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China-Iran pact more than meets the eye

Nan Yang

May 1, 2010
China-Iran pact more than meets the eye
China-Iran deal is raising concerns from India to Israel to the US as the details remain a tightly guarded secret

Chinese President Xi Jinping and Iranian President Hassan Rouhani in a file photo. Photo: Facebook

This is part 1 of a three-part series on China’s recent moves in the Middle East.

When China and Iran, two of the United States’ main adversaries in the contemporary world situation, enter into a 25-year strategic pact, it is pointless to split hairs and speculate whether the development affects American strategies.

Of course, it does. The West Asian region is all about geopolitics – starting from oil and jihad to petrodollar.

The region served as the crossroads of empires for centuries between Europe and Asia. And in modern history, foreign intruders conflated new poignant realities – failed states, humiliated peoples, crippled economies, extreme inequality and poverty, devastated environments, plundered resources, conflicted geographies and violent radicalism.

The historic China-Iran agreement signed on March 27 in Tehran during the visit of China’s State Councilor and Foreign Minister Wang Yi has been under negotiation since the 2016 visit by Chinese President Xi Jinping to Tehran.

Numerous visits by Iranian Foreign Minister Javed Zarif to China in the recent years testified to the high importance Tehran attached to the negotiations culminating in the formal signing ceremony in Tehran Saturday, which also marked the 50th anniversary of the establishment of diplomatic relations between these two “civilization states” of the 21st century that enjoyed vast historical continuity and cultural unity across a large geographic region through millennia.

The text of the agreed document has not yet been put in the public domain but broadly, we can glean from the joint statement issued on March 27 that the agreement reached during Xi’s visit to increase bilateral trade to US$600 billion in the next decade has been acted upon.

In fact, the joint statement begins by invoking Xi’s visit.

Two supplementary documents signed by the two countries pertain to the “MOU on Jointly Promoting the Silk Road Economic Belt and the 21st Century Maritime Silk Road” and the “MOU on Reinforcement of Industrial and Mineral Capacities and Investment”, whereby both sides “shall expand cooperation and mutual investments in various areas including transportation, railway, ports, energy, industry, commerce and services.”

Iran’s supreme leader Ayatollah Ali Khamenei meets with Chinese President Xi Jinping in Tehran, January 23, 2016. Photo: AFP

The joint statement says that given their relative economic advantages, both sides shall enhance their cooperation in the field of energy. Iran will supply oil and gas to China, while the Chinese side “shall consider financing and investing in the up-and-downstream projects of the energy industries” in Iran.

Again, wide-ranging economic cooperation is envisaged covering investment and trade exchanges, banking, financing, mining, transportation, communications, space, manufacturing industries, development of ports, upgrade and expansion of Iran’s railway networks, the introduction of express railway systems in Iran, agriculture, water resources, protection of the environment, food security, fighting desertification, water desalination, use of nuclear energy, etc.

A bilateral “MOU on Strengthening of Investment Cooperation” is devoted to this aspect and the exchange of know-how and technology.

Yet the scope of the pact by far transcends trade and investment. A commentator in the Chinese state media noted: “As it stands, this deal will totally upend the prevailing geopolitical landscape in the West Asian region that has for so long been subject to US hegemony.”

The joint statement states that the Comprehensive Strategic Partnership signifies “a major agreement in all areas of bilateral relations and regional and international issues.”

It adds: “Currently the regional and international situation is experiencing deep and complex developments. Under such circumstances, the two sides emphasize the importance of cooperation between the developing countries on international affairs and are committed to joint efforts towards realization of peace, stability and development in the region and the world at large.”

Interestingly, the joint statement highlights that “China attaches importance to Iran’s effective role as the regional power and evaluates positively Iran’s role in activities under the framework of the Shanghai Cooperation Organization and supports Iran’s application for full membership of the Organization.”

Of course, it is a way of telling the world that China does not accept the isolation of Iran from the world community. Conceivably, China and Russia are on the same page here.

The US has contributed significantly in providing a raison d’être for such a pact. :agree:Neither China nor Iran is expecting any goodwill from the US. They perceive that the adversarial mindset in America is only hardening under President Joe Biden’s watch.

As for Tehran, it no longer pins hope that Biden will revive the JCPOA or lift sanctions anytime soon. Thus, without doubt, pushing back against the US unilateralism and sanctions is a leitmotif of the China-Iran strategic partnership.

China’s interest lies in “broad-basing” this leitmotif to embrace its relationships with the regional states as a whole. Wang’s regional tour covered Saudi Arabia, Turkey, Iran, UAE and Oman. The fact that he traveled to Iran via Saudi Arabia is both symbolic and of substantive importance.

