The Belt and Road Initiative: New Driving Force for Sino-Yemen Relationship

Abstract

The Republic of Yemen (North Yemen) and the People’s Republic of China (PRC) established diplomatic relations in 1956, the first Arabian Peninsula country to recognise the PRC as the legitimate representative of the country. Yemen is a significant and strategically important state in the southern Arabian Peninsula bordering Saudi Arabia, Oman, the Red Sea, and the Gulf of Aden within the Arabian Sea (Behbehani. 1985. China and the People’s Democratic Republic of Yemen). The geographical location of Yemen makes it an essential state for the PRC because it enables it an observation point over three regional trouble spots: the Gulf of Aden, the Red Sea, and the Horn of Africa. Thus, Yemen can become the bridge between Asia and Africa, and between the Indian Ocean and the Mediterranean, and a vital component of China’s Silk Road Strategy. The Belt and Road Initiative (BRI) could be used as a new driving force for the Sino-Yemen relationship, especially the integration between the state’s post-war reconstruction and the realization of the initiative.

Keywords

China Yemen Middle East Bab al-Mandab Strait Belt and Road Initiative

Introduction

The Republic of Yemen (North Yemen) and the People’s Republic of China (PRC) established diplomatic relations in 1956—China’s most significant diplomatic development in the Arabian Peninsula region at that time. Yemen was the first state in the Arabian Peninsula region, and the third country in the Arab world, to acknowledge the Beijing government as the legitimate representative of China. Yemen enjoys a unique geographical strategic position at the intersection of the Belt and Road Initiative (BRI) that includes the Silk Road Economic Belt (SREB) and the 21st Century Maritime Silk Road Initiative (MSRI). The Strait of Bab al-Mandab is a strategic waterway and critical junction for world trade, located between Yemen, Djibouti, and Eritrea, where the Red Sea joins the Indian Ocean. Yemen can become the bridge between Asia and Africa, and between the Indian Ocean and the Mediterranean, and is thus a vital component of China’s infrastructure-based development strategy (EIA 2017).

The historical ties between the PRC and Yemen go back 2,000 years when the ancient Silk Road connected trade between them and led to cultural interaction between the Arab and Chinese peoples. Yemen played a significant role in ancient history when it dominated the trade routes, called ‘the incense and gum routes,’ and many powerful nations from east and west set sail and drove their camel caravans in its direction, seeking trade and exchange of knowledge. The ancient Greeks and Romans called Yemen ‘Arabia Felix’ because it was perceived as a happy, or prosperous nation (Askary 2018).

The BRI scheme gives China and Yemen extra incentive to boost cooperation, as this will help to reduce risks and project costs and, in the long term, fully capture the mutual benefits of increased trade, investment, and connectivity in the Middle East. As the newly appointed Chinese Ambassador to Yemen, Kang Yong, said in September 2019, Yemen was among the first countries to recognise the new political system in China. Mutual relations will develop between the two countries because the people of Yemen are seeking a brighter future as a result of this friendship (Al-Sahwah 2019).

This study investigates the aspects behind China-Yemen relationship and examines the synergies between BRI and Yemen’s unique geographical strategic position and natural resources to understand the extent of economic engagement and bilateral relationship between the two nations. The main argument is that PRC’s relationship with Yemen is based on shared or mutually complementary economic interests and a unique geographical strategic position. BRI could be used as a new driving force for the development of bilateral relations and for integration between the state’s post-war reconstruction and realization of the initiative.

Policy coordination, connectivity, trade and investments, and energy cooperation are the main elements of the BRI framework and constitute a clear articulation of the objectives in Sino-Yemeni relations. A cessation of hostilities in Yemen would have significant economic benefits for Beijing, as it would give it access to Yemen’s Bab al-Mandeb Strait, a critical chokepoint that facilitates its objective of expanding the BRI to Saudi Arabia and allow it to actively participate in the trade of seaborne oil across Yemen’s maritime straits.

The Belt and Road Initiative (BRI)

China’s most significant twenty-first century diplomatic and economic activity is the launching of the Silk Road initiative. BRI is the sprawling framework of trade and commercial ties between China and various world regions that have become the flagship foreign policy of the Xi administration. The BRI primarily seeks to open up new markets and secure global supply chains to help generate sustained Chinese economic growth and, thereby, contribute to social stability at home (Watanabe 2019).

