[Photo/CFP]

The new Libyan flag flies next to the green flag of the recently toppled Gaddafi regime at the Libyan embassy in Beijing.

BEIJING – On Monday this week, a China Daily photographer snapped a picture of the Libyan embassy in Beijing with both the green Libyan flag of the Gadhafi regime and the rebel’s re-purposed flag of the Kingdom of Libya flying side by side.  The iconic green flag was later lowered, with an embassy employee telling Chinese media that “the Gadhafi regime was finished.”

The fall of his reign is a dramatic turn of events for the Chinese government which, in public at least, has been unabashedly against any foreign interference in Libya’s domestic affairs.

Since the start of foreign intervention in Libya, China has steadfastly stuck to its foreign policy of general non-intervention, starting with its abstention on the vote for United Nations Resolution 1973, which authorized a no-fly zone and “all necessary measures” against forces loyal to Gadhafi.

Later, China vigorously condemned the NATO air strikes, which played a critical role in denying Gadhafi’s forces full use of the armor and heavy weapons that effectively slowed rebel advances early on in the campaign.

Reuters

Colonel Gaddafi

Back in China, coverage of the war in state media often played up downsides of the conflict – anarchy, indiscriminate shootings, and civilian casualties – while ignoring the popular support that the rebels enjoyed amongst large swathes of the population.

Quite bravely, Al Jazeera’s Arabic correspondent in China, Ezzat Shahrour eloquently took the Chinese media to task for its coverage, writing at the time, “I just don’t see what the point is of [Chinese] media spending so much money to prepare their journalists to go to a dangerous place like Libya when all these reporters do is simultaneous interpretation in China of Gadhafi’s own television station.” 

While Shahrour wrote of Chinese language media coverage, China’s foreign policy slant was also noticeably obvious in the English language stream: state-run news agency Xinhua elected to title its special coverage of the Libyan war, “Foreign Military Intervention in Libya.”

In this light, it would be easy to conclude that China may find itself on the outside looking in at the vast reconstruction effort – and contracts – that many experts anticipate will follow with the inevitable formation of a new government.

Learning to play both sides

However, despite the strong pro-regime stance Beijing has publicly taken since the start of hostilities, Chinese officials have gone out of their way to also maintain relations with the rebels throughout the war--in a sign perhaps of Beijing’s growing clout abroad and of an evolving foreign policy.

This past June, my colleague Eric Baculinao, wrote about a very public meeting that occurred between Mahmoud Jibril, the chairman of the executive board of the Libyan National Transition Council (NTC), and Chinese Foreign Minister Yang Jiechi.  

That meeting was preceded earlier that month by a visit from Col. Gadhafi’s foreign minister, making China--as Eric wrote at the time, “The only great power so far that both warring parties in the nation's civil war have been willing to visit… [Giving] China a potentially central role in brokering any possible political negotiation.”  

Soon after, though, Chinese diplomats met with NTC officials several times, even dispatching a senior diplomat to Benghazi in July who told rebel officials that they had become an “important dialogue partner” on the Libya question. In return, the NTC pledged to protect Chinese citizens and business interests in rebel-held territories.

Alexandre Meneghini - AP

Libyans celebrate the capture of Tripoli in rebel-held Benghazi (Aug. 22, 2011)

It was perhaps with those business interests in mind that China this week upped the ante again in their bid to boost relations with the rebels. Today a slew of announcements were issued from Beijing on Libya, starting with the Chinese Foreign Minister urging that the U.N. step in to guide future efforts in Libya and announcing that Beijing was in contact with the NTC--a strong signal that they now view the Gadhafi regime finished.

Also today, a spokesman for the Ministry of Commerce conveyed China’s hopes for Libya, specifically the rekindling of over 50 capital projects it has invested in throughout the war-torn nation.

“We hope that Libya will restore stability as soon as possible, and we are willing to play an active role in Libya's reconstruction along with the international community," said Shen Danyang.

With more than 35,000 Chinese citizens at one time working in Libya before the conflict began, China is said to have invested over $18.8 billion in projects ranging from engineering to construction projects to oil exploration.

In particular, the oil question will likely draw closer global scrutiny. As the world's second-biggest oil consumer, China imported roughly 150,000 barrels of crude oil from Libya last year through its state-owned oil company, Sinopec Corp.

As the second-largest oil consumer in the world, any cut in its supply – as implied by Abdeljalil Mayouf, an information manager at Libyan rebel-run oil firm, AGOCO, as punishment for China’s lack of support for the rebellion – would not be catastrophic to Chinese interests, but would still be a noticeable hit to supply.

For his part, Yin Gang, a senior researcher at the Chinese Academy of Social Sciences in Beijing told Reuters this week that he doubted that rebel leaders would terminate China’s oil contracts, saying, “This was one individual's opinion. I can say in four words: They would not dare; they would not dare change any contracts."

Whether the NTC will make China take a bath financially for not pledging support to the rebels earlier in the conflict remains to be seen. However, the speed with which Beijing shifted its previously unshakable faith in a non-interventionist policy is perhaps the clearest example we’ve seen yet that the country’s economic rise at home has forced it to revaluate its core principles abroad.

With surging crises throughout the Middle East and North Africa, it will be intriguing to see how China fares as it continues to try to walk the fine line between protecting its business interests and preserving its neutralist foreign policy elsewhere.