The China-brokered deal between Iran and Saudi Arabia has shuffled the deck in the Middle East, cutting the US out of the pot.

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Over the weekend, in a surprising development to most Middle East watchers, China brokered a deal between Iran and Saudi Arabia to restore some bilateral ties between the Islamic powers after seven years without them. The agreement was a very basic one, with the two countries agreeing in principle to exchange ambassadors within two months, reactivating a security cooperation agreement, and restoring some economic and cultural exchanges. This is the first formal rapprochement between the Islamic Republic and the Kingdom since 2016, when the Saudis executed a prominent Shia cleric, sparking violent protests at its embassy in Tehran and precipitating the break in relations. Since that split, the underlying conflict between the two states on either side of the Persian Gulf has rapidly escalated, with Iran taking the aggressive lead. Its proxies in Yemen, the Houthis, have attacked Riyadh directly, while Iran itself has launched cruise missiles at Saudi energy infrastructure, crippling a major refinery for weeks back in 2019.

Given this recent history, the fact that any kind of deal was struck shows that key changes are occurring in Middle Eastern politics. The agreement, basic as it was, did not force Iran to cease its aid of international terrorists or non-state proxies, even those which target the Kingdom; this was a conciliatory move on behalf of the Saudis towards the Iranians. This step towards normalization of relations without addressing some of the proverbial elephants in the room – the malign regional activities of Iran, the Shia-Sunni dispute, relations with Israel – fits well within the Chinese diplomatic playbook, as does the language of the agreement. In the text, both Iran and Saudi Arabia agree to the principles of “respect for the sovereignty of states and noninterference in their internal affairs,” a classic Chinese formulation that Beijing uses to ignore human rights abuses abroad and gloss over its own at home. There are a wide variety of implications and impacts from this diplomatic coup for China, both in the Middle East region and further afield.

Regionally, this step towards Saudi-Iranian détente may herald a larger geopolitical shift towards peace in the Middle East, or it may be a mere speedbump on the road to conflict. The eventual result of this deal remains unresolved, but it does show a baseline willingness to engage in diplomacy and seek some semblance of mutual de-escalation. Still, we can glean several takeaways from this accord and assess its basic impact on the security architecture of the region.

For Iran, this deal is a godsend. The Islamic Republic has been dealing with a serious, ongoing protest movement against its theocratic authoritarianism – the most significant anti-regime protests in the country since the ill-fated Green Movement in 2009. It has also been stung economically by American sanctions which, although lessened under the Biden administration, are still biting. These headwinds have been temporarily abated through this agreement, as Iran is really the big regional winner thus far. The formulation of the accord puts very little in terms of responsibility on either party, which benefits Iran as the more aggressive actor. The idea of “noninterference in internal affairs” means that the Kingdom cannot support Iranian protesters, but Iran can continue to fund anti-Saudi proxies across the Middle East. These benefits are supplemented by even closer ties with China, both in economic and security terms.

If Iran gets so many pros with basically no cons, why would the Saudis agree to the deal in the first place? Despite its pro-Iranian bent, the deal aids the Kingdom in its quest to modernize and diversify – economically and strategically. Saudi Arabia, led by the iconoclastic Crown Prince Mohammed bin Salman, is driven to change its image as a petrostate and grow new industries (and cities) as part of its development strategy, Vision 2030. This vast alteration in the nature of the economy and society is not inexpensive, and fighting off attacks from Iranian proxies like the Houthis in Yemen saps a great deal of wealth. Attempting to freeze those conflicts makes good economic sense, especially when the Kingdom’s traditional ally – the United States – is increasingly hostile to it. The Biden administration has consistently denigrated the Saudi regime while conciliating the Iranians, a continuation of the Obama policy. Reducing tensions with Iran and increasing its positive ties with China allow the Saudis to diversify their international relationships as a hedge against future American attitudes.

