From the past few years, the increasing partnership between China and Iran has raised major concerns among many countries. Sinking economy and the recent COVID crisis pushed Iran into the corner and China timely manifested itself as a perfect partner for Iran. The diplomatic ties between these two countries were established in 1971 and over the years China’s demand for energy and Iran’s isolation from the international community brings them together. The recent investment and security pact covered almost every sector from Telecom, banking, ports, railways and dozens of other projects. Though the secret details of the pact were leaked but soon rejected by Iranian officials.
In 2016, Xi Jinping made a state visit to Iran and then laid the structure of this deal. Soon after in 2019, China announced its plan to invest $ 400 billion. Iran’s economy is suffering greatly because of the U.S.A sanctions and needs a lifeline to revive their domestic market. Where one side, most of the companies from different nations pulled out their businesses from Iran, On the other hand, Chinese investment can play a significant role in Iran’s survival. This partnership between these two nations directly challenges U.S.A efforts to cut off Iran from the international market arena. China’s ever-growing aspirations to increase its involvement in the Middle East perfectly sync with the geostrategic location of Tehran. However, Iran’s ambition to become a regional power needs huge investment in its domestic market. That’s where both countries see themselves as an emerging partner.
China-Iran Economic Relationship
As a growing economy, China dependence on Iran’s oil is quite reasonable. Though this relationship is not just based on the energy, but even on the many different aspects. After 2016, China and Iran were agreed to increase their trading relations to $600 billion in the upcoming 10 years. The agreement was concordant with One Belt, One Road framework. A total of 17 agreements were signed, including one which relates to the Iran nuclear programme. The Chinese will help connect Tehran with Mashhad via their high-speed rail technology. After the sanctions levied by the USA and other western countrieson Iran, its dependence on China increased in recent years. The trading relationship is not only limit to purchase of crude oil but even China’s involvement inIran’s upstream and downstream production processes through major investments.From 2005, both countries signed seven upstream production agreement with each other. All these agreements involve the state-owned Chinese companies, which shows the significant presence of China in Iran.
In December 2019, Syrian president while giving an interview to a Chinese media expressed his willingness to join the BRI project and projected Syria as a perfect partner for the Chinese investment. Syria suffered a lot because of the decades of war and wanted to start the reconstruction activities in their country. Iran and China identified themselves as the ally of Syria and they even wanted to make a strategic nexus between these countries. For the reconstruction process, China is helping Syria from Port of Tripoli by setting up it as a logistic base for the reconstruction process. China wanted to link this port with Syria’s “Four sea strategy” and connect the BRI project to the eastern Mediterranean area. This whole economic bloc could challenge the American hegemony in the region. Iran and Syria are already strategic allies in this region and by adding China in this situation, it would promote the autocratic rule in the region to counter America.
The implication for the Region
Trump administration’s ‘maximum pressure’ policy towards Iran pushed many countries like India and Japan to cut off the trading ties with Tehran. This was seen as the major diplomatic blunder made by the U.S.A because of the one very simple reason that these countries could play a major role to find the middle ground for the talks between Iran and the west.As claimed by the reports, China will increase its partnership to build the ports too, getting a port in the Persian Gulf will provide the major boost to Chinese strategic plans. If China successfully expands its presence in Iran then it will lead to the major conflict between the U.S.A and China. Though China has already invested heavily on the Gwadar port, it will not hesitate to gain an upper hand in the Persian Gulf. From where Beijing can keep its eye on U.S.A movements in the region. India’s investment progress in Iran was slow and that’s the reason recently Iran started the railway track construction work on its own.
The growing instability in the region will further escalate, as the partnership will grow between these countries. China’s ambitions to expand its BRI projects and Syria’s “Four seas strategy” can become a foundation for future projects in the whole region. Syrian President Bashar Assad has promoted this four seas strategy since 2009 that would transform the Damascus into a major trading hub. Syria wanted to form an economic space between Iran, Iraq, Turkey and Syria that will shape a new bloc of nations in the region. This plan includes the four seas of the region from the Mediterranean, Caspian, Black Sea, and the Persian Gulf, which makes easy for these nations from investment to transportation.
The expanding partnership will lead to the architecture of a security structure between these three countries and will directly undermine the U.S.A presence in the region. The gradual consolidation of powers based on Anti-American and Anti-west sentiments can even form a proper security alliance where the inclusion of Turkey would be a possible scenario shortly. All these countries kind of having the same political regime one way or another, so for them it will be a great strategy to stop America’s presence from their domestic issues. If U.S.A wants to stop China’s involvement in the region, it needs to involve its key Asian partner, so that there will be some major power players in the region to maintain stability.