FeaturedInternationalVOLUME 16 ISSUE # 18

China-Iran strategic partnership

A new China-Iran deal is being seen by analysts according to their own biases and interests. Most western experts believe the partnership aims at China gaining a strategic position in the Middle East, which will also encourage Iran to pursue its domestic and regional projects with even more vigour. There are some who claim it will undermine Pakistan’s position in the region.

Though there is no parallel between China-Pakistan bilateral agreements and the recent China-Iran pact, yet some people are apprehensive that the agreement between China and Iran will undermine the China-Pakistan Economic Corridor (CPEC) and Pakistan’s strategic position in the region. Ostensibly, it should help improve the security situation in Pakistan, especially in Balochistan, which has been the target of international forces to destabilize the country. Under the agreement, China will invest $400 million in Iran in 25 years in exchange for unprecedented access to its ports and islands. It shows the scope of their partnership is much narrower than the CPEC, which is worth over $62b.

The deal has also set alarm bells ringing in the western media, which claimed Iran will lose its sovereignty to China after the agreement. The same fear was raised when China had signed the CPEC agreement with Pakistan. The fear is unfounded because Iran is known for protecting its interests fiercely. The China-Iran agreement covers a variety of economic activity from oil and mining to promoting industrial activity in Iran, as well as transportation and agricultural collaborations. The deal also supports tourism and cultural exchanges.

According to analysts, the specifics of the agreement are largely in line with China’s ongoing Belt and Road Initiative (BRI), spending billions in infrastructure investment with an eye on long-term influence and economic and security hegemony. Major sectors include oil, gas, petrochemical, renewables, nuclear power, and energy infrastructure. The draft agreement also covers the high-tech and military cooperation, as well as port construction to facilitate Iran’s integration in China’s Belt and Road trade routes. The agreement has seen US President Joe Biden propose a democratic counterpart, calling for the West to rival Chinese spending in Central Asia, Africa, and developing nations. According to Forbes, the China-Iran partnership has serious ramifications for the United States’ strategy of working with OPEC, China containment, and the West’s utilization of sanctions to pressure noncooperative nations. American sanctions have been working on Iran. Even prior to COVID-19 — which has been devastating for the Islamic Republic — the country’s oil exports had plummeted by millions of barrels a day. It is unsurprising that oil is a major component of the newly signed partnership. While China is likely to buy at a deep discount, simply having an increased financial flow will help Iran withstand the pressure intended to force it into compliance with international law.

Beyond direct oil exports, there is talk of a joint Iranian-Chinese bank which could facilitate sanction evasion. There’s a clear precedent for this: China buys Venezuelan oil as well, and most of North Korea’s under the table business is done through their larger, far less isolated neighbor. For China, the benefit is partly straightforward. Another nation outside of the current America-led order is pulled into Beijing’s orbit. Future exports and imports could be made simple by a resurrection of the previously proposed 926-kilometer New Silk Road rail line, conveniently crossing most of Central Asian and with the potential to expand further into Turkey. China is constructing a modern-day Silk Road through Asia and into Europe, this one crafted from iron, steel, concrete, glass, fiber optic cable — and foreign debt. And emerging superpowers are always interested in adding more client states to their menagerie, the report added.

According to the analysis, a revitalized Iran will raise the blood pressure in Washington and beyond. The geopolitical backing of China and a lifeline for its economy will embolden Islamic Republic – one with newfound leverage in negotiations. If President Biden thinks he can renegotiate Obama’s deal, that task just became significantly more difficult. But there are downsides to China courting yet another volatile satellite. In deepening ties with Tehran, Beijing risks alienating the rest of the Middle East, where it has previously sought partnerships. The past decade has seen China grow its economic, political, and security footprint in the region, becoming the largest external investor for many of these countries. China is Saudi Arabia’s largest trade partner and Israel’s second largest, both of whom consider Iran their chief geopolitical threat. The potential for increased tensions is high. China is playing a dangerous game that it will need to navigate deftly, lest its newfound strategic relationship become a strategic liability, the report feared.

The Arab media has also been skeptical about the deal and its lack of details. Arab states will continue to maintain close ties with the US – ties that neither China nor Russia can match right now, unless a radical shift occurs in the balance of these relations. Yet their evolving ties with China and Russia, even if they are focused on the economy, have important implications that the US would do well to not downplay. Today, China and Russia are putting forward many initiatives in the Middle East, a region that was considered almost entirely in the American sphere of influence. According to a report in the National, what is interesting, however, is the timing. It comes within 100 days of US President Joe Biden taking office and his desire to reconfigure America’s relations with both countries. Now, it seems Beijing and Tehran have moved past the era of fearing US sanctions following the departure of Biden’s predecessor, Donald Trump.

According to China Daily, although thousands of miles apart and having different cultural backgrounds, Beijing and Teheran have a long tradition of friendship, which has been strengthened over the years by bilateral economic cooperation and similar views on regional issues. This has formed a strong basis for the alignment of their respective development visions. Iran occupies a special niche in the China-proposed Belt and Road Initiative, and China has an increasingly important position in Iran’s “look to the East” policy. It does not target any third party and simply provides a general framework for China-Iran cooperation going forward. Those who have chosen to view the long-term cooperation plan from the perspective of geopolitical competition lose sight of the real picture of China-Iran cooperation, which will benefit the two peoples and contribute to maintaining regional and world peace. They pretend not to see the positive effects of China-Iran cooperation as they are still looking through a lens from the Cold War era, the newspaper said in an editorial.

From Pakistan’s perspective, the Iran-China deal is expected to rejuvenate the CPEC and improve its security situation. It will also improve Pakistan’s strategic position in the region.