Another regional impact of the agreement comes in Israel, where it was a shock to the political system during a time of intense internal turmoil. While Israeli politics is riven with dissent over a controversial judicial reform, the regional security landscape is rapidly shifting. Israel had, with the help of the US, achieved great diplomatic success with the Abraham Accords, reaching normalization deals with several Middle Eastern and North African nations. Many hoped that Saudi Arabia would be next on that list, especially as the covert cooperation between the two countries had been frequent. The agreement with Iran puts a damper on those plans, but it does not end the potential for Israel-Saudi accords in the future. As the deal with Iran is so limited, Saudi Arabia could still participate in a regional security pact against Iranian aggression, which targets both the Jewish and Arab states. That joint action would be facilitated by American involvement, but given the Biden administration’s negative outlook on both the Saudis and Israelis, this aid is unlikely to come. Israel may not be an outright loser of this deal, but it certainly isn’t a winner.

Besides the regional implications, this agreement has far broader geopolitical consequences. In the deal between Iran and Saudi Arabia, America came out the big loser and China (and to a lesser extent, Russia) won. The agreement shows China to be a true competitor across various foreign policy domains, from aid and development to diplomacy. This is not China’s first foray into global deal-making, as it proposed a fairly pro-Russian ‘peace deal’ to end the war in Ukraine just a few weeks ago. This diplomatic effort is just one part of a broader Chinese government strategy to extend its global influence through foreign outreach and policy.

China has increasingly focused overseas since the rise of Xi Jinping, asserting itself as a great power and geostrategic heavyweight. It has not only talked the talk, but has walked the walk. China has created or expanded several important programs and organizations for power projection and diplomatic engagement over the past few years. The Shanghai Cooperation Organization, Beijing’s initial attempt at a homegrown security architecture, has been around since 2001 and has acted as a prototype for China’s later and more concerning versions. In just the past month, the CCP announced a vision for what it called the “Global Security Initiative,” with the goal of creating a parallel and opposed security order to that of the Western bloc, based on the principles espoused in the Iran-Saudi deal. This GSI would form a counterpart to the US-led world order, working against it to promote a world of regional spheres of influence safe for authoritarian control. The primary CCP effort in the aid and development realm, traditionally a key bulwark of American soft power (more on that in a bit), is the Belt and Road project, an infrastructure plan which sets its sights on every corner of the map. Projects have been built or agreed across Asia, Latin America, Africa, and Europe – including in both Iran and Saudi Arabia. These are often poorly-constructed, overly environmentally destructive, and come with predatory loans and CCP influence operations.

China has also begun to create military bases abroad, both near and far. It has militarized the South China Sea, uses fishing fleets as cover for military exercises in neighboring countries’ waters, and has based warships in ports built under the Belt and Road umbrella. Further afield, it has sought military basing rights in Argentina, Pakistan, and in Djibouti near the Horn of Africa. These are not randomly-selected locations, but ones where China would be able to exert pressure on key international waterways used for trade and free navigation. Despite all this evidence, some important figures in the West, including the Editorial Board of the New York Times, still believe that China is not at all interested in exporting its governance model or getting involved in areas outside of Asia in anything but a purely economic sense. The Iran-Saudi deal it brokered is part and parcel of this attempt at undermining American influence abroad and asserting Chinese government values and interests in all parts of the world.

As we saw in the Middle East, these attempts have been quite successful, but this has less to do with the competence of the CCP and more to do with the abdication of the United States. China is outcompeting us around the globe, particularly under the non-watchful eye of the Biden administration.

One reason for this is our current approach to foreign affairs and diplomacy, where we push divisive domestic issues into a non-progressive global community. The Biden administration has made it a public policy priority to promote its ‘Diversity, Equity, and Inclusion’ agenda across the government, including in the State Department. These woke cultural ideas are controversial here in the US, and are viewed as utterly absurd by the developing nations we seek to court. Pushing LGBTQ affirmation, celebrating abortion, and racializing everything under the sun may fly in liberal circles in Western Europe and North America, but is anathema to the vast majority of the developing world. China’s culturally-neutral approach, focusing on providing direct economic stimulus via infrastructure creation, is far more appealing. China does this well rhetorically, but fails miserably in follow-through; the window is open for a more hard-nosed American aid program to eat China’s lunch on this front, especially given our technical competence and private sector capacity.

