.gov UNITED STATES-CHINA ECONOMIC AND SECURITY REVIEW COMMISSION WASHINGTON: 2013 ii U.S.-CHINA ECONOMIC AND SECURITY REVIEW COMMISSION Hon. WILLIAM A. REINSCH, Chairman Hon. DENNIS C. SHEA, Vice Chairman Commissioners: CAROLYN BARTHOLOMEW DANIEL M. SLANE PETER BROOKES SEN. JAMES TALENT ROBIN CLEVELAND DR. KATHERINE C. TOBIN JEFFREY L. FIEDLER MICHAEL R. WESSEL SEN. CARTE P. GOODWIN DR. LARRY M. WORTZEL MICHAEL R. DANIS, Executive Director The Commission was created on October 30, 2000 by the Floyd D. Spence National Defense Authorization Act for 2001 § 1238, Public Law No. 106-398, 114 STAT. 1654A-334 (2000) (codified at 22 U.S.C. § 7002 (2001), as amended by the Treasury and General Government Appropriations Act for 2002 § 645 (regarding employment status of staff) & § 648 (regarding changing annual report due date from March to June), Public Law No. 107-67, 115 STAT. 514 (Nov. 12, 2001); as amended by Division P of the “Consolidated Appropriations Resolution, 2003,” Pub L. No. 108-7 (Feb. 20, 2003) (regarding Commission name change, terms of Commissioners, and responsibilities of the Commission); as amended by Public Law No. 109- 108 (H.R. 2862) (Nov. 22, 2005) (regarding responsibilities of Commission and applicability of FACA); as amended by Division J of the “Consolidated Appropriations Act, 2008,” Public Law Nol. 110-161 (December 26, 2007) (regarding responsibilities of the Commission, and changing the Annual Report due date from June to December). The Commission’s full charter is available at www.uscc.gov. iii June 10, 2013 The Honorable Patrick J. Leahy President Pro Tempore of the Senate, Washington, D.C. 20510 The Honorable John A. Boehner Speaker of the House of Representatives, Washington, D.C. 20515 DEAR SENATOR LEAHY AND SPEAKER BOEHNER: We are pleased to notify you of the Commission’s June 6, 2013 public hearing on “China and the Middle East.” The Floyd D. Spence National Defense Authorization Act (amended by Pub. L. No. 109-108, section 635(a)) provides the basis for this hearing. At the hearing, the Commissioners received testimony from the following witnesses: Dr. Dawn Murphy, Postdoctoral Research Fellow, Princeton-Harvard China in the World Program; Dr. Yitzhak Shichor, Professor Emeritus, the Hebrew University of Jerusalem and the University of Haifa; Dr. Erica Down, Fellow, John L. Thornton China Center, Brookings Institution; Mr. Bryant Edwards, Partner, Latham & Watkins LLP, Hong Kong; Dr. Jon B. Alterman, Director, Middle East Program, Center for Strategic and International Studies; Dr. Joel Wuthnow, Research Analyst, China Studies, CNA; and Dr. Andrew Erickson, Associate Professor and founding member, China Maritime Studies Institute, U.S. Naval War College. This hearing examined China’s policies and perspectives related to the Middle East, including on energy security, trade and investment, regional conflicts and instability in countries like Syria and Iran. In addition, this hearing assessed how China’s Middle East policies impact U.S. interests in the region and beyond. We note that prepared statements for the hearing, the hearing transcript, and supporting documents submitted by the witnesses will soon be available on the Commission’s website at www.USCC.gov. Members and the staff of the Commission are available to provide more detailed briefings. We hope these materials will be helpful to the Congress as it continues its assessment of U.S.-China relations and their impact on U.S. security. The Commission will examine in greater depth these issues, and the other issues enumerated in its statutory mandate, in its 2013 Annual Report that will be submitted to Congress in November 2013. Should you have any questions regarding this hearing or any other issue related to China, please do not hesitate to have your staff contact our Congressional Liaison, Reed Eckhold, at (202) 624-1496 or via email at [email protected]. Sincerely yours, Hon. William A. Reinsch Hon. Dennis C. Shea Chairman Vice Chairman iv CONTENTS THURSDAY, JUNE 6, 2013 CHINA AND THE MIDDLE EAST Opening Statement of Commissioner Jeffrey Fiedler (Hearing Co-Chair) .........................................................................................................1 Prepared Statement ...........................................................................................................3 Opening Statement of Commissioner James Talent (Hearing Co-Chair) .........................................................................................................4 Prepared Statement ...........................................................................................................5 