Courtesy of the Diplomat, an interesting article on China’s interest in Yemen:

With much to gain from a growing presence in the Middle East, Beijing is making an all-out effort to strengthen its foothold there, including the most volatile countries of the region. Although not widely reported, China-Yemen relations exemplify this trend.

China’s diplomatic ties with Yemen, a country that ousted its leader Ali Abdullah Saleh in 2012 during the Arab Spring, started in September 24, 1956. Despite an ongoing al Qaeda-linked insurgency, widespread poverty, and severe water shortages, the relationship between the two countries has grown rapidly over the past years.

The oil business has unquestionably been the primary axis around which Beijing-Sana’a relations revolve. Although Yemen has fewer petroleum resources than its neighbors, China’s growing energy needs are raising the profile and importance of all petroleum producers, including marginal producers such as Yemen. This is perhaps the main reason Chinese companies continue to expand their operations in Yemen, in spite of growing insecurity and other issues facing the country. Over the past few years, there have been several oil exploration and production agreements between the two countries. Since 2005, Chinese state owned enterprise Sinopec Corp has been operating in Yemen’s exploration and production sectors. Today, along with another Chinese company Sinochem Corp, Sinopec has a combined equity production of approximately 20,000 barrels per day, eight percent of Yemen’s total production.

For the Chinese, Yemen offers a way to access untapped consumer markets for its exports, as well as lucrative investments. The government in Beijing has been encouraging Chinese companies to start investing in Yemen. Chinese telecommunications giant Huawei has been operating in Yemen since 1999. The two countries have also established several cooperative projects, such as the Chinese-Yemeni steel company Star.

Interestingly, China’s economic footprint in Yemen is most pronounced in the development and construction sectors. Historically, China was one of the earliest foreign countries to participate in Yemen’s development projects. As early as the 1950s, Beijing took part in the construction of a 266 km road between Sana’a and Hodeidah. This involvement has continued, and in 2012 China National Corporation for Overseas Economic Cooperation (CCOEC) agreed to develop three natural gas-fired power plants in the country. In addition, China recently agreed to help build four 5,000 megawatt power plants using coal and diesel in the cities of Belhaf and Ma’abar. According to the agreement, the Chinese were also responsible for the installation of power cables and Safeer-Ma’abar gas pipeline. Last year, Beijing was also selected in a $508 million project to expand two container ports in Aden and Mokha, in which China reportedly agreed to also provide a soft loan to finance the projects.

To strengthen its foothold, the Chinese have also been generous in other offers to their Yemeni counterparts. In 2009 for instance, China provided relief aid of 5 million yuan to displaced Yemenis who fled the fighting between the government army and Houthi rebels in Saada province. The government in Beijing also donated $5 million in medical supplies to the Yemeni-Chinese Friendship Hospital, a collaborative project that was initiated before the regime change in 2012. Besides an earlier deal to allocate 50 million yuan to promote its economic and technical partnership with Yemen, late last year China also decided to offer a $8 million grant to Yemen’s defense ministry, along with a $16.4 million general purpose grant, and a $30 million long-term interest-free loan.

There are other factors besides the economy and energy which led to China’s growing interests in Yemen. For Beijing, Yemen’s strategic position provides it with an opportunity to implement one of its larger ambitions: to project power in the Horn of Africa. Beijing’s growing connection with Khartoum and Nairobi are a crucial part of this strategy.

Meanwhile, as Chris Zambelis argued, Yemen’s position on the southwestern side of the Arabian Peninsula, and near the Suez Canal, appeals to politicians and policymakers in Beijing. As is manifest by the Chinese presence in the Panama Canal and Egypt’s Suez Canal, “the Chinese place a premium on strengthening footholds in or near strategic communication and commercial chokepoints across the world. Yemen’s position fits this larger pattern of Chinese strategic thinking.”

Taking into consideration these factors, Yemen will remain an important partner for China in the coming years. At a time in which the West has been reluctant to develop ties with this vulnerable nation, Beijing will continue to harness the momentum of bilateral relations to bolster its position in the region. This direction was signaled by Xi Jinping during Yemeni President Abd-Rabbu Mansour Hadi’s diplomatic visit to Beijing last year, in which the two leaders vowed to take their ties to a new level. Both countries’ military leaders have also stated that this relationship might expand into military cooperation.