Iran turns to China with 25-year agreement

Khattar Abou Diab
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The slogan “Not Eastern, not Western, but an Islamic Republic” was one of the most prominent rallying cries of Khomeini, the founder of Iran’s current political regime. But more than four decades since the revolution, it is clear that independence has not been achieved and that the effort to restore imperial glory has only transformed Iran into a geopolitical dueling ground for the world’s superpowers.

The much-anticipated revival of the 2015 nuclear deal with the Biden administration seems unlikely - at least not any time soon - after Tehran signed a 25-year strategic cooperation agreement with Beijing. At first glance, it appears to be a great win for Tehran, breaking down its isolation and providing a negotiation card with the Biden administration. But the reality is more complex, because this agreement will erode the relationship between Iran and Russia, and because China is not prepared for this agreement to be the reason for a clash with Washington over the key corridors of the “new Silk Road.”

Despite all the ups and downs in its relation with Washington, Iran has successfully maneuvered so that its territory is not a battleground for the conflicts of others, a lesson gleaned during the war with Iraq. Since 2010, Iran has been subject to attacks inside its territory related to its nuclear and missile programs and to terrorist activities, but its regional expansion and imperial ambitions have made neighboring Arab countries a center of conflict. And now, in the midst of an intense US-China rivalry, Iran finds itself at the heart of the turmoil. While Persia was historically the focus of Russian and Anglo-Saxon attention, today we see a new conflict emerging over Iran between the American and Chinese superpowers.

The relationship with Washington has long been mercurial, reaching its apogee with Barack Obama’s bet on partnership despite strong hostility and rivalry. Today, this relationship is being tested by a conflict of interest, after decades of indirect cooperation beginning in 2001 and gaining momentum during and after the Iraq war, and declining in the Trump era. Therefore, due to Russia’s lack of sufficient economic potential and Europe’s inability to operate solo without Washington, Tehran used the Chinese One Belt One Road Initiative as a way to open up to Beijing and keep pace with its ambitions for economic and strategic expansion. China and Iran have close but complex relations; the two countries are similar in many ways as both boast ancient civilizations. Today, both sides underscore the importance of their political and cultural relations, with an emphasis on commonalities in their ancient heritage and their cooperation in contemporary issues, as Iran and China come together in the current era to reject the hegemony of the US (Khomeini’s legacy).

China’s Foreign Minister Wang Yi shakes hands with Iran’s Foreign Minister Mohammad Javad Zarif during a meeting at the Diaoyutai state guest house in Beijing, China, on December 31, 2019. (File photo: Reuters)
China’s Foreign Minister Wang Yi shakes hands with Iran’s Foreign Minister Mohammad Javad Zarif during a meeting at the Diaoyutai state guest house in Beijing, China, on December 31, 2019. (File photo: Reuters)

The five-page document, which was signed by the foreign ministers of China and Russia on March 28 in Tehran, is written in both Chinese and Farsi and outlines the roadmap for the areas of cooperation between the two countries for a period of 25 years. Since June 2020, the official Iranian press has presented the text as a project worth $400 billion in Chinese investment in Iran in the oil and gas industry, road network, railways, airports, and technology sector. In return, Tehran, which is prevented by Washington from exporting its oil, pledged to supply Beijing with fuel at reduced prices. However, this has sparked anger in Iranian circles, with accusations against the Islamic Republic, strangled by US sanctions, of “selling out the country” to the “Chinese dragon,” harking back to historical events that led to Iran losing many of its territories in the Caucasus to the Russian Empire, its rival neighbor, after wars in the first half of the nineteenth century.

This deal, whose details the two sides wish to conceal, is not an international treaty, but rather a memorandum of understanding relating to three specific areas of cooperation between the two countries.

While Chinese circles deny that the deal has any secret security aspects, the RAND Center for Global Risk and Security, a US research organization, accuses China of supporting the suppression of the Iranian Green Uprising in 2009, forgetting that the Obama administration at that time preferred not to intervene to support it. In an effort to justify the agreement, Mahmoud Vaezi, Iranian presidential chief of staff, said, “The agreement is a road map for our relations, our investments and our joint trade with China and will be completed during the coming months and years... This document is not a convention or a deal, but rather a general framework for drawing the relations between the two countries for contracts. It is not mutually binding.” Hua Chunying, the spokesperson for the Chinese Ministry of Foreign Affairs said, “China has never sought any selfish interests in the Middle East. It neither seeks spheres of influence nor engages in geopolitical rivalry.” Beyond the real goals of the two sides, the timing of the announcement of an agreement that has been negotiated since 2016 comes in line with Iran’s desire to send a message to the West and with China’s desire to implement its strategies and compete with Washington in this vital region.

From the economic point of view, the agreement must be evaluated by comparing it with similar agreements in the region, such as the 2016 agreement signed between China and the Kingdom of Saudi Arabia, the largest supplier of oil and the largest provider of Chinese strategic stocks. It is noteworthy that the Chinese Foreign Minister began his regional tour in Riyadh and not in Tehran. The American and European concern about this agreement is not limited to the economic side, as European experts who follow Iran’s nuclear and ballistic programs fear that Chinese technology will leak into Iran through North Korea, but the defense industry circles focus on the roles of Moscow and Pyongyang, pointing to the great cooperation in transferring technology from Israel toward China. This diversity in Chinese relations includes Egypt, Algeria and Iraq, as well as Israel, the United Arab Emirates and Saudi Arabia. Therefore, an observer of Chinese foreign policy considers that “China does not support any party in the Middle East region at the expense of other parties and rejects the concept of alliances and the creation of blocs, which carries the mentality of the Cold War and enhances the possibility of tensions and wars. Instead, China prefers to focus on building a wide network of strategic partnerships, leveraging its growing economic strength.”

Despite the importance of Sino-Iranian trade (China is Iran’s largest trading partner, while Tehran is Beijing’s third largest customer in the Middle East), China has significantly reduced its economic exchanges with Iran since 2018 in compliance with US sanctions. And now, with the US-Chinese tension, and in a race with Washington’s expected opening up to Tehran, Beijing is seizing the opportunity. Iran has shipped record quantities of oil to China during the past few months by indirect means, and energy market dealers and analysts have reported that China has received another large flow of cheap Iranian oil last March, which comes to it as crude from other origins. Approximately one million barrels per day of Iranian crude can reach China, nearly half the amount that came from Saudi Arabia, the largest exporter in the world, to China in the first two months of this year. These figures themselves worry oil-producing Russia as well as Washington.

This is above all a game of interests and balances, not of ideologies shaped by Khomeini’s legacy and Mao’s shadow, because the new shape of globalization driven by Beijing and embraced by Tehran takes into account the flow of capital, goods and national interests, where people are merely fuel for an international conflict that will rage across Asia during this century.

This article was originally published in, and translated from, pan-Arab London-based outlet al-Arab.

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Disclaimer: Views expressed by writers in this section are their own and do not reflect Al Arabiya English's point-of-view.
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