What is China doing in Yemen?

Why is China positioning itself as potential diplomatic broker in Yemen?

In May, Yemen’s Houthi rebels signed a memorandum of understanding with China's Anton Oilfield Services Group and the Chinese government to invest in oil exploration in the country. Houthi-affiliated media reported that the deal came after multiple negotiations and coordination with several foreign companies to convince them to invest in the country's underdeveloped oil sector.

Even though Anton Oilfield Services Group later nullified the agreement,* the potential oil exploration deal with the Houthis underscores that Beijing implicitly recognizes the rebels — who have only had formalized diplomatic relations with Iran and Syria up to now — as a governing body in Yemen while still publicly maintaining that the Yemeni government is the country’s legitimate caretaker.

Underscoring Beijing’s growing relationship with the Houthis, one of the group’s political bureau members, Ali Al-Qahoum, praised China, saying it "emerged playing a pivotal role and making agreements that restore calm, peace, and diplomatic relations between the countries of the region." Qahoum is referencing the recent China-brokered Saudi-Iran agreement, which may take credit for the recent diplomatic movement in Yemen between Saudi Arabia and the Houthis.

Surprisingly, the oil exploration deal and growing relations between the Houthis and Saudi was met with no public response from the Houthis' biggest foe — Saudi Arabia. Riyadh’s lack of condemnation indicates that the Kingdom at least tolerates the agreement and Beijing’s relations with the Houthis, especially if the Chinese government could play a pivotal role in ending a war that has cost Riyadh billions of dollars.

But China isn’t just getting involved on the side of the Houthis. Chinese Chargé d'Affairs Zhao Cheng met with Saudi Ambassador to Yemen Mohammed bin Saeed Al Jaber to discuss the latest developments in Yemen and how to reach a political solution. This meeting comes after a series of meetings between Cheng and members of the Presidential Leadership Council (PLC), including PLC Chairman Rashad al Alimi, National Resistance leader Tareq Saleh, and Southern Transitional Council (STC) leader Aidarus al-Zoubaidi.  

While nominally part of the PLC, Beijing has also been working to develop relations with the STC for years. In addition to the meeting with Zoubaidi, China has long maintained open lines of communication with the separatist group. And while China is publicly opposed to the issue of southern independence, it has been able to leverage its relationship with the STC to encourage it to uphold power sharing agreements with the Yemeni government. After the Iran-Saudi agreement, STC officials even praised China for the constructive role it has played in the Middle East.

But why is China trying to forge ties with multiple sides of a war that has garnered little international attention in recent years?

Chinese involvement in Yemen is far from new. Diplomatic relations between Yemen and China stretch back as far as 1956 when Yemen was actually the first country on the Arabian Peninsula to recognize the People’s Republic of China. Since the unification of Yemen in 1990, China has signed agreements to build natural gas power plants in Yemen, expand container ports in Aden and Mokha, and was active in Yemen’s oil production sector. China also began developing contacts with the Houthis as early as 2011.

Beijing’s engagements in Yemen comes against the backdrop of a wholesale increase in its diplomatic activity across the Middle East and Africa, seemingly positioning itself as a non-interventionist alternative to the United States. In order to expand its influence in the region, China has made multiple diplomatic forays, including brokering the recent Saudi-Iran normalization agreement as well as hosting China-Arab States Summits and China-Gulf Cooperation Council Summit. With China maintaining positive relations with all parties in Yemen as well as the war’s backers — Riyadh, Abu Dhabi, and Tehran — the peace process in Yemen could be the latest feather in Beijing’s diplomatic cap.

But while Beijing is surely looking to bolster its diplomatic relations in the region to compete with the United States, there may be more at stake when it comes to its potential involvement in Yemen. Namely, China sees securing access to vital resources and markets as a financial windfall.

Beijing recognizes that after the war ends, Yemen will require millions of dollars-worth of reconstruction and economic development. And by engaging on all sides of the war, it is guaranteeing that no matter the outcome, Chinese firms — like the China Harbor Engineering Company — are in a favorable position to win these lucrative contracts.

Perhaps more importantly, Yemen’s strategic position in the Gulf makes it attractive for Beijing. Much of China’s trade with Europe passes through the Gulf of Aden and Red Sea while Chinese imported oil from Middle East and Africa transits through the Bab el Mandeb and Strait of Hormuz. While China already has access to these strategic waterways, securing access to Yemeni ports could help bolster China’s ambitious Belt and Road Initiative and guarantee entry to global trade routes.

Editor's note: this article has been modified to reflect that the MOU had later been nullified.