The BRI, the most ambitious geo-economic vision in recent history, has both a land-based and a maritime component: the 21st century Maritime Silk Road Initiative (MSRI), whose land-based equivalent is the Silk Road Economic Belt (SREB). The SREB (a series of land-based infrastructure projects including roads, railways, and pipelines) and the MSRI (comprising ports and coastal development) would create a multi-national network connecting China to Europe and Africa via the Middle East. By facilitating trade and improving access to foreign energy resources, it will give China access to new markets. The two schemes are inseparable, and the PRC has set as its goal their parallel implementation (Xinhua 2017).

The BRI provides two pathways for connecting China with Eurasia. The SREB, the one garnering the most attention, is an overland route that begins in Central China, moves through Xinjiang and China’s western region into Central Asia, across the Middle East, and terminates in Europe. The MSRI has one primary sea corridor, also with many hubs and offshoots. It would start in China’s southeastern ports, travel along the coast of Southeast Asia, around India, connect with the Persian Gulf, and end in the Mediterranean Sea (Cai 2019).

The scope of the BRI is broad, covering more than 72 countries along six economic corridors. BRI covers two-thirds of the world’s population, 40 per cent of the global gross national product, and an estimated 75 per cent of known energy reserves (HSBC 2018). The total cost of this initiative, always in debate, has been estimated at $8 trillion (Hoh 2019).

China and Civil War and the Post-War Reconstruction in Yemen

The Yemen civil war, which began in 2014, is one of the more complex events to have emerged from the Arab Spring. The conflict has deep historical roots and reflects long-standing societal and political grievances within Yemen. The conflict has also been widely seen as an extension of the Iran-Saudi Arabia proxy conflict, and as a means to combat Iranian influence in the region. Yemen’s deep political divisions were further exacerbated by the involvement of competing regional powers: Saudi Arabia and the United Arab Emirates backed Yemen’s government while, to a lesser extent, Iran assisted the Houthis (Jan and Majid 2017).

Nearly a quarter of a million people have been killed directly by fighting and indirectly through a lack of access to food, health services, and infrastructure. According to Yemen’s Minister of Planning and International Cooperation, Najib al-Auj, the war-torn country needs a baseline of $28 billion fund for reconstruction efforts over the next four years. Ultimately, Yemen’s reconstruction could run up a bill as high as $60 billion for the post-war restoration of institutions, stability, and security (Habtor 2019).

Beijing’s immediate interest at stake in the Yemen civil war is protecting its economic investments and safeguarding Chinese personnel. According to the Chinese Ministry of Commerce, Beijing has 14 enterprises and 460 personnel in Yemen. China’s trade projects concentrate on oil extraction, telecommunication, construction, roads and bridges, and fishery (Chaziza 2015). Despite the small scale of investment, Beijing is strengthening its economic relations with Yemen through expanding investment. In response to the Yemen crisis, China has completed personnel evacuation and temporarily closed its embassy in Sana’a and the Consulate General in Aden; the date of return to normal operation remains unknown (Poh and Li 2017).

Since the early days of the civil war, the PRC’s policy towards the Yemeni conflict has been clear and consistent, driven primarily by its interest in maintaining close strategic relations with Saudi Arabia. In both bilateral and multilateral initiatives, China has steadily supported the internationally recognised government of Yemen, always stressing the importance of Yemen’s national independence, sovereignty, and territorial integrity. Beijing has also regularly urged all parties to the conflict to reject the use of violence and resolve the conflict by political means through intra-Yemeni dialogue (Burton 2019).

As for the role of other states in the Yemeni conflict, Beijing generally encouraged regional countries to take the lead in addressing the crisis, and it suggested that the international community should not only support the Yemeni political dialogue but also provide development and humanitarian assistance to the country (Xinhua 2019). China also welcomed the Riyadh agreement signed between the Yemeni government and the Southern Transitional Council (STC), for forming a new government and integrating the armed forces (Global Times 2019).

The PRC’s growing economic ties in the Middle East give it a large stake and the influence to be more active in helping to mediate regional conflicts. Unlike other major powers, Beijing has stayed out of regional rivalries and has forged ties with all sides. China also carries little of the historical or cultural baggage associated with other players in the region. As such, it is well-placed to serve as an honest broker in facilitating dialogue possible (Chaziza 2018a). Following unsuccessful rounds of UN negotiations, Beijing tried to bridge the trust deficit between the Houthis, the Yemeni government, and the UN. For instance, in December 2016, a high-level delegation of Yemen’s Houthi rebel movement held a three-day visit to China and met with the Foreign Ministry’s Director-General, Deng Li, to discuss the ongoing conflict in Yemen (Cusack 2016). Although Beijing’s attempt to mediate was unsuccessful, Houthi leaders and Yemeni government representatives thanked Beijing for their objective and impartial stance and expressed willingness to maintain close communication with China (Chang 2018).

