Iran-China Relations: Illusions and Realities

ECONOMYCOMMENTARY 10.04.2021
Yasir Rashid Assistant, Economy

Although an agreement has been signed between Iran and China, there are several issues, including differences and similarities between the two countries, which raise many questions.

Will a new chapter in relations between the two countries begin with signing the Comprehensive Strategic Partnership between Iran and China? Has China decided by signing this document to make Iran its most important base in the Middle East? In late March 2021, a detailed analysis written by Fereydoun Khavand published in Radiofarda presented a set of factors in both negative and positive sides in examining the unfolding strategic move between Iran and China. In this essay, we want to summarize Khavand’s main points.

Differences and similarities between Iran and China:

Differences:

1. The doctrinal foundations of both countries regarding the origin of power, the evolution of human society, and how to govern it are completely opposite to each other. Theism is the source of power in Iran, and China's political system is based on atheism.

2. Both countries have different approaches in dealing with the West. China sees engagement with the West as a factor in its development, while Iran, by hating the West, has isolated and even neutralized a large part of its society.

Similarities:

1. Both countries are common in enmity with public freedoms, and their most important priority is to maintain power exclusively by rejecting other contenders for power in the country. 
2. Both countries are similar in their pessimism towards the West. But the Chinese, unlike the Islamic Republic, have turned to broad economic cooperation with Western powers in their interests. 
3. Contamination by corruption is another similarity between the two countries. Chinese “red princes/شاهزادگان سرخ” such as “Islamic noble-borns” take advantage of their families' position at the top of the pyramid of power and wealth and lack of freedoms.

After 1979, two major factors simultaneously made China Iran's most important trading partner. The first was the rise of the irresistible resistance of the Chinese economy, which made it the "factory of the world". The second factor was the collapse of a large number of economic bridges between Iran and the West. As a result, China became Iran's largest trading partner.

Ambiguities and questions:

1) Iran, as a crisis-ridden country and deprived of the support of international organizations, naturally needs China, which is the second-largest economic power in the world. For China, of course, Iran's market and energy resources are important, but not as willing as it is to jeopardize its relations with the West and countries with influence in the Middle East. China is Iran's most important trading partner, but trade between the two countries at best (in 2014) did not exceed 1.2% of China's total foreign trade. How could the Chinese risk their $ 500-600 billion in trade with the United States, which accounts for about 13 percent of China's foreign trade, over this small share of their foreign trade?

2) In the Middle East, Iran is China's third-largest trading partner after Saudi Arabia and the United Arab Emirates. Why should the Chinese establish a privileged and exclusive relationship with the Islamic Republic and jeopardize their relationship with Saudi Arabia and the UAE (not forgetting Israel)?

3) Why the Chinese have to commit to the Islamic Republic to buy Iranian oil and gas over a period of 25 years when we know that the position of fossil fuels in the energy basket is changing rapidly and no one knows will China need Iranian oil and gas in 25 years or not? 

4) If China is interested in building an extremely privileged relationship with Iran, why not return Iran's assets in Chinese banks (about $ 20 billion) to Tehran? Why has Beijing complied with most of the US’s sanctions against Iran? Why did Chinese companies leave Iran shortly after Washington left the JCPOA? Why did Chinese banks close Iranian accounts? 

5) Is Beijing going to build a base in Iran to maintain the security of its investments and deploy 5,000 troops in a coastal country in the Persian Gulf? Why should China embark on this adventure in one of the most sensitive strategic areas of the world? Will the deployment of Chinese troops alongside the world's most important sources of interest and gas be tolerable for other Asian giants, including India and Japan?

China, Iran, Strategic Agreement, Ideology, Trade