25 Year China-Iran Strategic Deal and Consequence for US Hegemony -Imran Nazir


On March 27, 2021 China and Iran has concluded a historic strategic agreement on the eve of 50 years of their diplomatic relations aiming to increase their partnership in upcoming 25 year. Background of this wider encompassing deal dates back to 2016 when Xi-Jinping visited Tehran. Xi’s Iran visit was quite significant as no Chinese president has visited Iran within a decade. Cooperation between these countries have been continuously moving forward due to the current distribution of international power. Recent long-term deal signals extension rather than continuation of their warm relation. Obviously this deal would create headache for Biden administration who wants to push Iran hard since this agreement will not limit in economic aspects rather military and strategic cooperation would be strengthened in the Middle East region.

Before going in detail, a bit of theoretical discussion would be prevalent to understand the striking realities prevailing in the world politics. World power distribution is surely in transition as USA has lost its sole power to act independently as a unipolar actor. Though there is a debate regarding the exact polarity of current world politics since we cannot define it as a bipolar world system as well due to deficit in Chinese power projection. But it is for sure that China is rising against US supremacy. China still lacks behind in few areas but it is likely to equalize its power to USA in near future. Rivalry among superpowers have always started before the equalization process. Alliance making is instrumental feature of superpower rivalry. There have always been some relatively less powerful parties who are dissatisfied with the hegemonic leadership. They revolt against the supreme leader. These dissatisfied actors are favourite to rising superpowers because they can constantly pose challenges to hegemon through asymmetric tactics. Likewise, these parties also align with rising superpower at the early stage of hegemonic rivalry because they hope to become trustworthy and likely to be rewarded by new superpower when it succeeds to position itself in leading role by displacing existing superpower. Recent Chinse-Iranian leadership’s bilateral relations resemble to the abovementioned realist discussion on world politics.

Chinese Foreign Minister Wang Yi and Iranian Foreign Minister Javad Zarif have been working on this strategic agreement for years targeting to accelerate the partnership between these two countries. Terms and conditions have not yet been disclosed from either party. But few reports claim that this agreement is intended to encompass economic, political and military ground to lesser extent. Special focus has been given to the sector of oil, mining, transportation and infrastructure, and agricultural sectors. Greater engagement of private sectors is another priority issue area of this agreement. What we concretely know is that China will invest 400 billion USD within next 25 years in Iran. Obviously China will buy Iranian oil in exchange which is vital for both parties. Notably current China-Iran trade relations amount 20 billion USD per annum. Both countries have agreed to tenfold their trade volume in 2016 when trade relations between these two countries were negligible. Wang Yi signalled that this partnership agreement is not fixed quantitative criteria based rather both countries would strengthen their ties wherever possible. Iranian political and religious leadership also welcomed this agreement with China as their economy is being cripplled by massive US sanctions.

China-Iran strategic partnership in the Middle East has created odds among analysts since China has always maintained a distinct image in this region. Unlike USA, China has shown its eagerness in economic affairs by becoming everyone’s economic partner. In fact, China became the largest economic investor in 2016 but it did not show much political interest yet in this volatile region where there is both segregated regional and international blocks. China kept a complex balanced relation where Israel, Saudi Arabia and Iran got nearly similar treatment in Beijing. But this strategic partnership deal in the light of traditional Chinese economic diplomacy is unique and quite significant to discuss from the hegemonic rivalry perspective.

Why China moved far with Iran? There are different logical explanations on this point. First and foremost, both parties are under US sanctions what compel them to come closer. Condition of Iranian economy has continued to deteriorate since the resume of sanction against Iran by Trump administration in 2018. Now China is the biggest buyer of Iranian oil as it cannot trade with other partners smoothly. So, there is no alternative option for Iranian side but to tilt towards Chinese orbit. Iran is also committed to Eastern alliance due to the predatory nature of Western alliance. Iranian leadership has seen that their immense energy and time have been wasted despite bringing the Joint Comprehensive Plan of Action in 2015 by reducing their nuclear programme. But other parties, especially European entities could not protest against Trump’s arbitrary decision to pull out from this agreement. Despite Biden’s softening tone against Iran on nuclear programme, Tehran is not willing to sit for any discussion unless the full removal of sanctions. However, China-Iran strategic agreement comes with a hard signal to Washington that the tougher measures it takes against Iran, the deeper it engages with China. As China is also bearing the cost of Trump’s sanctions, its deepening relationship with Iran becomes an inevitable reality. Recently EU has also put human right abuse accusation against China in Xinjiang. Above all, this agreement leaves China with the security of unstoppable energy supply even if Western alliance tries to disrupt the Chinese developmental process.

Apart from economic aspect, China-Iran long term agreement is also a response to broad geopolitical rivalry against USA. Trump had left all of US traditional allies in battling Chinese rise around the world. But Biden has always been asserting to prioritize European and Asian allies to ramp up against Chinese expansion. US Defence Secretary Lloyd Austin and Secretary of State Antony Blinken were touring around Europe to confide European allies against China, Russia and Iran. Blinken’s meeting with Foreign Minister of Ukraine signalled the reinvigoration of NATO in Europe against Russia as Biden roars, “America is back.” Besides, US officials have also visited South Korea and Japan recently to shore up allied support against China. China and Russia are also doing their part to by strengthening their internal ties. Russian Foreign Minister Sergei Lavrov went to Beijing to show Moscow’s solidarity against Western alliance. And now China response to US revamp by striking a game changing deal with Iran. US leadership must take this Chinese move seriously in the Middle East as significant development.

USA became single arbiter in the civil war of Middle Eastern countries with the advancement of Islamic State. But the participation of old rival Russia in Syrian conflict virtually wiped out USA. USA must have remembered its vulnerability in power projection against a capable opposition. So, further Chinese engagement in the Middle East would be seriously concerning for Washington. China is uniquely endowed with both economic and military muscle to harbour US opposition in the Middle East. Surely Iran can play the role of a local agent of Chinese expansion through its asymmetric warfare tactics. One should not assume that China will be satisfied with its economic interest in the Middle East forever. Gradually it would be moving forward with the desire of toppling USA and establish its own rules in bigger political spectrum. Maybe the agreement with Iran signals the beginning of Chinses engagement in the world’s most volatile but strategically important region.

Author of this article is an analyst on international issues.