The PRC has generally played a low-key but supportive role in UN-led peace negotiations to mitigate the Yemeni civil war. China works alongside the US, Europe, Russia, and Arab Gulf countries, following the international consensus on Yemen that backs President Abdu Rabbo Mansour Hadi’s government as the legitimate government of Yemen, as well as UN Security Council resolutions and the Stockholm agreement. Beijing is striking a balancing act between regional rivals, as it tilts towards Saudi Arabia’s position in Yemen while concurrently endorsing the Iranian nuclear deal (Chang 2020).

Beijing is also interested in a role in reconstruction efforts in Yemen, both participating in, and possibly financing, post-war reconstruction through its BRI framework and could help raise China’s diplomatic and financial profile in an area that it regards as strategically important (Hornschild 2016). As a major trade partner, Beijing has an outsized economic presence in Yemen. As the former Chinese ambassador to Yemen, Tian Qi, said in June 2017, Beijing is ‘willing to actively participate in Yemen’s future economic reconstruction process,’ as it promotes its BRI in the region (Chang 2018).

Nevertheless, the ongoing conflict in Yemen has exacted a disastrous toll on the country’s people, economy, infrastructure, and institutions, as well as the ties that bind them. The effort to rebuild both the tangible and intangible aspects of Yemeni society will be complicated by not only the fragmentation among Yemen’s political and military factions, but also by the multitude of foreign actors and interests that, directly and indirectly, have come to exert an influence over the conflict, or could do so in the future (Diwan et al. 2018).

Yemen’s Integration within the BRI

The PRC’s relationship with Yemen includes four major areas for cooperation within the BRI: policy coordination, connectivity, trade and investments, and energy cooperation. However, each country views the BRI framework and reacts to it according to its perspective and its own national interests and international status. Therefore, the two nations have very different attitudes regarding how to realize the new Silk Road vision (Ye 2015).

Policy Coordination

China’s relations with Yemen include promoting political cooperation between countries, creating mechanisms for dialogue and consensus-building on global and regional issues, developing shared interests, deepening political trust, and reaching a new consensus on cooperation (NDRC 2015). In 2013 the two countries also held a series of high-level exchanges.

In January 2013, Vice foreign minister Zhai Jun visited Yemen. In March 2013, Chinese Ambassador to the UK, Liu Xiaoming spoke at the 5th Friends of Yemen Ministerial Meeting in London for the Chinese government. In September 2013, foreign minister Wang Yi attended the 6th Friends of Yemen Ministerial Meeting concurrent with the 68th Session of the UN General Assembly in New York. That same month, Yemeni Minister of Industry and Trade Saadaldeen Ali Salim Talib visited China and attended the China-Arab States Expo 2013 in Ningxia. Minister of Defense, Muhammed Nasser Ahmed, also visited China (Ministry of Foreign Affairs 2013a).

In November 2013, at President Xi’s invitation, President Abdu-Rabbuh Mansour Hadi paid a state visit to China. President Xi said that bilateral cooperation had developed smoothly in all areas, and the two countries supported each other on major issues and core interests. President Xi assured President Hadi that no matter how the international situation changes, China is willing to conduct friendly exchanges with the Yemeni government, its legislative bodies and political parties, to exchange experiences in governing state affairs and politic actions (Ministry of Foreign Affairs 2013b).

During President Hadi’s visit, the two countries signed agreements on economic and technical cooperation, enhancing cooperation in technical education and vocational training (Ministry of Foreign Affairs 2013a). However, Yemen was soon after mired in political unrest and armed conflict, which intensified in early 2015. The Houthi movement (also known as Ansar Allah or Partisans of God) is a predominantly Zaydi Shiite revivalist political and insurgent movement formed in the northern Yemeni governorate of Sa’dah led by members of the Houthi family. The Houthis took over the capital, Sanaa, and advanced southwards to Aden on the Arabian Sea (Mullen 2015). The crisis quickly escalated into a multi-sided war, with neighbouring Saudi Arabia leading a coalition of Gulf countries against the Houthi rebels (Vonberg and Elbagir 2018). As a result, the PRC suspended its embassy operations in Yemen (Ministry of Foreign Affairs 2015).