At his meeting in Riyadh on March 24 with the Saudi Crown Prince Mohammed bin Salman, Wang said China supports Saudi Arabia in safeguarding its sovereignty, national dignity, security and stability, and opposes interference in Saudi Arabia’s internal affairs under any pretext.

Chinese Foreign Minister Wang Yi meets with Saudi Arabian Crown Prince Mohammed bin Salman in Riyadh on March 24, 2021. Photo: AFP/Bandar Al-Jaloud/Saudi Royal Palace

Prince Mohammed affirmed in response that the rise of China is conducive to global peace, stability and prosperity, as well as a more balanced global development. :china:

The Crown Prince expressed the hope that the two countries will boost anti-terrorism and security cooperation to uplift the bilateral ties to a higher level. Importantly, the Crown Prince said Saudi Arabia “firmly supports China’s legitimate position on the issues related to Xinjiang and Hong Kong, opposes interfering in China’s internal affairs under any pretext, and rejects the attempt by certain parties to sow dissension between China and the Islamic world.”

Plainly put, Saudi Arabia has undercut the current US campaign against China regarding Xinjiang. It is a snub to the Biden administration. In fact, Wang’s regional tour testifies to the ground reality that there are no takers for the US’ diatribes against China. :-)

The regional states sense that the US is being driven by seething rivalry over a rising China poised to overtake it in a near future as the world’s number one superpower. They refuse to take sides in the rivalry.

The salience lies here: China has introduced, after careful assessment of the power dynamic in West Asia, certain common principles that are equally applicable across the region to provide the basis for its relationships with the regional countries.

The unspoken objective is to encourage the regional states to shift to independent foreign policies, shaking off the western yoke, especially US hegemony. But China’s method of doing this is radically different from the coercive and often violent tactics that western powers traditionally adopted in the region.

Turkey’s President Erdogan and Chinese President Xi Jinping, left, walk past honor guards during an official welcome at the Great Hall of the People in Beijing in a file photo. Photo: Volkan Furuncu / Anadolu / AFP

China has absolutely no interest in using coercion as an instrument of “persuasion,” even with Turkey, which has a vocal Uighur diaspora, who held a demonstration during Wang’s visit.

At the meeting with Wang, President Recep Tayyip Erdogan underscored Turkey’s deep interest in “boosting mutual trust, promoting the synergy between China’s Belt and Road Initiative and Turkey’s ‘Middle Corridor’ plan, enhancing cooperation in the fields including interconnection and intercommunication, infrastructure construction and investment, seeking more balanced development of bilateral trade and encouraging local currency settlement. China instead is offering equal relationships.”

Erdogan also voiced Turkey’s appreciation for China’s five-point initiative for achieving security and stability in the Middle East and its willingness to deepen communication and coordination with China on regional affairs. Fundamentally, China’s projection of a constructive agenda to develop “win-win” engagement with the regional states is gaining traction.

Nan Yang

May 1, 2010
The China-Iran pact is a game changer – Part II
Iran’s President Hassan Rouhani received China’s State Councilor and Foreign Minister Wang Yi, Tehran, March 27, 2021

Part II: China positions itself on the right side of history

Part I: China neutralises the US campaign on Muslim Uighur issue
In an exclusive interview with Al-Arabiya last week, China’s State Councilor and Foreign Minister Wang Yi outlined Beijing’s approach to the West Asian region with particular reference to the tensions in the Persian Gulf.

Wang lamented that “due to protracted conflicts and turmoil in the more recent history, the region descended into a security lowland… For the region to emerge from chaos and enjoy stability, it must break free from the shadows of big-power geopolitical rivalry and independently explore development paths suited to its regional realities. It must stay impervious to external pressure and interference, and follow an inclusive and reconciliatory approach to build a security architecture that accommodates the legitimate concerns of all sides.”

Wang has reiterated a Third Way. China has been espousing lately a “five-point initiative” devolving upon adherence to mutual respect (non-interference in internal affairs), equity and justice (read Palestine issue), non-proliferation (Middle East nuclear weapon free zone), collective security (proposal to hold in China a multilateral dialogue conference for regional security in the Gulf), and development cooperation (Belt and Road Initiative, Free Trade Agreements). It is not going to be easy for the US to match this Chinese package of “genuine multilateralism”. China is encouraging the regional states to adopt the politics of equity and justice, and “resistance” to the US bullying (which we normally associate with Iran) to create strategic autonomy.

China hopes to anchor its bilateral relationships on this new thinking which provides seamless possibilities to add solid content of great mutual benefit. Thus, an announcement came during Wang’s halt in Abu Dhabi (his destination after Tehran) that the UAE will start producing China’s Sinopharm vaccine next month as the first Gulf state to set up a coronavirus vaccine production facility with initial capacity to make 200 million doses annually, boosting its efforts to become a supply hub to West Asia and Africa.

