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Strategic Interdependence in the Multipolar Era: Gulf States, U.S.-China Competition, and the Reconfiguration of Global Order

Picture of Dr Aamna Khan

Dr Aamna Khan

Analysis Series

Analysis/0060/August/2026/London-Dialogue. 05 August 2026

Author: Aamna Khan

Introduction:

Globalisation’s future has been the subject of considerable discussion due to the growing rivalry between the United States (US) and China. Growing geopolitical tensions, technological restrictions, supply chain reconfiguration, and competing connectivity projects have fuelled predictions of a broken international order led by economic decoupling and emerging bloc politics. This perspective, however, ignores a significant change: interdependence is being strategically reorganised rather than ending. Managing economic ties, diversifying alliances, and turning connectivity into a source of geopolitical power are all goals that states are pursuing increasingly. The Gulf region offers an important perspective for comprehending this new reality. Gulf states, once seen as a site of great-power rivalry shaped by energy resources and external security assurances, are now actively shaping the world economy. Countries like Saudi Arabia, the United Arab Emirates (UAE), and Qatar are pursuing greater strategic autonomy while preserving ties with rival global powers through economic diversification strategies, sovereign wealth investments, infrastructure projects, technological partnerships, and diplomatic initiatives.

China has grown to be an essential economic partner, but the US continues to be the region’s key security partner through military cooperation, defence ties, and strategic commitments. In addition to being one of the Gulf’s biggest trading partners and a significant market for its energy exports, Chinese businesses are becoming more involved in regional infrastructure, telecommunications, and technology initiatives. The gulf governments have adopted a policy of balancing economic engagement with different actors rather than picking between Washington and Beijing.

However, Strategic interdependence, a type of statecraft in which nations actively manage several external relationships to improve autonomy, lessen vulnerabilities, and maximise strategic possibilities, is being practiced by the Gulf states. Strategic interdependence differs from traditional dependency in that it does not rely passively on outside forces. Rather, it involves using technology collaborations, investment flows, and economic networks to bolster state capacities and diplomatic adaptability. The Gulf experience calls into question the idea that growing great-power rivalry necessarily pushes smaller states into exclusive alliances.

The Middle powers can manage geopolitical competition without sacrificing transparency, as evidenced by Saudi Arabia’s growing economic partnership with China and its ongoing security ties with the US, the UAE’s function as a global connectivity hub connecting Asian, Western, and regional markets; and Qatar’s ability to combine energy diplomacy with mediation efforts.

Strategic interdependence provides a helpful framework for understanding the developing multipolar system by examining Gulf policies in energy, infrastructure, technology, and diplomacy. The Gulf case shows that states’ capacity to manage intricate networks of cooperation and competition will likely define the future of globalisation rather than division and fragmentation. In this dynamic setting, regional players are actively influencing the institutions, relationships, and regulations of a shifting global system rather than just reacting to great-power competition.

Beyond Decoupling: The Transformation of Globalisation in a Competitive World Order

In policy discussions, the term “decoupling” has taken centre stage, especially when discussing supply chains, cutting-edge technologies, vital minerals, and important sectors. While China has advanced efforts toward technical self-sufficiency and decreased sensitivity to external pressure, the US has attempted to lessen vulnerabilities related to reliance on Chinese technology and industry. These developments show that geopolitical factors are increasingly influencing economic interactions. However, complete decoupling is still impossible, though. A complete separation of the world’s major economies would be very expensive and challenging due to the extent of global economic interdependence. States are adopting a more strategic and selective type of economic participation known as “de-risking” rather than giving up on globalisation. This strategy aims to preserve wider economic ties while reducing undue reliance in vulnerable industries. Interdependence is transformed into a more controlled and politically contentious process rather than failing.

Traditional globalisation is giving way to what can be called geo-economic competitiveness in this new context. Infrastructure systems, energy markets, economic networks, investment flows, and technology platforms have all evolved into tools of strategic impact. States are competing based on their capacity to dominate and engage in vital economic networks in addition to their military prowess. Therefore, connectivity is now a source of power in and of itself. The way energy markets are evolving illustrates this shift. Hydrocarbons are still essential to the stability of the world economy even though the shift to renewable energy is changing long-term demand trends. Due to their ability to link the world’s largest consumers with major energy providers, Gulf states continue to hold a strategically significant position. Commercial interdependence can grow even amid geopolitical rivalry, as China’s expanding commercial ties with Gulf energy producers show. However, gulf security ties with the US remain important, underscoring the coexistence of several overlapping types of reliance. Similarly, the rivalry for global infrastructure shows that connectivity has become a significant area of geopolitical power. The G7’s Partnership for Global Infrastructure and Investment (PGII), China’s Belt and Road Initiative (BRI), and the India-Middle East-Europe Economic Corridor (IMEC) are examples of initiatives that represent conflicting ideas on the form of global economic networks. Many middle powers are trying to interact with several connection frameworks at once rather than just picking one.