Yemeni and Chinese officials emphasised the importance of boosting mutual ties under the BRI framework. In July 2017, Tian Qi, then Chinese Ambassador to Yemen, said, ‘China firmly supports a political solution to the crisis and hopes Yemen can restore peace and stability […] China would like to join hands with Yemen to push forward BRI to benefit the people of the region’ (WFP 2017).

One year later, Chinese foreign minister Wang Yi held talks with Yemen foreign minister Khaled Hussein Alyemany, visiting China for the 8th Ministerial Meeting of the China-Arab States Cooperation Forum (CASCF). Foreign minister Wang said that China and Yemen are traditionally friendly countries. Beijing is ready to work with the Arab states, including Yemen, to implement the outcomes of the 8th CASCF’s ministerial meeting and continually deepen China-Yemen cooperation in the BRI. For his part, foreign minister Khaled reaffirmed their joint commitment to the initiatives and propositions put forward in the speech, including the joint construction of the BRI by the Arab states and China (Ministry of Foreign Affairs 2018).

In June 2019, Chinese Ambassador to Yemen Kang Yong, in a statement to the Yemeni News Agency (Saba), stressed the importance of Yemen’s role and participation in the BRI due to Yemen’s significant geographical location and its natural resources (Belt & Road News 2019a). In July 2019, a meeting took place in Riyadh between the Yemeni prime minister and Chinese Ambassador to Yemen Kang Yong. Yemeni Prime Minister, Maeen Abdulmalik, praised Yemeni-Chinese historical relations and China’s firm support for the government of Yemen and Yemeni people in ending the coup, realising security and stability, and regaining the state. The Chinese ambassador responded that his country was closely following the work of the Yemeni government and its achievements on the ground in tangibly improving services, especially in Aden, and its support for its efforts to normalise the situation and overcome the effects of the war (MENAFN 2019).

Connectivity

Facilitation of connectivity is one of the essential ways to integrate Yemen’s post-war reconstruction within China’s BRI framework. Yemen would have to optimise its infrastructural connections and also adapt its technical systems to those of the other BRI countries. The Bab al-Mandeb Strait is a critical chokepoint since the strait forms a vital strategic link in the maritime trade route between the Mediterranean Sea and the Indian Ocean via the Red Sea and the Suez Canal. It can facilitate Yemen’s objective of expanding the BRI framework to Saudi Arabia and allow China to actively participate in the trade of seaborne oil across Yemen’s maritime straits.

The U.S. Energy Information Administration (EIA) defines world oil chokepoints as narrow channels along widely used global sea routes, some so narrow that restrictions are placed on the size of the vessel that can navigate through them. Chokepoints are a critical part of global energy security because of the high volume of petroleum and other liquids transported through these narrow straits. The Bab al-Mandeb Strait is a chokepoint between the Horn of Africa and the Middle East, and it is a strategic link between the Mediterranean Sea and the Indian Ocean. The strait is located between Yemen, Djibouti, and Eritrea, and it connects the Red Sea with the Gulf of Aden and the Arabian Sea (Schofield 2014).

Geographically, the strait controls the southern access to the Red Sea and the Suez Canal, which links the Indian Ocean and the Mediterranean Sea. As a result, the Bab al-Mandeb Strait is a key chokepoint in the main maritime route connecting Asia and Europe, as well as an important passage in China’s MSRI. Sailing between Asia and Europe without transiting through the strait would entail circumnavigating either the whole of Africa via Cape of Good Hope, or the whole of Eurasia via the Arctic Sea. The fact that both alternative routes would be extremely inconvenient makes the Strait of Bab al-Mandeb a true ‘maritime chokepoint’ (Rodrigue 2013).

As a crucial hotspot for global trade, each year billions of dollars in maritime trade pass through the strait, with an estimated 12.5 to 20 per cent of global trade and 4 per cent of global oil supply passing through every year (HSBC 2019). The Strait of Bab al-Mandeb has become crucial for China’s MSRI that relies on maritime shipping for its international trade relations. Commercially the MSRI is, above all, about aligning the ‘connectivity’ of global shipping lanes and ports, with Chinese capital. The large majority of China’s total international trade passes through this strait, with estimates ranging from 60 per cent to 90 per cent (Yung et al. 2014).

