In the Competition over Syria's Reconstruction, China Is the Likely Winner

President Xi Jinping’s efforts to build a latter-day Silk Road have hit a roadblock: Syria’s seven-year civil war, which obstructs the crossroads to Eurasia, Africa, and the Middle East. So Beijing is vying to take the lead in rebuilding the war-torn country, even before the conflict has ceased.

In this, Xi is pushing against an open door. The Syrian government is determined to move ahead with rebuilding — in part to ensure its post-war sway over the battered country — but it needs international help with the estimated $250 billion price tag. As things stand, reconstruction will get little aid from the countries of the “Friends of Syria” coalition—notably the United States, Canada, and Britain—which have frozen $9.6 billion in pledged funding until a political transition “away from Assad” is on track. In the U.S., the proposed “No Assistance for Assad Act” would effectively prohibit financial assistance for reconstruction in areas under the control of the Syrian government.

This leaves the field open for non-Western investors, and indeed, last August’s Damascus Fair — the first held since war broke out in 2011 — attracted Chinese, Russian, and Iranian investors and businesses to explore projects and investment opportunities. The latter two countries are the Assad government’s largest supporters — Russia has spent nearly $4 billion on the war, while estimates of Iranian support run from $6 billion to $35 billion —but this very expenditure limits their ability to invest in reconstruction anytime soon.

With competition thus limited, China is poised to win substantial contracts and to expand its economic influence westward.

Beijing’s relatively impartial role in the conflict gives it a propitious opportunity to dominate reconstruction while maintaining a foot in negotiations over the political process. Since the beginning of the conflict, China has consistently vetoed Security Council resolutions targeting Assad, insisting that Syria must shape its own political future. For this support—and, reportedly, military assistance—the Assad government has openly welcomed Chinese investment and trade.

» Get the best international military business news each week in the Global Business Brief from Marcus Weisgerber. Sign up here.

Over the past year, Chinese-Syrian negotiations over trade and investment expanded from early diplomatic exchanges to commitments of nearly $2 billion in reconstruction contracts. China has become Syria’s largest trade partner, snapping up 80 percent of its exports. In April, a Chinese delegation of investors led by Qin Yong of the Chinese Arab Exchange Association visited Homs and Damascus to meet with senior ministers and leaders—the Investment department in the Prime Minister’s office, governor of Homs, President of the Syrian Central Bank, and the ministers of public works, economy and trade, and communications and technology. Their first visit stimulated conversations with potential Syrian partners, enabled Chinese investors to scout opportunities, and spawned two follow-on expeditions. These delegations paved the way for July’s “Syria Reconstruction Project Symposium,” hosted by the Syrian Embassy in Beijing and the Chinese-Arab Exchange Association. The event, which sought to foster 150 enterprises for a joint Syria industrial zone, drew about 1,000 Chinese investment and development firms. “Only China can play a leading role in helping Syria realize its reconstruction, ” Syria’s ambassador to Beijing, Imad Moustapha, told Chinese investors. Two months later, he told China’s Global Times that Chinese businesses and companies would receive priority in the reconstruction.

What’s in it for China?

Syria is a geostrategic asset to China, rather than an economic one. Its resources, natural gas, and oil, are dwarfed by those of its regional neighbors in the Gulf, Iran, and Iraq, in whom China has already invested an estimated $29.5 billion in 2016. But Syria sits at the crossroads of branches of China’s Silk Road initiative, and provides the most direct land route to China’s energy and resource investments in the Gulf and Africa. Because of these past and potential investments, Beijing also has an economic interest in stabilizing Syria and the region — and possibly in military and counter-terrorism partnerships with Damascus, Tehran, and Moscow.

But Beijing’s interests in tamping down terrorism is not just economic. Syria’s conflicted northwest region provides safe haven for some 5,000 Chinese (Uygher) nationals who are fighting alongside radical groups — and who may cause further instability in the Muslim-dominated Xinjiang province. China may launch reconstruction efforts in northwest Syria to shrink the sanctuary available to these groups. However, this will be challenging since the Syrian government is responsible for a significant proportion of the destruction and neglect that produced these communities.

China believe Assad and his backers in Russian and Iran are the best partners for accomplishing its strategic priorities in Syria: fighting terrorism and preventing a westward-learning or Islamist government from rising to power. China is drawing itself into an extensive East-West power struggle—Russia and Iran against the United States and Europe—for political, economic, and military influence in Syria and the broader Middle East. The West’s insistence on a political transition that does not include Assad and fears of growing Iranian influence will result in an extended military presence (and potential buildup) north of the Euphrates to counter Russian, Syrian, and Iranian forces. China’s grand entrance to Syria involvement would give Assad the advantage of developing territory under his control more quickly while the periphery is left in ruins. The United States and the anti-Assad coalition would likely be responsible for developing the remaining areas, many of which were recaptured from the so-called Islamic State.

China’s engagement in Syria is expanding an already messy proxy war for control of post-conflict Syria. While China maintains that it acts impartially in Syria, their investment in rebuilding Syria only bolsters the Assad government and heightens international competition over Syria’s future. Such a move could result in the de-facto partition of Syria and return Syria to its pre-war unevenly- developed status—a rich, powerful Damascus and a poor, weak periphery.

China and the United States could take steps to prevent Syria from sliding backwards economically and preventing Syria from unbalanced development. First, China and the United States can work together to pressure state actors in Syria and their partners to bring the opposition and the government to the table. Russia’s attempts to solve Syria diplomatically via the Astana Process have not produced a meaningful path toward a political transition. Both China and the U.S. can leverage reconstruction assistance as a tool for jumpstarting talks between both parties. This would remove Russian autonomy over the peace process. Second, China and the United States can convene multitrack dialogues on development in Syria with various stakeholders to ensure reconstruction is consistent across the country.

China could be the hope for rebuilding Syria. But with Assad in power, the chance of renewed violence is just below the surface. Until a political settlement is reached, Syria remains a battle ground for regional dominance with China, Russia, Iran, the United States, Turkey, and the Gulf all fighting for a chunk. But China’s assistance could tip the scale toward Assad.