This change presents opportunities as well as challenges for Gulf states. Their long-standing reliance on hydrocarbon exports and assurances of external security has sparked a desire for more strategic and economic independence. The UAE’s economic diversification strategy, Qatar’s National Vision 2030, and Saudi Arabia’s Vision 2030 are examples of national transformation initiatives that aim to turn Gulf nations from resource exporters into international centres for innovation, technology, investment, and logistics.

The Gulf states can now transcend conventional ideas of dependence due to the shifting global environment. Instead of switching out external partners, their goal is to establish a diverse network of connections that will allow them to make more flexible decisions. Gulf states are trying to turn their physical and economic location into a strategic advantage by interacting concurrently with the US, China, Europe, and developing nations like India.

Therefore, the Gulf experience calls into question the idea that great-power rivalry will unavoidably split the international system into conflicting blocs. Rather, it implies the establishment of a more intricate order in which nations manage various interdependencies to gain influence. To understand this process, a new analytical framework is needed that shifts from conventional ideas of alliance politics and dependency to the concept of strategic interdependence.

Strategic Interdependence: A Framework for Middle-Power Statecraft

The ability of states to consciously manage diplomatic, technological, and economic ties to maximise autonomy while remaining integrated into international networks is known as strategic interdependence. Strategic interdependence places more emphasis on agency than classic dependency, where weaker governments have less control over external interactions. Governments use their position within networks to negotiate, diversify, and leverage partnerships. This idea expands on broader discussions of interconnectedness and power dynamics in international politics. Because unequal interactions enable larger players to exert political influence over weaker ones, traditional models frequently see reliance as a vulnerability. However, more intricate kinds of connectivity have been brought about by modern globalisation, and states can occasionally use their economic significance as political leverage. Larger powers’ actions can be influenced by nations that control vital resources, infrastructure, financial assets, or crucial markets.

The idea differs from and draws on several lines of international relations research. According to Keohane and Nye’s theory of complex interdependence, growing institutional and economic linkages may lessen the importance of military power in interstate relations. More recently, the idea of weaponised interdependence proposed by Farrell and Newman illustrated how powerful nations might use international economic and technology networks to impose their will. Further, Blackwill and Harris contend that geoeconomics has emerged as a key tool of statecraft in modern international politics. Building on these insights, this paper advances strategic interdependence to explain how middle powers intentionally diversify and manage their external partnerships to maintain strategic autonomy, lessen vulnerabilities, and boost diplomatic flexibility in the face of escalating great-power competition, rather than to dominate global networks.

This trend is exemplified by the Gulf states. Their position within international economic networks contributes to their impact, in addition to their military prowess and population size. Gulf states have structural power that enables them to interact with several major powers, including energy resources, sovereign wealth funds, important ports, investment capacity, and geographic location. Three interrelated strategies underpin strategic interdependence: partnership diversity, control of strategic assets, and institutional and diplomatic flexibility.

In the evolving multipolar order, the idea of strategic interdependence is especially relevant to understanding intermediate powers. The Gulf experience acts as an example of how regional players might exercise strategic agency through economic connectedness. Strategic interdependence does not, however, imply total neutrality or independence. Geopolitical tensions, economic reliance, and security realities continue to limit Gulf states. Their approach is to manage global power systems more skilfully rather than break free from them. Controlled flexibility aims to maintain enough relationships with other players to prevent over-reliance while reaping the benefits of global economic integration. A larger shift in international politics is reflected in the Gulf’s strategic interdependence.

Gulf States as Architects of Geo-economic Connectivity

Energy, infrastructure, and technology are the three interrelated areas where the Gulf states’ goal of strategic interdependence is most evident. These industries show how Gulf nations are turning long-standing sources of economic reliance into tools of strategic power.

Energy: From Exports of Hydrocarbons to Strategic Alliances

Although energy is still the cornerstone of Gulf geoeconomic power, its strategic importance today goes beyond hydrocarbon exports. With Saudi Arabia continuously ranking among Beijing’s top suppliers, China has emerged as the world’s biggest importer of Gulf crude oil. This partnership has developed into long-term industrial cooperation in addition to trade. In 2023, Saudi Aramco secured long-term crude supply arrangements and purchased a 10 per cent share in Rongsheng Petrochemical, one of China’s biggest private refiners. An example of the transition from transactional energy trading to integrated industrial collaborations is the investment made by Aramco and Chinese partners in the Panjin Integrated Refinery and Petrochemical Complex in Liaoning Province.

In the Liquefied Natural Gas (LNG) industry, Qatar has a similar approach. One of the longest LNG contracts ever negotiated was a 27-year agreement between Qatar Energy and China National Petroleum Corporation (CNPC) in 2023. Soon after, Qatar Energy and Sinopec signed another long-term supply deal that guaranteed steady demand for Qatar’s North Field growth and strengthened China’s position as a crucial market.

It is worth noting that Gulf relations with Washington have not deteriorated because of these changes. Through military collaboration, arms sales, and intelligence sharing, the US continues to be a vital security partner. Rather, Gulf states have shown that economic involvement with China does not always equate to geopolitical realignment by purposefully separating economic diversification from security alignment.