In November 2013, Yemen Gulf of Aden Ports Corporation Captain/Sami Saeed Farea and China Harbor Engineering Company signed an agreement on the expansion and deepening of Aden Container Terminal. The project is being implemented at the cost of $507 million and includes the construction of an additional berth on the western side of the terminal. Completion of the project would make Aden and the other Yemeni ports key components of global trade and economic exchange. However, the project was not carried out because of the ensuing dangerous security situation (Erickson and Strange 2015).

The Chinese intention was to connect the Aden Container Terminal to the BRI framework, on the land route to Oman and across the Hormuz Strait to Iran and Asia, and westwards through a tunnel/bridge to Djibouti and Africa. Another connection to the BRI is through the main ports of Aden, Al-Hudaidah, and Mokha, where in addition to trans-shipment and logistics operations, new industrial parks could be built, benefiting from the proximity to international trade routes and the locally abundant human and natural resources (World Maritime News 2013).¹

The tremendous developments taking place around Yemen, especially on the African continent, due to the BRI - such as the Djibouti-Addis Ababa railway, the Mombasa-Nairobi railway, the Lamu Port-South Sudan-Ethiopia Transport Corridor (LAPSSET), and many more projects - have the potential to transform the continent into one of the fastest-growing regions (Styan 2020). This is a great advantage for Yemen in its post-war reconstruction, which should consider the region as having great market potential, and also consider itself as a major logistics hub. Moreover, in east Yemen, the Chinese-led Asian Infrastructure Investment Bank (AIIB) has already financed feasibility studies and preliminary work on a pan-Omani railway network extending from the Hormuz Strait to the border with Yemen, and new ports and industrial parks on the long coast of the Arabian Sea (Times of Oman 2016).

According to the United Nations Conference on Trade and Development (UNCTAD), around 80 per cent of global trade by volume and over 70 per cent of global trade by value are carried by sea and are handled by ports worldwide. The global seaborne trade expanded by 4 per cent, the fastest growth in five years, and is projected to increase by 3.8 per cent in the period 2018-2023. This trend is driven by booming infrastructure investments generated by China’s BRI, digitalization, electronic commerce (e-commerce), India through its connectivity strategy, and the Gulf monarchies with their projects for building container ports and other efforts to forge energy and trade alliances in the East (UNCTAD 2018).

From the side of the Arabian Peninsula, the major challenges to maritime security in and around the Bab al-Mandeb chokepoint come from Yemen’s Houthi rebels. Most of Yemen’s western coastline along the Red Sea is still controlled by the Houthis, the Iran-backed Shiite insurgents in the north of the country. Since 2016, the Houthis’ long-range missiles and remote-controlled boats filled with explosives have hit American, Saudi and Emirati warships as well as Saudi oil tankers and merchant ships passing through the southern end of the Red Sea. Hence, the need to counter the rising maritime terrorism and to guarantee the security of the many container ports currently under construction or expansion. This means that freedom of navigation through the Bab al-Mandeb Strait will become an increasingly important issue for the Chinese national interest and the interests of the global community, providing scope for possible bilateral and/or multilateral cooperation, albeit in a context marked by strong competition (Ardemagni 2018).

From the side of the Horn of Africa, a fragile region that has been plagued for decades by high levels of violence and instability within and across the borders, the major challenges to maritime security in and around Bab al-Mandeb chokepoint come from terrorism, piracy, human trafficking, and smuggling operations (Calabrese 2020). In December 2008, the People’s Liberation Army Navy (PLAN) launched its first anti-piracy missions in the Indian Ocean and Gulf of Aden (Erickson and Strange 2015).

The Gulf of Aden, between the coasts of Yemen and Somalia, connects to the Red Sea through the Bab al-Mandab Strait and is an important waterway for shipping oil from the Persian Gulf to Europe and North America. About 20,000 ships, from more than 100 countries and regions, pass through the Gulf of Aden every year, with a freight volume that accounts for about one-fifth of the world’s total sea cargo. All exports from Asia to the West must pass through the Gulf of Aden before entering the Suez Canal, with more than 1,000 merchant ships traveling from China to Europe every year via this route (EIA 2017).

In the last decade, because of its geographically strategic location and importance for global trade and shipping, the Gulf of Aden was the world’s most frequented area for pirate attacks against merchant ships. According to Chinese sources, 20 per cent of Chinese ships sailing through the Gulf of Aden faced pirate attacks of some kind (Dossi 2015). In order to secure its merchant and fishing ships, the PLAN joined the missions of the European Operation Atalanta and its force—officially named the EU Naval Force (EU NAVFOR|). China has also shown a willingness to cooperate internationally in order to obtain higher benefits (Gurol and Shahmohammadi 2019.).