We are unfortunately quite behind the eight-ball when it comes to advancing our diplomacy strictly within our national interests and not twisting it to serve our domestic policy ends. American values – not progressive political projects – should inform our diplomacy, but they cannot define it. Interests are far more important than values in foreign policy; after all, what’s the good of standing for a value if you lose the ability to promote it abroad or even to hold true to it yourself? We are throwing away very important foreign ties with a long-time ally – the Kingdom of Saudi Arabia – in a critical region – the Middle East – over something that is relatively minor. Yes, the murder and dismemberment of the dissident writer (and Qatari propagandist) Jamal Khashoggi was abhorrent and grotesque. No, it should not be the defining issue in our relationship with the Kingdom. That this is even a question is absurd, particularly when viewed in the light of how the Biden team has treated far worse abusers. It has courted Venezuela and Iran, sought improved ties with Cuba, and appeased China – all of which have worse human rights records right now than the Saudis do. This is not a time to be choosy with our partners; we face the greatest threat to the American system since the end of the Cold War.

During that ideological battle, we courted all sorts of allies and partners of convenience, many of which were influenced by our presence into improving their human and democratic rights positions. South Korea is perhaps the best example of this, transforming from a military dictatorship into a vibrant democracy and civil society in less than half a century. Choosing to let our tight relationship with the Saudis lapse over something as relatively minimal as the killing of a single dissident would be a massive dereliction of diplomatic duty. By ceding the field to more authoritarian players like Iran and China, we lose our ability to influence the Kingdom as it modernizes and grows into a true 21^st century power. The Saudis are a youthful nation with a great deal of potential. Continued American influence could lead it into an era of greater prosperity as well as improved social and political rights. Even with a transition away from fossil fuels (if that indeed does happen), Saudi Arabia would remain a linchpin of the region, bordering two major seaborne shipping routes and exerting broad sway over the Sunni Islamic community. We should not throw the baby out with the bathwater here.

China’s ability to close even a basic deal between Iran and Saudi Arabia shows the decline of American interest and prestige in a crucial region of the world, and our response shows even greater regional weakness. Secretary of State Antony Blinken has praised the Chinese for this deal – again, one which primarily promotes Chinese and Iranian interests and diminishes Saudi Arabia’s US ties – saying that it was a “good thing” for the region. President Biden echoed these sentiments as well. These may be nice soundbites, but they are terrible policy. In this case, peace on Iranian (and CCP) terms is worse than the status quo and may be worse in the long-term than actual conflict. Iranian regional supremacy would allow it to spread its terrorist financing further afield, give it a massive increase in wealth it could put to nefarious purposes, disrupt American interests in the Middle East, grant it carte blanche to further repress its people, and directly endanger the very existence of Israel as a Jewish state. Furthermore, the tripartite alliance of China, Iran, and Russia is strengthened by this agreement. None of these are good things for either the region or America.

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The Biden administration is hopelessly out of its depth when it comes to foreign affairs, something it has proven again and again over the past two years. From Afghanistan to China to the Middle East, nearly everything the Biden team has done of its own volition abroad has been very poorly conceived and executed. The administration does not seem to have an understanding of the grave nature of the multipronged threat to American primacy and the world order, and thus cannot possibly work towards solutions or approaches to those thorny dilemmas. It seems to have landed on disengagement as a strategy towards the Middle East, even as it ramps up involvement in other regions. Nature abhors a vacuum, and international relations abhors a power vacuum. As the old adage goes: when the cat’s away, the mice will play. And if the China-brokered Iran-Saudi deal is any indication, the mice are having a grand old time.