The International Politics of the Persian Gulf

10. China, India, and the Persian Gulf: Converging Interests?

207 China, India, and the Persian Gulf Converging Interests? N . J a n a r d h a n China and India, two modern states derived from great ancient civilizations with different postcolonial development models, different social and political setups , and most important, different economies, together account for more than a third of the world’s population. Both countries not only have consolidated their power in Asia, but are also making their presences felt on the global stage.1 China and India have a legacy of trade ties with the Persian Gulf countries dating back to the days of the Silk Road, when silk and spices were moved across the desert in caravans or shipped across the Indian Ocean in traditional boats called dhows. The discovery of oil and the ensuing economic boom led the Persian Gulf countries to shift their economic attentions to the United States and Europe, leading to a decline in interest in traditional trade with their Asian neighbors. While ties with China disintegrated following the shift to modern economy, India remained engaged with the region because of business interests, as well as historical ties, geographic proximity, people-to-people contact, and cultural affinity. These and the presence of the Indian expatriate community, which grew consistently over decades and contributed immensely to the development of the countries in the region, ensured India’s continued relevance vis-à-vis the Persian Gulf. China’s recent reentry into the region and India’s recent renewed consolidation of ties with the GCC occurred as the rising stock of both countries coincided with the Gulf countries’ recognition of the significance of Asia as an important economic ally. This reentry occurred at a time when Persian Gulf economies 208 | N. Janardhan were benefiting from unprecedented jumps in oil prices, until late 2008, and were looking for new avenues to invest and diversify. At the same time, Asia’s oil consumption grew rapidly amid an economic boom that has been only marginally affected by the global slowdown, compelling a strengthening of ties with the GCC countries. Rooted in the relevant economic dynamics, this chapter explores the future course of the relationship between the Persian Gulf countries—especially the bilateral ties between each of the six Gulf Cooperation Council (GCC) countries —and India and China. Iran also figures prominently in the following analysis because all these countries interact with the Islamic Republic to varying degrees, and the status of this relationship affects the course each one adopts in relation to the others in the long run. Two premises are fundamental to this chapter. First, the GCC states have adopted a “Look East” policy. This policy has so far been anchored in commercial and economic ties. However, whether the new policy orientation will address security arrangements other than those that have historically characterized the Persian Gulf region remains, for now at least, unclear. That leads to a second premise: despite extensive and growing commercial linkages, the GCC states will take India and China serious as strategic partners only if the linkages between them move beyond trade. In looking at the variety of forces that condition Indian and Chinese roles in the Persian Gulf region, the chapter will also explore some of the more important dynamics external to GCC-Asia relations, chief among them Iran-GCC ties, US-Iran ties, the US approach towards China and India, Iran’s relations with China and India, and bilateral ties between the United States on the one side and India and China on the other. Look East Policy An exploration of these dynamics starts with an identification of the reasons for the revival of relations between the GCC countries and Asia in general and India and China in particular. This GCC-Asia relationship received renewed attention following the visits of King Abdullah bin Abd al-‘Aziz and Crown Prince Sultan bin Abd al-‘Aziz of Saudi Arabia to several Asian countries, including India and China, immediately after assuming their new positions in early 2006. Thereafter, China, India, and the Gulf | 209 leaders from both GCC and Asian countries have continued to undertake reciprocal visits, lending momentum to the newfound relationship. A growing number of Asian countries, among them China, South Korea, Singapore, and India, already exert influence in the political, economic, and military spheres. Demographically, Asia represents about half the world’s population and hosts more than 70 percent of the world’s Muslims, which adds to the...