In August 2017, China inaugurated its first naval base outside China, in Djibouti, at a cost of $600 million and accommodating up to 10,000 soldiers. According to the Chinese government, the base is intended to help Beijing in its humanitarian and peacekeeping missions in Africa and Western Asia and to lead emergency relief, protection, and evacuation work of Chinese citizens living overseas; additional benefits are of course engagement in military cooperation, including joint maneuvers, and to combat piracy. The base will also be responsible for ensuring the security of international and strategic seaways near the Bab al-Mandeb Strait, in order to protect China’s massive economic interests in Africa and the Middle East. It will serve as a transport route for raw materials from the Horn of Africa countries to China and electronic products from China to the Horn of Africa.

The Chinese naval base in Djibouti came after several years of increasing geostrategic and geo-economic interests in Africa and the Middle East. Beijing is seeking through its naval base to protect its growing economic and strategic interests in this part of the world. It is seeking to secure natural resources to support its economic growth, as is clear when one considers that half the oil imported by Beijing passes through the Bab al-Mandeb Strait, and most Chinese exports to Europe are channeled through the Gulf of Aden and the Suez Canal. The naval base in Djibouti will be mainly for commercial purposes, but it will also provide a military base that will boost the ability of the Chinese navy to project its power; and it will be upgradeable in the future (Chaziza 2018b).

In 2014, the government of Djibouti lodged claims, accusing DP World, majority-owned by the Dubai government, of illegal payments to secure a 50-year concession for the Doraleh Container Terminal (DCT) (Reuters 2018). In February 2018, the Republic of Djibouti unilaterally terminated the contract with DP World, nationalised the container terminal, and granted the right to develop DCT to China Merchants Port Holdings (CM Port) without first having offered the opportunity to DP World. CM Port then began an expansion of the port facilities. When completed, they will provide Chinese-flagged vessels with priority handling and lower docking fees. The DCT has a total of 15 berths over a 4 km long quay. One of the berths is reserved for the use of the Chinese Navy, which has a base on the western edge of the port (Calabrese 2020).

The transfer of the right to develop DCT to CM Port has sparked concern in Washington over its potential to cause a decline in US influence in the region. In a Senate hearing February 2019, AFRICOM commander Gen. Thomas Waldhouser (USMC) noted that two out of five terminals in Djibouti were already under Chinese control, and that U.S. forces rely on DCT to supply nearby Camp Lemmonier, the largest U.S. military base in Africa (Belt & Road News 2019b). Djibouti’s strategic location on the Gulf of Aden makes the area an important military outpost for several world powers, and it is currently the only country in the world to host both the US and Chinese naval bases.

The establishment of China’s first overseas base in Djibouti, also marks a break with Beijing’s traditional non-interference policy in the Middle East and North Africa (MENA) region. Beijing’s longstanding insistence on non-interference principle in the domestic affairs of others, its refusal to envision a foreign military presence, and its resoluteness that its primary focus is the development of mutually beneficial economic and commercial relations are increasingly falling short of what is necessary to safeguard its vital interests. So, despite claims to the contrary, China’s plans to build its own naval base in Djibouti may be a proving ground for further expansion of its military intervention in the MENA region (Chaziza 2018b). It is a projection of Chinese power that expresses the country’s growing interest in the MENA, especially in the BRI framework. The base was constructed as a result of China’s MSRI strategy joining up with the ‘string of pearls’ in the shape of as a series of Chinese navy footholds linking the Indian Ocean, the Gulf region, and the Red Sea (Belt & Road News 2019c).

Energy Cooperation

Investment in energy infrastructure is considered one of the critical areas of cooperation to integrate Yemen’s post-war reconstruction through the BRI. Therefore, the new Silk Road can provide a new framework for more extensive Chinese investments in the Yemen energy industry. Yemen boasts 1,200 miles of coastline, deep-water ports, and a geographic location along major shipping routes which represent economic assets that can be exploited, along with a limited but not insignificant supply of hydrocarbons, especially natural gas (The Soufan Center 2018).