Connectivity and Infrastructure: Conflicting Routes, Complementary Approaches

Another pillar of Gulf geoeconomic statecraft is infrastructure. Gulf states are presenting themselves as essential hubs connecting Asia, Europe, and Africa rather than merely serving as transit hubs. The UAE is the best example of this change. Dubai is currently one of the top maritime and logistical hubs in the world, with DP World managing or operating over 80 ports and logistics facilities on six continents. Regardless of changes in international political alignments, this vast network increases the UAE’s strategic relevance.

The Chinese investment has significantly strengthened Gulf connectivity. By building the CSP Abu Dhabi Terminal and investing in Abu Dhabi’s Khalifa Port, COSCO(China Ocean Shipping Company) Shipping Ports expands trade between China and the Middle East and incorporates Gulf logistics into the Maritime Silk Road. However, competing projects like the India-Middle East-Europe Economic Corridor (IMEC), which was unveiled during the 2023 G20 Summit, have been embraced by Gulf governments. Gulf states demonstrate that competing connectivity initiatives are seen as complementing prospects for economic diversification rather than as mutually incompatible by endorsing both IMEC and BRI-related projects. This concept is part of a larger plan to optimise the advantages of competing infrastructure projects without relying solely on one geopolitical framework.

Technology: Juggling Strategic Competition with Innovation

The latest zone of Gulf strategic interdependence is technology. Gulf governments have looked to collaborate with Chinese and American IT companies as artificial intelligence, cloud computing, and digital infrastructure become increasingly important to economic competitiveness. The UAE’s national AI policy and Saudi Arabia’s Vision 2030 have sparked significant investment in digital transformation. Despite Washington’s worries about network security, Chinese companies like Huawei have taken part in the development of 5G infrastructure throughout the Gulf. Concurrently, Gulf governments have continued to strengthen their collaboration with American technology firms.

Perhaps the best illustration of technical balance may be found in the UAE. Microsoft invested US$1.5 billion in G42, the top artificial intelligence startup in Abu Dhabi, in 2024. To accommodate US security concerns and maintain the UAE’s goal of becoming a worldwide hub for artificial intelligence, G42 reorganised some of its overseas technological collaborations as part of the agreement. Instead of giving up on China, Abu Dhabi modified its alliances to keep access to both Chinese and American innovation ecosystems. These examples demonstrate that Gulf technology strategy is driven by diversification rather than bloc politics. The objective is to reduce vulnerabilities to geopolitical disruptions while securing access to cutting-edge technologies from several partners.

Strategic Interdependence in Action: Handling the Competition Between the United States and China

In response to the growing rivalry between the US and China, the Gulf states have expanded their diplomatic, technological, and economic engagement with Beijing while preserving security relations with Washington through strategic interdependence rather than alignment. Gulf states have divided these partnerships based on national interests rather than seeing them as mutually conflicting.

For instance, Saudi Arabia, through energy, investment, and industrial collaboration under Vision 2030, has strengthened economic connections with China while maintaining considerable defence cooperation with the US. Riyadh’s determination to broaden its diplomatic ties without jeopardising its long-standing security alliance with Washington was further evidenced by the 2023 Saudi-Iran normalisation pact mediated by China.

By mixing oil diplomacy with mediation, Qatar enhances this regional trend. Qatar’s status as a significant non-NATO ally of the US and the presence of Al Udeid Air Base coexist with long-term LNG agreements with Chinese companies like CNPC and Sinopec. Its efforts to mediate disputes in Afghanistan and Gaza provide further evidence of how economic might may bolster diplomatic credibility. These instances highlight a broader shift in global politics. Gulf states are increasingly choosing diverse alliances that maintain strategic flexibility over binary options. According to their experience, influence in a multipolar world comes from the capacity to manage several interdependencies at once rather than from exclusive alliances. Therefore, strategic interdependence provides middle powers looking to increase autonomy while fostering a more cohesive and stable global order with a workable approach.

Conclusion and Policy Implications

The Gulf cases illustrate how growing competition between the United States and China does not always result in geopolitical polarisation. Rather, it emphasises how middle powers can maintain constructive ties with rival countries while maintaining autonomy through strategic interdependence. This implies that controlling interdependence might be a better strategy for policymakers than pursuing exclusive alignment.

The US should consider Gulf diversification a pragmatic response to a growing multipolar system, rather than a halt to long-standing security alliances. A more flexible approach that promotes Gulf economic modernisation while strengthening security cooperation is likely to have a better long-term impact than pressing allies to choose sides.

China’s increased economic engagement must be backed by greater transparency and adherence to international standards in infrastructure, technology, and investment initiatives. This will boost regional partners’ confidence and minimise views that business initiatives are largely geopolitical instruments.

To ensure that growing connectedness does not generate new strategic vulnerabilities, Gulf states must continue to diversify while also implementing better regulatory frameworks, investment screening, and cybersecurity measures.

Finally, the Gulf is no longer just a battleground for major powers, but also a key player in establishing the new global order. Gulf states have proved that by combining economic diversification, connectivity, and diplomatic flexibility, interdependence may be turned into a source of strategic influence. While this method will not abolish great-power rivalry, it does provide a workable model for lowering polarisation and encouraging cooperation in an increasingly multipolar world.

Picture of Dr Aamna Khan

Dr Aamna Khan

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