Neo-Mercantilism in Chinese Foreign Policy; Case Study: The Middle East

Introduction
China’s Belt and Road Initiative (BRI) integrates economic policy and national security. A neo-mercantilist lens reads the state as coordinating capital, firms, and public finance. This narrows strategic vulnerabilities and builds geo-economic influence. The Middle East is central to this strategy. It supplies much of China’s oil and gas, anchoring maritime and overland nodes that shape global flows. The article asks a straightforward question: in practice, how does the BRI help China secure reliable, affordable energy while increasing its economic presence in the region? The aim is to trace the concrete mechanisms—industrial policy, public finance, and diplomacy—that enable this. It shows how these mechanisms operate together instead of in isolation. It also explains what this joint machinery means for the regional order and for debates about the connection between economics and security.
 
Methods
The study is documentary-analytical. It uses peer-reviewed research, official reports, and trend data on trade and energy. All sources are examined through a structured framework. The Chinese state is the unit of analysis. The temporal scope runs from the BRI’s 2013 launch to recent years. The geographic scope covers the Middle East, with relevant links to Eurasia. The framework matches neo-mercantilist indicators to policies. These include state-owned energy enterprises, public finance networks, supplier and route diversification, and coupling security with trade. The analysis checks the evidence against the framework. It uses case studies of corridors and ports, most notably the China–Pakistan Economic Corridor and selected Indian Ocean facilities. It also considers land-bridge rail and road projects. Finally, it examines “infrastructure-for-energy” deals and long-term contracts. The goal is to clarify how financial, industrial, and diplomatic tools work as a single policy package.
 
Findings
One pattern stands out: state-centred instruments matter most. Major state-owned oil and gas firms act as tools of economic statecraft. They finance and build infrastructure, pursue strategic acquisitions, and secure long-term supply. Public finance—policy banks, multilateral funds, and insurance—absorbs risk. It also aligns investment cycles with secure access goals. A second pattern concerns resilience. A multipath sea–land system blends maritime routes with overland corridors and pipelines. This creates redundancy and raises reliability. By investing in ports, storage, and cross-border links, China addresses the “Malacca dilemma.” These measures shorten recovery time after disruptions and cut exposure to chokepoints. A third pattern reveals the two sides of energy security. Expanding suppliers and routes reduces outage risks. Long-term offtake deals and bundled projects smooth price swings and push stable export commitments from partner governments. Case evidence confirms these claims. Most of China’s oil imports still come from the Middle East. The supplier mix shifts as market cycles, sanctions, and diplomacy evolve. High-level summits and cooperation plans expand both partners and projects—these span refineries, petrochemicals, logistics, and storage. The geo-economic–security link has policy consequences in both directions. A wider infrastructure and finance presence brings commercial and positional gains at key nodes. But these gains come with nontrivial risks: host-state instability, terrorism, external competition, and suspicion over China’s aims. China’s response focuses on concrete economic results, mutual benefit rhetoric, and restraint from overt political intervention. This approach contains security costs but maintains commercial engagement. Finally, the BRI supports limited monetary diversification in energy trade. More alternative settlement deals provide modest insulation against financial shocks and reduce reliance on a single currency. This complements the physical diversification of routes and suppliers.
 
Conclusion
In sum, the BRI’s Middle Eastern presence puts a neo-mercantilist strategy into practice. This involves industrial policy, public finance, and diplomacy working together. The aim is to secure affordable, reliable energy and to grow geo-economic influence. The approach works when political risks are managed, transparency increases, and policies adapt to shifts in the energy transition. Conceptually, the framework clarifies how economics and security reinforce each other. In practice, it offers a playbook for governments balancing energy needs, infrastructure, and constraints while avoiding military escalation.