According to EIA, Yemen is not a major hydrocarbon producer relative to several other countries in the Middle East, but the country has sufficient oil and natural gas resources for both domestic demand and exports. Nevertheless, Yemen’s difficult security environment hinders the production and transport of those resources. Yemen’s oil production declined after 2001 as a result of the country’s maturing fields, and attacks on the country’s oil infrastructure since 2011 have led to significant short-term disruptions. Attacks on Yemen’s key oil infrastructure continue to curtail both domestic petroleum consumption and exports. Since 2009 the country has been a Liquefied Natural Gas (LNG) exporter, and the government aims to increase the use of natural gas in many sectors, including in electricity generation. This development could help the country stabilise its economy even without an extremely high oil export price. However, replacing oil export revenues with LNG export revenues does not reduce the country’s dependence on its hydrocarbons sector (EIA 2019).

For Beijing, the unique geographical strategic position of Bab al-Mandab derives from its proximity to the Strait of Hormuz, which provides a vital link to the trade route between the Mediterranean and Asia. Most vessels carrying goods between Europe and Asia, as well as oil from the Middle East to China, pass through the strait before navigating Egypt’s Suez Canal. In the context of Beijing’s growing energy needs and the Middle East as a market to satisfy these needs, securing the Bab al-Mandab Strait is important for China (Gurol 2018). However, oil and gas shipped from the Persian Gulf and the Gulf of Oman to China will not pass through this strait. Hence, the oil and gas passing through the strait will only be that coming from Beijing’s suppliers in North Africa (e.g., Algeria) or the western part of Saudi Arabia.

In the past, the PRC had been active in the exploration of Yemen’s oil reserves, nearly 3 billion barrels of oil and approximately 17 trillion cubic feet of gas (Lackner 2014). Unfortunately, the instability and violence in recent years makes production and export a challenge. In early 2015, the security situation in Yemen was so complicated that a Chinese-owned oil company had to cease operations in the east Al Hajr field (Gresh 2017). Nevertheless, according to Saba News Agency, during his meeting with the newly appointed Chinese ambassador to Yemen, Kang Yong, in October 2019, the Yemeni president said that he is looking forward to the return of Chinese investments to Yemen in terms of oil, gas, and energy (Arab News 2018).

Trade and Investments

As part of the PRC’s relations with Yemen, the aim is to mitigate insofar as possible the barriers to free trade, investment, industrial cooperation, and technical and engineering services to facilitate Yemen’s post-war reconstruction within the BRI framework. Both countries should take a series of measures, such as expanding free-trade zones, improving trade structures, seeking new potential areas for trade and improving the trade balance, devising new initiatives for the promotion of conventional forms of trade (NDRC 2015).

Yemen enjoys great human resources, as most of its population are children and youth under 30, making it a young society capable of progress and plans. Yemen also has abundant natural resources and a diverse climate and topography, making it suitable for integrated agro-industrial development. Such a raised economic platform could allow Yemen and its people to take control of their economy, their resources, and their future (Hussein 2018).

From a purely economic perspective, Sino-Yemeni relations are a secondary concern for Beijing. According to China Customs Statistics (export-import), Beijing-Yemen trade volume has increased to $3.8 billion by 2019 (compared to $2.5 billion in 2018) (HKTDC 2020). Arguably due to Yemen’s troubled political situation since the Arab Spring, the trade between the two countries has been highly irregular. As for trade, Chinese investment in Yemen has also been a small proportion of the PRC’s regional investment. According to the China Global Investment Tracker, Beijing’s investments and construction in Yemen from 2005 to 2013 reached $1.2 billion, while in 2014–2019, they stood at zero. Most of the Chinese investment in Yemen was in real estate ($730 million) while the rest ($470 million) was invested in the energy sector (China Global Investment Tracker 2020).

The last Chinese investment in Yemen dates back to 2013 when the two countries signed a $507 million deal to build power plants and to expand two container ports in the southern cities of Aden through BRI framework (Reuters 2013). Since then, however, no further Chinese investments in Yemen have been recorded. Thus, it can be concluded that PRC does not have a particularly keen economic interest in Yemen, at least not from a purely economic perspective.

Notwithstanding this circumstance, Beijing is heavily dependent on Yemen, which controls the Bab al-Mandab Strait, for its trade with the European continent. In 2018, the EU was PRC’s second trading partner after the U.S. In terms of EU exports, China was the second-largest export partner, while in terms of EU imports, PRC was the first largest export partner, accounting for around 15.4 per cent of Beijing’s overall trade in goods (on average, about Ä1.5 billion per day) (European Commission Directorate-General for Trade 2019). China-EU trade in 2018 amounted to Ä605 billion. During this time, EU exports to PRC were Ä210 billion, and EU imports from Beijing were Ä395 billion; the EU’s trade deficit with China reaching Ä185 billion (Eurostat 2019).