On the other hand, just before Wang Yi’s arrival in Riyadh, the CEO of Aramco Amin Nasser announced, “Ensuring the continuing security of China’s energy needs remains our highest priority – not just for the next five years but for the next 50 and beyond.” The Saudi Crown Prince Mohammed bin Salman told Wang at the same time that Riyadh is keen “to continuously deepen” the bilateral cooperation” in crude oil, petrochemical, nuclear energy and other energy fields, “while also expanding it into new fields” such as 5G, telecommunication and digital technologies.

By the way, the 155th session of the League of Arab States Council at the level of foreign ministers adopted a China-related resolution on March 3, which reiterated the importance to strengthen China-Arab ties, and announced that Saudi Arabia will be hosting the first Arab-China summit this year. Wang called it an impressive marker and hopes to make the summit “a memorable event in the history of China-Arab relations.”

The US has never before faced from the Soviet Union or its western competitors this sort of challenge that China is posing today by offering to the regional states an altogether new path of development and governance that gives primacy to their national identity as sovereign states, keen to diversify their economies and not merely continue as gas stations for Big Oil. China’s offer is seductive: it does not take sides in the intra-regional rifts and schisms and instead wants regional players to follow an inclusive and reconciliatory approach to build a security architecture of their own that accommodates the legitimate concerns of all sides.

And, yet, China calculates that the outcome will be that the region would eventually step out of the shadows of western dominance to independently pursue its policies and resist US pressure and interference. In short, a level playing field is what China is seeking in the near term.

Thus, while seeking that Iran should resume fulfilling its commitments on the nuclear issue, Wang suggested that the international community should also support the efforts of the regional countries to establish the Middle East as a nuclear weapon-free zone, and that for a consensual approach, all parties should discuss and formulate a route and timetable for implementing the JCPOA. Conceivably, this puts China in a pivotal role as mediator between Iran and its Arab neighbours.

Indeed, the ‘X’ factor is about the security and military cooperation under the China-Iran pact. No matter the strategic ambivalence on both sides on the issue, if US-Iran tensions deepen, Tehran will begin to see mutual advantage in allowing China (and Russia) to access its bases occasionally to counterbalance the US presence in the Persian Gulf. Without doubt, Iran will be seeking the transfer of advanced military technology from China (and Russia), once the UN embargo on such transactions end shortly under the framework of JCPOA.

The big volumes of oil and gas exports to China will boost Iran’s purchasing power. (China is reportedly ramping up its imports of Iranian oil already; imports are expected to reach levels of 856,0000 bpd in March, an 129% jump on February.) Simply put, China will be generating income for Iran to realise its full potential as a regional power that cannot be cowed down. Meanwhile, Saudi Arabia too is viewing China (and Russia) as its partner to develop an indigenous defence industry that reduces its dependence on costly purchases of weaponry from the western countries.

Iran senses that the hardening US attitudes toward China, as evident during the recent talks at Anchorage, have prompted Beijing to shed its earlier reticence and to switch to an overt outreach toward regional politics. Wang Yi stressed in his remarks in Tehran that China is willing to oppose hegemony and bullying, safeguard international justice and fairness as well as uphold international norms together with people of Iran and other countries. “Our relations with Iran will not be affected by the current situation, but will be permanent and strategic,” Wang said. His punchline, of course, was: “Iran decides independently on its relations with other countries and is not like some countries that change their position with one phone call.”

Elsewhere, Wang stressed that China is consistent in opposing the unreasonable unilateral sanctions imposed on Iran by other countries, because they violate the international law, especially those based on lies and false information, which are immoral and unpopular and constitute an affront to human conscience. He said China stands ready to work with Iran and other countries to jointly oppose the acts of bullying by powers, uphold international equity and justice, and defend the basic norms of international relations.

To be sure, Iran welcomes this marked shift in China’s diplomatic stance and sees distinct advantages in it. The Secretary of Iran’s Supreme National Security Council Ali Shamkhani, a highly influential figure in the country’s top echelons, has described the pact with China as “part of the active resistance policy.”

Wang pointed out that it is time to seriously reflect on the bad consequences inflicted on the region by external interferences, and work together to explore effective ways to maintain long-term regional security and stability. Of course, China is well aware that the regional divides (that are largely the creation of the western powers) will not disappear overnight. Nonetheless, Wang’s consistent message throughout the regional tour was that the regional countries should uphold their sense of ownership, carry forward the spirit of independence, get rid of the interference of geopolitical competition, seek development paths suitable for the national conditions, and establish a security framework in line with their interests.

China is playing the long game. Wang’s regional tour of West Asia marks China’s belief and confidence that it is on the right side of history.

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