Dependence Without Influence: Institutional Embedding and the Limits of Economic Statecraft in China’s Middle East Engagement

Why does Chinese economic engagement produce deep institutional embedding in Saudi Arabia but transactional extraction in Iran, despite comparable authoritarian governance, hydrocarbon dependence, and Belt and Road Initiative participation? This puzzle exposes a flaw shared by two theoretical traditions. Economic statecraft scholarship predicts that asymmetric dependence generates leverage, making Iran the more susceptible case. Relational power theory acknowledges that reception shapes outcomes but leaves the domestic mechanisms governing reception unspecified. Neither anticipates the empirical record. This article argues that embedding is mediated by two recipient-side mechanisms: state institutional capacity, the bureaucratic ability to coordinate implementation and routinize foreign inputs into governance practice, and geopolitical autonomy, the structural freedom to negotiate terms serving developmental objectives. Their interaction generates strategic absorption in Saudi Arabia and constrained extraction in Iran. The resulting dependence inversion paradox, whereby vulnerability and institutional influence point in opposite directions, simultaneously challenges materialist assumptions in economic statecraft and supplies the microfoundations that relational power theory has long required but never provided.