China and Iran Comprehensive Strategic Partnership Review
China and Iran Comprehensive Strategic Partnership Review

China and Iran Comprehensive Strategic Partnership Review

The establishment of a new Comprehensive Strategic Partnership between China and Iran made headlines, but as Camille Lons and Meia Nouwens explained, Middle Eastern leaders are by no means naive.

While shaking hands with the East, all eyes remain on the West.

The long-awaited signing of the Sino-Iranian cooperation program for 25 years, Chinese Foreign Minister Wang Yi, Saudi Arabia, Turkey, Iran, UAE, Bahrain and Oman, including the visit was the crowning achievements of his Middle East tour. . Saw Wang plans a five-point initiative for the Middle East and proposes to host the Israeli-Palestinian dialogue as well as the multilateral Gulf security dialogue.

The deal, which has been discussed since it was first proposed in 2016, made headlines in 2020 when the New York Times announced a draft version of the deal. It is reported that this agreement will expand China’s presence in a wide range of sectors, ranging from energy, banking, telecommunications and infrastructure.

It would also offer military cooperation, including research and cooperation, as well as joint training in the defense industries. In turn, it was reported that China will receive a heavy reduction in Iranian oil supply over the next 25 years.

While the leaked document does not include specific fiscal targets or a complete breakdown of projected projects, it was claimed in the news that Chinese investments would amount to US $ 400 billion (arguably unreasonable).

This number continues to be mentioned in most reports covering the imminent signing of the agreement and triggers concerns in Western countries and the GCC countries, as well as in Iran, where a significant portion of the population fears the country may become overly dependent on Beijing.

The final version of the agreement has not yet been made public, but reports from Iranian and Chinese sources offer different pictures of its content.

While the Iranian news media jumped over the story to highlight the depth and breadth of this nascent bilateral relationship with Tehran’s “friend of hard times”, Chinese journalism offered very little detail.

Articles published in Xinhua remain unclear, focusing on the diplomatic aspect of Wang's visit.

They reported on China’s assistance to countries in the region to combat the COVID outbreak, China’s unique position in promoting regional peace and stability, through ‘proposing an alternative model to US hegemony’ and China’s ‘building a new development model’. Belt and Road Initiative.

However, the details of the agreement were never mentioned. Even more strikingly, and contrary to reports citing the figure of $ 400 billion, Chinese Foreign Ministry spokesman Zhao Lijian said that “[the plan] does not contain quantitative specific contracts or indicators.”

Contextualizing Things

International experts who monitor Sino-Iranian relations were unanimously skeptical of the groundbreaking nature of this agreement. The idea that China will invest $ 400 billion in Iran has proved unrealistic. To put things in perspective, this would account for almost a third of the estimated investments for the entire Belt and Road Initiative.

To date, the total available stocks of Chinese foreign direct investment stocks in Iran are about 3, according to the Chinese Ministry of Commerce, which is slightly more than China’s investment in Saudi Arabia but significantly less than the amount of Chinese investment in the countries. It is around billion US Dollars. Like Pakistan, UAE and Israel.

In practice, US sanctions greatly complicated the ability of Chinese companies to do business in Iran, and Chinese firms have not been involved in any major infrastructure projects in Iran since the South Pars natural gas project withdrew in 2019.

From a political and security perspective, Comprehensive Strategic Partnerships may include elements of security cooperation, including arms sales and joint training, but they should not be understood as military alliances.

It is unlikely that China will significantly increase its regional involvement or prioritize Iran over other regional powers such as Saudi Arabia or the UAE. So far, China and Iran have entered limited maritime security exercises such as a triple exercise with Russia in February 2021 – meanwhile, China has participated in similar exercises with other countries in the region.

Beijing did not sell UAVs to Iran as it did to the GCC countries, and did not become a partner in local arms production, and the lifting of the United Nations arms embargo on Iran in October 2020 did not cause a flurry in China’s arms purchases.

The notable point was Wang’s offer to host regional security talks in the Bay area, indicating a little departure from Beijing’s usual reserve. However, it is unlikely that China will invest in the necessary political will to make such talks important.

All eyes on the USA

As the evolution of global geopolitical dynamics increasingly forces Middle Eastern forces to look to the East, both Beijing and Tehran are ultimately trying to prioritize their relationship with the United States and the West.

China’s bilateral trade with the United States overshadows its bilateral trade with Iran, against $ 30 billion of around $ 550 billion (though underestimated for sanctions).

Far from being an all-weather partner, Beijing has repeatedly sacrificed its relationship with Tehran for greater interests in Washington, as it did during the negotiations of its trade agreement with the United States in early 2020.

However, Beijing has easily reaffirmed its Middle East partnerships when it needs to strengthen its position on the international scene. This time is no different.

China had a difficult two years in terms of foreign policy. Since 2018, its treatment of Uyghurs in Xinjiang has faced international criticism (mostly from US allied countries) about its first handling of the COVID-19 outbreak in Wuhan, and its links with tech giant Huawei.

Its growing military claim along land borders and beyond territorial waters has also been met with significant backlash. As a result, China finds itself in the coldest conditions with the US since the Nixon era. It is therefore not surprising that Beijing is willing to highlight deepening bilateral relations with both Washington’s allies and enemies.

For Iran’s side, the focus is definitely on the West, despite the fanfare of political and media commentators moving towards Asia. Iranian officials see the partnership with China as a way to reduce their isolation in the international arena and strengthen their hand ahead of new negotiations on the Joint Comprehensive Action Plan (JCPOA).

But the first months of the JCPOA in 2016 made it clear that Iranian companies preferred partnerships with the West over those in China, and a similar scenario could repeat itself if the US loosens sanctions. For Tehran, this deal with China will be met with a heavy sense of realism.

While China is an important market for Iran’s commercial interests, Tehran will continue to adopt a pragmatic approach to its relations with Beijing as it tries to strategically develop its relations with Western countries.

A Paradigm Shift

As a result, the Iran-China deal is unlikely to pose a threat to the JCPOA negotiations or to be perceived as an alternative to Iran’s relations with the West. Rather, it is in China’s interest to see a return to nuclear negotiations.

While Washington’s campaign of maximum pressure has opened some room for China’s influence in Iran, sanctions limit Chinese companies’ economic opportunities and Beijing is concerned about Tehran’s nuclear ambitions.

It is not surprising that the announcement of the Iran-China deal soon followed with a small breakthrough in the JCPOA negotiations and the US announced the next week’s talks in Vienna.

Rather than changing the rules of the game, the Iran-China Comprehensive Strategic Partnership reflects the natural development of relations between the two countries and parallels China’s similar relations with other Middle Eastern powers.

While it remains to be seen how this agreement will progress in the next few years, historical evidence shows that Iran could neutralize those who expect to see major shifts in foreign and security policies.