Breakingviews – Middle East pivot to Asia is strategic this time – Reuters

Breakingviews – Middle East pivot to Asia is strategic this time – Reuters

SINGAPORE, March 14 (Reuters Breakingviews) - For a sign of the new business times, look no further than China’s success in brokering a pledge between Saudi Arabia and Iran to restore diplomatic ties. It’s a huge political win for Beijing. For bankers, it’s another sign that their next big opportunity stems from a deeper Asia-Middle East embrace.

Xi Jinping has brokered a deal the United States would have found hard to secure, despite its traditional military influence in the Middle East. China's president did so on the same day he officially secured a third term, and in the same week the People’s Republic paved the way for a $2.9 billion International Monetary Fund bailout for Sri Lanka by committing to reorganise the island’s debt. Both developments are constructive for global stability and suggest China can be a responsible big power.

The Middle East has trained its financial sights on Asia before. In 2014 the Qatar Investment Authority said it would invest up to $20 billion in Asia within five years. That failed to flourish much further as a scandal at Malaysia’s sovereign fund, 1MDB, was linked back to its peers and financial institutions in the Gulf.