By Andrew Wan
Undergraduate Intern, Center for the Middle East
Rice University ’22
The Trump administration’s hardline approach to foreign policy has driven Iran and China toward each other. The “maximum pressure” campaign against Iran has crippled its economy, and the shift to “strategic competition” against China has led to the unraveling of decades-long cooperation in Sino-American relations. It is thus no surprise that China and Iran have accelerated their talks to secure their interests in an increasingly hostile world. The proposed $400 billion Iran-China partnership represents a significant strengthening of economic and military relations between the two longtime trade partners, which will have significant implications for Middle East dynamics.
On the surface, the benefits of this agreement are primarily economic. The deal offers an urgent lifeline for Iranians operating under the severe pressure of American sanctions exacerbated by Covid-19. Iran is keenly aware that it has not benefited from the kind of increase in Chinese investment and infrastructure projects seen in Israel and GCC countries. A long-term commitment enables Tehran to demand greater economic cooperation with Beijing and ensure that the Belt and Road Initiative translates into projects in Iran that create jobs.
But for both countries, the pact offers long-term strategic value in dealing with America. Tehran hopes that stronger relations with Beijing could bring the U.S. back to the negotiating table by increasing Iran’s ability to withstand sanctions. Foreign ministry officials and Iranian state media described China as the only major power that can resist American bullying, and on the international stage, China has demonstrated a willingness to shield Iran from American diplomatic pressure. China defended Iran at the IAEA, and strongly opposed the United States’ proposed extension of the arms embargo against Iran. In turn, Tehran has openly stated they trust China more as a partner compared to Western countries. Such mutual support is reinforced in the text of the agreement, which states that both countries are determined to collaborate “in the face of pressure from a third country,” a clear reference to the U.S.
For Beijing, this partnership is more about diplomacy, stability, and regional influence than business. A closer look at Beijing’s Middle Eastern investments reveals that China does not need this deal economically. In recent years, China has scaled back business with Iran due to U.S. sanctions, instead opting to work with less-risky partners to meet business and energy needs. Saudi Arabia, the UAE, Egypt and Iraq all have stronger trade ties with China through the BRI and as energy suppliers. Supporting Iran may actually seem to be counterproductive for China, as the scope of the proposed partnership is certain to draw criticism from regional powers, particularly Israel and the Gulf states, while risking retaliation from the U.S.
While China certainly relies on regional stability and firm bilateral relations to protect its investments, conflating China’s desire for stability with timid acquiescence would be a mistake. China’s regional economic interests do not depend on total peace and cooperation. Rather, China prefers the “stability” of the status quo: a multipolar Middle East where states feel compelled to hedge their bets and strengthen ties with China. China thrives within this current framework in which it can extract economic and resource agreements with both pro- and anti-American powers while benefiting from existing American security architecture. Importantly, these conditions allow Beijing to remain nominally neutral while enabling destabilizing forces that frustrate U.S. hegemony. Iran is the lynchpin in maintaining this tenuous arrangement and a crucial counterweight to American influence in the Middle East; by supporting the Iranian economy, China hopes to prop up the Iranian government, thereby maintaining regional balance.
Iran also holds key strategic value in furthering China’s security ambitions. Iranian access to critical maritime pathways offers China the opportunity to consolidate its economic and military interests in the Persian Gulf and Indian Ocean. China’s proposed projects in Iran match its geopolitical investment approach via the BRI, that of constructing critical transportation infrastructure in partner countries. China has emphasized its commitment to developing the Iranian Port of Jask and creating three free trade zones to boost the local economy. Beijing’s strategy is clear: it envisions Iran as the newest component of its “Industrial Park-Port Interconnection, Two-Wheel and Two-Wing Approach” initiative, adding Jask to its string of logistical station ports along the Arabian Sea and the Suez Canal. The Port of Jask, located just outside of the Strait of Hormuz, would give China a vantage point in the Gulf, ideal for securing its energy imports and establishing a presence in an area otherwise dominated by the U.S., whose Navy’s Fifth Fleet is headquartered in Bahrain.
Beijing is also looking to manage the strategic Iranian Port of Chabahar, the nearest base Tehran has to the Indian Ocean. Iran has previously looked to India to develop Chabahar into a major import-export terminal, but India’s support has waned due to U.S. sanctions. China may supplant India in development of the port and its associated railway line, which could connect Iran’s gas flow to the Gwadar Port and China-Pakistan Economic Corridor. Considering that the proposed agreement describes deepening military cooperation through shared defense development, intelligence cooperation and joint military maneuvers, China’s interest in the Gulf of Oman could reasonably be interpreted as an effort to expand Chinese influence beyond the Asia-Pacific and eventually challenge America in the Gulf and the Indian Ocean (or divert American resources from the Western Pacific).
China and Iran have been reluctant to announce this consequential partnership thus far. Both countries may be waiting for the results of the 2020 U.S. election before proceeding, as a Biden administration would likely adjust the United States’ current Iran strategy and seek to re-enter the JCPOA. However, given that the U.S. has proven to be an unpredictable and unreliable actor, it is more likely the two countries are working out concerns among themselves. Iran needs to be sure that China is not exploiting Iran’s growing desperation for its geopolitical desires in ways that may not always align with Tehran’s goals, while China needs to know if Iran is committed to a partnership regardless of Tehran’s relationship with the West. While the partnership may never fully materialize, this resurgence of Sino-Iranian relations serves as a stark reminder to policymakers that aggression toward our adversaries may generate more problems than solutions.