Panel I: China’s Perspectives and Policy in the Middle East Panel I Introduction by Commission Jeffrey Fiedler (Hearing Co-Chair) ..........................................................................................................6 Statement of Dr. Dawn Murphy Postdoctoral Research Fellow, Princeton-Harvard China in the World Program ............7 Prepared Statement .........................................................................................................11 Statement of Dr. Yitzhak Shichor Professor Emeritus, the Hebrew University of Jerusalem and the University of Haifa .26 Prepared Statement .........................................................................................................29 Panel I: Question and Answer............................................................................................39 Panel II: China’s Energy and Other Economic Interests in the Middle East Panel II Introduction by Commissioner James Talent (Hearing Co-Chair) ........................................................................................................54 Statement of Dr. Erica Downs Fellow, John L. Thornton China Center, Brookings Institution ....................................55 Prepared Statement .........................................................................................................58 Statement of Mr. Bryant Edwards Partner, Latham and Watkins LLP, Hong Kong ............................................................62 Prepared Statement .........................................................................................................64 Panel II: Question and Answer ..........................................................................................74 v Panel III: China’s Political and Security Challenges in the Middle East Panel III Introduction by Commissioner Jeffrey Fiedler (Hearing Co-Chair) ........................................................................................................90 Statement of Dr. Jon B. Alterman Director, Middle East Program, Center for Strategic and International Studies ............91 Prepared Statement .........................................................................................................94 Statement of Dr. Joel Wuthnow Research Analyst, China Studies, CNA .......................................................................105 Prepared Statement .......................................................................................................108 Statement of Dr. Andrew Erickson Associate Professor and core founding member China Maritime Studies Institute, U.S. Naval War College .........................................119 Prepared Statement .......................................................................................................122 Panel III: Question and Answer .......................................................................................133 1 CHINA AND THE MIDDLE EAST THURSDAY, JUNE 6, 2013 U.S.-CHINA ECONOMIC AND SECURITY REVIEW COMMISSION Washington, D.C. The Commission met in Dirksen Senate Office Building, Room 608, Washington, D.C. at 9:00 a.m., Commissioners Jeffrey Fiedler and James Talent (Hearing Co-Chairs), presiding. OPENING STATEMENT OF JEFFREY FIEDLER HEARING CO-CHAIR HEARING CO-CHAIR FIEDLER: Good morning and thank you for joining us. Today's hearing on "China and the Middle East" is the sixth hearing of the Commission's 2013 Annual Report cycle. We appreciate your attendance and we encourage you to come to our other public events throughout the year. Our next hearing will be on June 27, and will focus on Macau and Hong Kong. Details will be forthcoming on the Commission's web site at www.uscc.gov. Today's hearing will examine China's relations with the Middle East. Our first panel will assess the motivations behind Beijing's engagement with the region and explore how Chinese policymakers perceive the Middle East in the context of China's broader economic and strategic objectives. While China's engagement in the region pales in comparison to that of the United States, there are indications that Beijing may take a more forward-leaning approach to the Middle East. For instance, so me Chinese scholars have advised that Beijing adopt a new foreign policy emphasizing its political and economic ties to countries in the Middle East and Central Asia. This policy, referred to as "March West," appears to be under consideration by policymak ers in Beijing. In addition to discussing evolving strategic thinking about the region, this panel will also examine China's engagement with Middle Eastern countries