Although the recent China-Iran deal prompted extensive debates in international media, Iran is not the only country in the region to keep up a strategic partnership with China. The GCC states such as Saudi Arabia (since 2016) and the United Arab Emirates (since 2018) do as well. According to the China Global Investment Tracker, Beijing invested up to $62.55 billion in Saudi Arabia and the UAE between 2008 and 2019. (Julia Gurol & Jacopo Scita, 2020) Although due to the impacts of Washington’s maximum pressure strategy this new dimension of relationships looks more beneficial to Iran than to China, however, Beijing will now merge as one of the global powers to make sure the survival of the JCPOA presenting China with the opportunity to set the tone in the broader nuclear non-proliferation debates.
Economically, China needs to import its energy mostly from the Middle East and it also maintains a huge interest in exporting. China, in Iran’s Pivot to the East policy, will become now one of few formal buyers of Iran’s oil boosting its footprint in the Iranian market. Under the umbrella of the One Belt, One Road project, China is steadily expanding its political influence and investment plans in the Strait of Hormuz, the Persian Gulf, which has occurred as a new theatre of U.S.-Iran power competition. Moreover, China is keen to stabilise the security environment that will help its infrastructure investments in the region. (Global Times, 2017) According to China’s estimations, the growth opportunities through the One Belt, One Road project will reduce tensions in the Middle East. (Xinhua, 2017) Therefore, China has proceeded to invest in Iran. The latest example was a 538 million USD railway deal. (South China Morning Post, 2017)
Iran’s Look East Policy
Iran’s policy of a “Pivot to the East” involves developing robust ties with the giants of the Asian continent, namely, China and Russia. (Micha’elTanchum, 2020) China and Iran have now signed an agreement, a roadmap for 25 years. While the Iranian government spokesperson said that there was no legal obligation to publish it (Patrick Wintour, 2021), we can assume that the agreement entails political-strategic, economic and cultural components for improving and promoting relations between China and Iran in the long run. The present agreement emphasises the effective participation of Iran in the Chinese one belt one road project with extensive projects in infrastructure, financial and banking fields. In terms of the political-strategic dimension (military, defence and security), China and Iran will set up close positions and cooperation promoting exchanges, and consultations on issues of mutual interest, including strengthening the defence infrastructure, countering terrorism and holding regular military manoeuvres. (Hossein Amir Abdollahian, 2021) China and Iran have emphasised economic ties, including cooperation in the fields of oil, industry and mining, and energy-related fields.
China was essential to striking a nuclear deal between Iran and the West. First, the Chinese were a real (if occasionally reluctant) partner in building pressure on Tehran. Beijing voted for six UN Security Council resolutions targeting Iran between 2006 and 2010 (The Arms Control Association, 2017), and China’s oil imports from Iran fell by more than 20 per cent in 2012-2013 when the United States was rising its crippling sanctions campaign. (Middle East Institute, 2016) As Iran’s most considerable oil customer, Chinese cooperation was crucial to the effort. China was then important to designing the JCPOA.
For almost three years, the destiny of the 2015 Iran nuclear deal, the Joint Comprehensive Plan of Action (JCPOA) hung in the balance (Guardian News, 2018). However, the Trump administration withdrew from the JCPOA in 2018, an international agreement between Iran and world powers endorsed by the UN Security Council in Resolution 2231 seeking a “maximum pressure” strategy. (Hossein Mousavian, 2019) The maximum pressure strategy by the United States, if anything, sharpened Tehran’s wish to introduce Beijing as a reliable economic and political ally under the atmosphere of threats and sanctions. Thus, Iran’s policy of a Pivot to the East has achieved all the more credibility among Iranian officials after the United States withdrew from the JCPOA.
Thus, the relationship between the two countries is asymmetrical but highly pragmatic. Economic sanctions against Iran have driven the growth of China-Iran economic ties. Having been cut off from the West by sanctions, Iran has engaged in a Look East Policy. China is now Iran’s largest trade partner, its largest oil purchaser, and its largest foreign investor.
The US-Iran relations and Implications for China
A point of agreement between the United States and China is that both do not want a war in the region. China and Iran share the interests that they substantially oppose violent regime change policies. The existing U.S. sanctions and other bold moves will raise uncertainties to business and presumably postpone much of the economic engagements of China in Iran. But these policies may lead China and Iran to reduce imports and exports from each other and seek alternatives, but the policies imposed by Washington will not stop Sino-Iranian exchanges completely. Iran is not part of China’s immediate neighbourhood, but China is becoming an important part of the Iranian security calculations.
The Trump Administration’s chaotic foreign policy offered a buffet of opportunities to Beijing. Given the absence of ties between Tehran and Washington, China steps in opportunistically. The United States’ maximum pressure campaign on Iran, combined with a confrontational approach from Saudi Arabia and Israel vis-à-vis Iran and the growth of tensions in the Strait of Hormuz are endangering both the freedom of navigation, energy security and flow of oil supplies through the Persian Gulf. Nevertheless, China seems quite reluctant to become bogged down in the regional tensions and attempts to avoid a military conflict. China’s reluctance to act as a security guarantor in the Persian Gulf indicates that Beijing does not want to pay any of the costs of possible military tensions in the Middle East and that its security strategy towards the Persian Gulf is not yet well-known. (Job B Alterman, 2013) Hence, Beijing seems unlikely to proclaim any peace initiatives for Iran and Persian Gulf security beyond broad calls for peace in the region, probably maintaining China’s existing policy of non-interference. (Camille Lons, Jonathan Fulton, Degang Sun, & Naser Al-Tamimi, 2019)
Although China would need to support cooperation with Iran on civil nuclear projects, China has been careful as Iran’s main partner in reconstructing nuclear facilities, not desiring to get ahead of the United States. Diplomatically, Beijing and Tehran stay together as long as Washington continues unilateral measures against them, although it’s unlikely that Tehran or Beijing use the alliance to confront Washington directly. Currently, with the Biden Administrations delay in recovering relations both with Iran and the failure to offer to substantially resolve the trade war with China, Beijing would be reluctant to help the United States to regain its footprint in the Middle East and certainly not dominance over the only country in the region with rich hydrocarbon resources in which Americans lack a foothold.
Iran-China relations is also linked to the fate of their respective relations with Washington and Iran’s upcoming election in 2021. Although China and Iran now share many strategic interests, in the long run, Iran’s wish to build up good relations with Western powers may affect its relationship with China. It remains yet unclear how far United States commercial and banking sectors will be willing to ease sanctions and engage with Iran. The United States can revisit Iran policy to avoid a major crisis with Iran and pave the way for a new round of negotiations with Iran. Otherwise, under the current conditions, we can expect Chinese players to create and widen influence and ties to keep up ties with Tehran without overly provoking Washington.