China gains diplomatic foothold in southern Iraq
Why has China opened a new consulate in the city of Basra?
Since its inception 10 years ago, China’s Belt and Road Initiative (BRI) has seen a rapid rise in Chinese funded infrastructure projects around the world. An element of this initiative that has garnered less attention, however, is China’s growing diplomatic network through the opening of consulates. Indeed, over the past 10 years, China has opened nearly two dozen consulates. The purpose of this article is to discuss China’s newly opened consulate in Basra in southern Iraq, which was opened on 16 Oct 2023, within the context of China’s interests in the region.
Basra is the economic capital of Iraq, with the surrounding area producing the vast majority of Iraq’s oil. The city is also situated near Iraq’s coast, close to the port city Umm Qasr and the Grand Faw Port, which is currently under construction. The opening of a consulate in Basra is a reflection of the strategic significance of southern Iraq to China.
According to the Vienna Convention on Consular Relations, consulates perform a variety of different functions, including (but not limited to): protecting the sending state’s interests, assisting its citizens and enterprises, furthering the development of bilateral relations, issuing passports, and acting as a notary1 .
In many countries, China’s consulates are primarily situated to provide practical assistance to Chinese citizens working or studying abroad. For example, there are over half a million people from China currently residing in Australia2. It is not surprising, therefore, that China has a consulate in nearly every state capital in the country.
Other consulates are positioned in areas of strategic importance to ensure that China’s interests are protected through the cultivation of relationships with local elites. These consulates are primarily concerned with promoting and protecting Chinese political, commercial, and security interests.
China’s primary interests in southern Iraq relate to oil. Indeed, Iraq has in recent years been one of the main beneficiaries of BRI-related finance and investment directed at fossil fuel projects3. Basra Province reportedly produces 70 percent of Iraq’s oil4, most of which is exported via the Persian Gulf. According to data reported to UN Comtrade, Iraq is the third largest supplier of crude oil to China, behind only Saudi Arabia and Russia5.
Over the past 10 years, once again according to data reported to UN Comtrade, the amount of crude oil sent from Iraq to China has more than doubled in volume. Only exports to India have kept pace. Currently, China and India account for the majority of Iraq’s crude oil exports.
Data: UN Comtrade, HS code 2709 “Petroleum oils and oils obtained from bituminous minerals; crude”; Graphic: China Diplomatic Digest
Chinese companies have also become increasingly important to Iraq’s oil sector. According to Iraq Oil Report, “[m]ore than half of Iraq's oil production comes from fields where Chinese companies are operators or non-operating partners”6.
In 2019, China and Iraq struck an “oil for construction” deal, with Iraq agreeing to supply 100,000 barrels a day as payment for construction projects7, like the Nasiriyah International Airport8. With many other infrastructure projects currently planned or under construction, an increasing amount of Chinese construction companies and engineering firms have begun operating in southern Iraq.
Basra is also at the centre of two major infrastructure projects: the Grand Faw Port and the Türkiye-Iraq Development Road Project.
The Grand Faw Port is a major port currently under construction on Iraq’s southern coast. Once fully complete, it will be the largest port in the Middle East9. The project has been projected to cost $7bn and is intended to make Iraq a transit hub linking Europe and Asia, largely thanks to the planned Türkiye-Iraq Development Road10.
The so-called Development Road is a mega project that will link Iraq’s Grand Faw Port with neighbouring Türkiye via 1200km worth of rail and road infrastructure. It has been projected that the project will cost up to $17bn11. Iraq has indicated an interest in making the project part of the Belt and Road Initiative and hopes that China will help fund the project12.
In addition to these mega projects, it has recently been announced that a long planned 32km railway line between Basra and the Iranian border town of Shalamcheh has begun construction13. The significance of this railway should not go understated as it will be the only cross-border railway between Iran and Iraq, thus facilitating regional trade and linking Basra into existing Belt and Road lines through Iran14.
These infrastructure projects are set to transform Basra into a regional trade hub, making it a major trade link between Asia and Europe and a key location for the Belt and Road Initiative. With the opening of this consulate, China is both well-positioned to take full advantage of Basra’s growing importance.
Map of Iraq showing which governorates are covered by China’s Consulate-General in Basra
Original image: GAZIANTEP2012 via Wikimedia Commons CC0 1.0. Recolouring and other edits: China Diplomatic Digest
On 16 October 2023, China’s Consulate-General in Basra was officially opened. It will be responsible for the following governates: Al-Najaf, Al-Qadisiyah, Al-Muthana, Al-Basrah, Dhi Qar, and Maysan15. No Consul General has been appointed just yet, however an announcement should be made in the coming months.
The advantage of opening a consulate in Basra is that China’s diplomats will be able to more effectively foster relationships with local government and other stakeholders, ensuring that Chinese interests in the region are well-represented. In addition, with the growing number of Chinese enterprises operating in southern Iraq, the consulate in Basra will be able to ensure that these companies have the support that they need to operate effectively.
China is helped by the fact that political conditions in Iraq are currently fairly favourable, with China receiving support from Iraqi politicians and grassroot activists. Iraq’s current Prime Minister, Muhammad Shia al-Sudani, has been much more enthusiastic about embracing ties with China16 than his predecessor, whose administration had been wary of China’s growing influence17 in Iraq’s energy sector.
In addition to this, a pro-Belt and Road non-partisan parliamentary group of 100 Iraqi MPs was formed earlier this year with the goal of advocating for a "strategic comprehensive cooperation agreement" with China18. On the grassroots level, China has also received support from a group known as the “Popular Movement for the Silk Road”, which has been holding rallies in support of closer relations with China19.
It is therefore highly likely that China will seek to capitalise on this political momentum and expand on its presence in Iraq through more BRI-related projects. In order to make full use of its new consulate in Basra, however, China will need to first appoint an effective Consul General with experience working in the region and do so without delay.
References
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UN Comtrade, HS code: 2709 “Petroleum oils and oils obtained from bituminous minerals; crude”, Reporters: “China”, Partners: “All”, Trade flows: “Import”
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https://web.archive.org/web/20230626230715/https://twitter.com/HusseinAskary/status/1654884290855936003
https://web.archive.org/web/20230921073156/https://www.iraqoilreport.com/news/china-positioned-to-thrive-under-iraqs-new-government-45274/