On April 6, the foreign ministers of Iran and Saudi Arabia met in Beijing for the signing of a joint statement agreeing to reopen their embassies seven years after severing diplomatic ties. The meeting followed a surprise announcement in March to restore relations after rounds of secret Chinese-brokered negotiations. If successfully implemented, the deal would also end Iran’s arms transfers to the Houthi rebels, uphold an April 2022 cease-fire in Yemen, and set in place a new regional security framework between Iran and GCC member states—all overseen by China. After decades of calling the shots in the Middle East, the US might now be finding itself on the sidelines of a new regional order. And it should be worried.

Biden administration officials welcomed the agreement while trying to assuage concerns that China’s diplomatic win would “supplant” America’s own influence in the region. Yet, the US hasn’t exactly had a positive track record in the Middle East, long favoring military interventionist approaches that have mostly ended in chaotic blowback. And what was once hailed as the paragon of successful US diplomacy in the region—the 2015 Joint Comprehensive Plan of Action (JCPOA)—has only brought Iran closer to its nuclear threshold. A poor repertoire coupled with a US initiative to pivot away from the Middle East has incentivized regional allies to seek security assurances elsewhere, particularly in Asia. China’s mediation of an Iran-Saudi rapprochement has not only helped Beijing establish itself as a reliable actor in regional conflict resolution, but also signals its growing influence against the US in their strategic competition for global supremacy.

Unlike the United States—which has an ongoing, albeit weakening, alliance with the Saudis—China’s no-alliance flexibility has enabled it to broker a deal that recognizes both Iranian and Saudi interests. Indeed, normalized relations between two contesting powers has the potential to accelerate a process the US has been actively trying to prevent: deepening ties between Iran and the Arab world. For Saudi Arabia, ensuring the successful implementation of its ambitious “Vision 2030” plan means diversifying its network of international partners and maintaining peaceful relations with its neighbors. For Iran, China’s increased role in the region undermines US-led efforts to isolate the regime, whether through a sanctions policy that has crippled its economy or through Arab-Israeli cooperation agreements. China, too, has its own interests in peace in the Middle East—over 50 percent of its oil is imported from the region, and both Iran and the Gulf states have played crucial roles in expanding Beijing’s Belt and Road Initiative.

Iran and Saudi Arabia have deep-seated ideological differences and there are no guarantees that either side will live up to its end of the bargain. Nevertheless, striking a peace deal has positioned China as a formidable challenge to US-led regional order. And if we don’t take seriously the threat to democratic interests and values that Chinese dominance in the Middle East poses, we risk losing the whole game.

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