As seaborne trade constitutes the bulk of trade for both the PRC and the EU, most of this trade has to pass through the Bab al-Mandab Strait, making the passage a central location for Beijing’s economy and the success of the BRI framework. Therefore, when looking at Yemen from its unique geographical strategic position, the PRC’s interests in Yemen stability are significant. Any disruption in the navigation through Yemeni waters would have a significant negative impact on PRC’s implementation of the BRI.

Yemen’s humanitarian crisis is now considered the worst in the world. The war in the impoverished Arab nation has resulted in widespread famine, illness, and death. According to the United Nations, 75 per cent of Yemen’s population, just over 22 million people, are in dire need of humanitarian assistance. More than two million Yemenis are internally displaced, almost 18 million food insecure—about half of those are at risk of starvation—and approximately 16 million lack access to safe water, sanitation, and adequate healthcare. Over a million cases of cholera have been reported inside the country—the worst epidemic in modern history (The Soufan Center 2018.).

The humanitarian crisis and the desire to maintain stability in Yemen have led PRC to provide humanitarian assistance. In July 2017, Beijing successfully delivered its first tranche of humanitarian aid to Yemen’s southern port city of Aden. The Chinese government’s assistance package consisted of $22.5 million in relief supplies aimed at ameliorating food shortages in Yemen (Xinhua 2017). Beijing also funds the UN’s World Food Programme (WFP) and the World Health Organization to help combat the cholera epidemic. The Chinese government contributed $5 million which will provide one month of much-needed food assistance to more than 930,000 people suffering from hunger in Yemen (WFP 2017).

In July 2018, at the CASCF, Beijing pledged $23 billion in loans and aid to Arab states, much of which is to support reconstruction and humanitarian efforts in countries like Syria, Yemen, and Jordan (Zhou 2018). In January 2019, in a speech at the CASCF in Beijing, Chinese President Xi Jinping pledged $105 million in humanitarian aid to Palestine, Yemen, Syria, and Jordan. The Chinese government will hand $90 million to Yemen, Syria, and Jordan, with another $15 million earmarked for Palestine. The forum seeks to enhance Chinese-Arab trade relations and has boosted bilateral trade volume (Middle East Eye 2019).

Conclusion

Yemen has emerged as a crucial component of PRC’s MSRI projects due to its unique geographical strategic position and natural resources. As the main transit point between the Indian Ocean and the Mediterranean Sea, the country offers a vantage point on three troubled areas: the Gulf of Aden, the Red Sea, and the Horn of Africa (Chaziza 2020). However, Yemen’s complex characteristics (mostly the political instability and the security situation) could raise challenges for Beijing’s economic interests and BRI development. Maintenance of security at the Arabian Peninsula’s southernmost pinch point, not to mention the Strait of Hormuz, is a real concern for China and other international actors who rely on the region’s maritime trade.

The Bab al-Mandeb Strait will remain an essential strategic chokepoint for trade and the free flow of oil and gas and remains an essential node or chokepoint for PRC’s Silk Road Strategy. Chinese President Xi Jinping’s massive infrastructure plan focuses on the establishment of transport, trade, and communications infrastructure between Beijing and the global markets and sources of raw materials, especially in Europe and Africa, by land, sea, and air.

Yemen’s reconstruction process is likely to unfold for many years, at least, and even decades. There is no doubt that Beijing has the necessary capabilities and the vast resources for Yemen’s reconstruction process, but its policy and conduct in the country raise serious doubts as to the likelihood of its investing these capabilities and resources there. As Chinese foreign minister Wang Yi stated, the Chinese side is willing to continue to provide assistance for the Yemeni side within China’s capacity, especially to help Yemen ease the humanitarian crisis (Ministry of Foreign Affairs 2018). Given these conditions as well as the needs and priorities of the Yemen government, it seems reasonable to assume that the post-war reconstruction, now and for the foreseeable future, do not allow Beijing or any partner to make wide-scale investments.

Footnotes

Declaration of conflicting interests

The author declared no potential conflicts of interest with respect to the research, authorship and/or publication of this article.

Funding

The author disclosed receipt of the following financial support for the research, authorship and/or publication of this article: This research received no specific grant from any funding agency in the public, commercial, or not-for-profit sectors.

Notes

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