Iranian Foreign Minister Mohammad Javad Zarif’s visit to the G-7 summit in France late last month was a surprise to many in the West. Some even viewed it as a good omen. But for the Iranian leadership, Zarif’s quick trip to Biarritz was always a long shot and with little chance to turn the tide in the U.S.-Iranian standoff. Such doubts were confirmed in the days that followed. U.S. President Donald Trump’s administration still refuses to lift sanctions on Iranian oil, and Tehran will not engage in direct talks with Washington until some unequivocal relief from sanctions is first provided by the U.S. side.
Feel-good symbolism aside, Zarif departed Biarritz empty-handed. His next trip held more promise, anyway. Before he even arrived in Beijing, Zarif had already put pen to paper for China’s prominent Global Times. His call in that op-ed for consolidating what he labeled a “strategic partnership” with China is a recurrent aspiration of the leadership in Iran. But despite Tehran’s deep need for Beijing to come to its rescue, the prevailing view there is that a qualitatively different relationship with the Chinese government is needed before Iran can commit itself to becoming China’s anchor in Western Asia. The question is how China sees its own long-term interests in Iran.
In the big geopolitical clash that is underway between the United States and China,
it makes little sense for Beijing to submit to Washington’s agenda of isolating Tehran. In fact, the Chinese have already openly breached U.S. economic sanctions on Iran by continuing to buy Iranian oil, among other things. Some observers go as far as predicting a wholesale Chinese bailout to rescue Iran from the claws of the Trump administration: “Iran is the key to China’s plans, just as China’s plans are key to Eurasia’s destiny,” the author Robert Kaplan recently wrote in the New York Times.
There is no doubt that Beijing sees Iran as prime real estate in Western Asia.
There is no doubt that Beijing sees Iran as prime real estate in Western Asia.
It is a country with first-rate natural resources, plenty of human capital, and a hungry and relatively untapped market. China is already Iran’s largest trading partner, and, as a bonus, Iran is also a political outlier on the global stage that with the proper cultivation could become a Chinese client state of sorts.Put simply, from China’s perspective, there is no reason why it would want the Trump administration’s maximum pressure campaign on Iran to succeed. And yet, that is not the whole of the story. Ties between the two are more complicated than first meets the eye.
Since the early 2000s, China has become Iran’s top trading partner and oil
customer; cooperation extends to arm sales and geostrategic balancing against the United States. Chinese planners have identified Iran as one of the most important countries in connecting Asia to Europe through its Belt and Road Initiative. Belt and Road is the flagship foreign-policy initiative of Chinese President Xi Jinping’s tenure. The ultimate goal of the initiative is to restructure the system of global trading rules and investment practices into one that is more favorable to China. It also aims both to project of soft power and to establish the foundations for China’s hegemony in Eurasia.
Much of the vision for Iranian-Chinese cooperation was laid out in Xi’s January 2016 state visit to Tehran. The two states agreed to expand trade to $600 billion over a 10-year period while also building stronger cooperation as part of a 25-year plan. In addition to trade, China is a leading investor in the Iranian market. About 100 major Chinese companies invest in Iran’s key economic sectors, especially energy and transportation. For example, the China National Nuclear Corporation is redesigning Iran’s Arak IR-40 heavy water reactor to address nonproliferation requirements as part of the 2015 Iran nuclear deal.
The Chinese government has extended a $10 billion loan to Chinese companies to build dams, power generators, and other infrastructure in Iran, such as the recent installment of a rail link between Bayannur in China’s Inner Mongolia region and Tehran. Other transportation projects include building or funding rail lines to the eastern city of Mashhad and to the Persian Gulf port of Bushehr. China also wants to help speed up the construction of a port in Chabahar on the Gulf of Oman, a project initially intended for cooperation with India. Another prominent example is Tehran’s five metro lines, which are all built by Chinese companies. The rail cars are built by an Iranian-Chinese joint venture enterprise, Tehran Wagon Manufacturing Company.
