China buys power in the Middle East with new Iraq pact

China has an unusual new ally to protect its interests in the Middle East.

“We are at their service,” said Abu Firqan, a leader of Iraq’s most powerful Shia militia in its most notorious heartland, the working-class neighbourhood of Sadr City, Baghdad.

Abu Firqan fought the West for years and boasts that his son was the first Shia volunteer to be killed by American troops, in 2004. Now he says he is more concerned about schools and hospitals and wants China to build them.

“We are ready to protect the Chinese not only in Sadr City, but across Iraq,” he said at his home, a rundown concrete compound.

His proposed alliance is not as fantastical as it might seem. Mustafa al-Kadhimi, 55, Iraq’s prime minister, is promoting an economic alliance with China and has announced investments which, if fulfilled, will transform the lives of hundreds of thousands of Iraqis.

But whether Sadr City can be turned into the new Shanghai that Abu Firqan envisages is debatable. The plans are vague, and economists, pointing to the mixed results of President Xi’s Belt and Road initiative, say Kadhimi’s announcements are more a public-relations fig leaf to sweeten popular acceptance of the deeply corrupt political establishment’s growing ties with Chinese oil companies.

Kadhimi’s office said in December, to much fanfare, that contracts had been awarded to 15 Chinese companies for the construction of 1,000 schools across the country. That followed a similar deal earlier in the year for Chinese companies to build 1,000 new clinics, as well as an airport in the southern city of Nasiriyah.

There was also talk of the redevelopment of Sadr City; hence Abu Firqan’s excitement. That plan would involve the building of 90,000 homes.

There have been local attempts to improve roads and other infrastructure, for which Abu Firqan’s men provided “security”, but like much of Baghdad the area remains poor.

Iraq will pay in oil, Kadhimi said, but there is a strong charitable element, according to the Global Times, a Chinese Communist Party newspaper. “China’s investment is out of humanitarian aid,” it quoted Chen Xianzhong, a Chinese businessman working in Iraq, as saying. “Security expenses are huge amid lingering political instability, and the profits for Chinese state-owned companies are slim.”

Moqtada al-Sadr, head of the Sadrist movement, is leading negotiations. He was once America’s chief public enemy in Iraq, fighting US and British troops in the years after 2003 invasion. Sadr City was his stronghold.

Originally known as Revolution City, then Saddam City, it was renamed in honour of Sadr’s father, a religious leader murdered by Saddam Hussein’s death squads in 1999.

Now Sadr, 47, claims to be opposed to Iran as much as to the US, and this “third way” leads to China, which is increasing its investments across the Middle East.

It is driven by its need for oil, and by another key strategy: portraying itself as a trading hegemon rather than a military one. China imports 30 per cent of Iraq’s oil and, as western companies such as Exxon Mobil withdraw, its own oil companies are moving in.

BP announced last year that it would introduce the state-owned PetroChina as a joint venture partner in drilling the Rumaila oilfield in southern Iraq, one of the world’s largest. For Iraqis uninterested in geopolitics but facing electricity and water shortages, any new investment is welcome.

Activists elsewhere protest against China’s treatment of its Muslim Uighur minority; in Baghdad there are protests demanding closer links with Beijing, stressing its historic ties with the Arab world along the Silk Road.

“We want China to build electricity plants, roads, hospitals in Iraq,” said Hussein Barood, 52, as he stood holding placards with the Iraqi and Chinese flags next to the River Tigris last week.

Previous proposals to redevelop Sadr City have come to nothing. A British company drafted a $10 billion design a decade ago to turn it into a mini-Dubai; an Iranian firm promised to build schools. The plots are still vacant.

Some economists suspect the Chinese proposals will go the same way, but Abu Firqan remains resolutely optimistic. “This will be a gift from the Chinese government,” he said. “I’m very happy.”