Libya: China’s Economic Diplomacy

While the outcome of the conflict remains uncertain, China maintains its strategic neutrality and moves Libya closer to its economic orbit. Beijing’s agenda remains primarily economic and related to the BRI projects development.

Compared to other players – as Turkey, Russia, and the Emirates – China’s role in Libya has been mostly overlooked. As a matter of fact, Beijing has refrained from participating militarily in the conflict and delivering military hardware provisions. However, its approach – defined as behind-the-scenes diplomacy – reveals the country’s intention to place bets on both political counterparts to ripe economic and political fruits in the post-conflict era and preserve its long-term interests.

Historical Developments

Tripoli and Beijing formally established diplomatic relations in 1978, and under Gadhafi’s regime, economic relations developed steadily: in 2011, 75 Chinese companies were conducting business worth about $20 million; simultaneously, Tripoli provided 3% of China’s oil supplies, one-tenth of Libya’s total crude oil exports.

During the 2011 revolution, China opposed to NATO intervention, abstained from the UN Security Council resolution authorizing airstrikes, and condemned NATO violence as the cause of severe civil losses. In line with its foreign policy approach, Beijing avoided endorsing the Responsibility to Protect (R2P), resorted to its non-interference dogma, and tried to protect its integrity and interests.

In the aftermath of the conflict, bilateral trade decreased by 75%, Chinese projects in the country were frozen, and the population evacuated; however, Beijing maintained ties with both the opposition government, the National Transitional Council (NTC), and Gadhafi’s regime, the future Government of National Accord (GNA). After 2014’s second civil war, Beijing maintained this pragmatic approach, paving the way for China’s cautious economic involvement with both political parties while keeping a neutral political profile. Since 2014, Beijing has shifted from its non-interference doctrine to a non-alignment strategy: the country has officially recognized the GNA while maintaining de-facto economic ties with Haftar’s opposition. After the 2021 elections, which marked the victory of the new Prime Minister Dabaiba, and the President of the Presidential Council Menfi, China welcomed the new government and re-confirmed its efforts to find an international solution to the political conflict, not marking any shift from the hedging strategy adopted insofar.

China’s Strategy

China’s ties with the Middle East and North Africa region (MENA) have grown exponentially in the last few years, and the area is now the second-largest recipient of Belt and Road Initiative (BRI)investments and infrastructural projects worldwide. Moreover, all MENA fifteen countries have either signed a Memorandum of Understanding, a Strategic Partnership, or a Comprehensive Strategic Partnership Agreement with China.

This comprehensive strategy and long-term vision explain Beijing’s approach in Libya: China is playing a “wait and see” game, as it is not interested in the political outcome of the conflict but instead in benefitting of the future relations with the winning political party. This strategy is similar to the one adopted in other countries affected by conflicts - as Iraq, Yemen, and Syria -where China tries to adopt a flexible approach to become an essential player in post-conflict reconstruction, providing stability and development, enhancing trade partnerships, and participate in the country’s possible future infrastructural and energy projects.

Similarly, since the fall of Gadhafi’s regime, China has focused on economic penetration, with cautious and limited political engagement, while enhancing its awareness of local realities. Officially, China backs the GNA, a pivotal and attractive partner in the country, since it is closely tied to the Central Bank of Libya and thus controls all the funds, contracts, and capital. On the other hand, for the Western coalition, China represents a partner for infrastructural development and future country reconstruction. Both parties have been vocal about this relation: in 2018, the GNA participated in the ministerial forum on China-Africa Cooperation (FOCAC) held in China, and the two counterparts signed an agreement committing to work on BRI projects.

Beijing also maintains ties with Haftar’s side; however, this relation is strictly economic, and China refrains from any political mediation effort. This relation primarily serves China’s energy security interests, as the Libyan National Army control most of the country’s oil reserves, and the China National Petroleum Corporation (CNPC) and its subsidiaries are, in fact, increasingly engaging with the east of the country. However, the perimeter of this relation is dictated by LNA’s lack of control of hard currency and incapability of signing international contracts.

Geopolitical Trajectories

At the international level, China supports multilateral solutions, not country-led initiatives – as the ones advanced by Italy, France, and the United Arab Emirates – and it is skeptical of the capability of external stakeholders to contribute to a resolution of the conflict positively.

Within the United Nations framework, China avoids acting as a central player and refrains from direct engagement, leaving the stage to other great powers. Moreover, China has provided no tangible support to either political side: Beijing has refused to meet the demand of the GNA to endorse the lifting of the international arms embargo and the government’s financial assets unfreezing.  Finally, China has delivered no military hardware but rather financial and technological support.

As for other countries involvement in the county, some Chinese analysts have underlined the possibility of future frictions with Turkey: even if both Ankara and Beijing support the GNA, Turkey’s ambition in the area might be problematic for China. China is, in fact, worried that in the future, Ankara might want to ease the US concerns in exchange for Washington’s support in the framework of the tensions with the UAE and Russia. This approach might affect China’s role in the country and the possibility of benefiting from its involvement. As for Moscow, although China and Russia support opposing factions, this factor does not seem to pose a threat to the bilateral relations: while Moscow strives to become an influential actor within the Maghreb’s political trajectories, Beijing’s agenda remains primarily economic and related to the BRI projects development.

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