In March 2021, both facing U.S. sanctions, Iran and China signed a 25-year cooperation agreement to enhance their economic and political ties. According to a leaked agreement draft, the two countries will cooperate on economic, political, and security issues.
Amidst economic, geopolitical, and security changes, the Middle East remains one of the most dynamic regions in the world. It influences countries in the Persian Gulf and global powers competing for influence.
Iran-China relations are a critical driving force behind current changes. Iran-China cooperation has progressed since the Iran-Iraq War (1980-1988).
During this war, their mutually beneficial friendship took root. This laid the groundwork for a partnership that today strengthens Iran’s economic and regional position and gives China leverage in the Middle East. It is crucial in the context of China-Iran relations and China’s challenge to the dominance of the United States in a broader sense.
Middle Eastern countries and China have long cooperated. But what makes this development different is that both Iran and China have regional and global ambitions. The agreement also has a security component, and both countries have tense relationships with the United States.
In the same way that the unprecedented joint naval exercises in the Indian Ocean and Gulf of Oman worried Washington, the military aspect of this agreement is of concern to the United States.
China’s increasing clout in East Asia and Africa has caused concern for the U.S., and now Iran is Beijing’s next opportunity to challenge U.S. authority in the Middle East.
A key reason for this is that the agreement has ramifications beyond the economic sphere and bilateral relationships: It also operates at the regional, national, and global levels.
By guaranteeing the sale of Iran’s oil and gas to China, the deal can act as a lifeline for Iran’s sanctions-hit economy, which is cash-strapped and suffering. By leveraging its ability to expand China’s footprint in the Persian Gulf, Iran can also use its strategic ties with China as a negotiation tool in future dealings with the West.
As per the agreement, Iran will supply China with large quantities of heavily discounted oil. Instead of directly paying for Iranian oil, China is bartering it for cheap consumer goods. Low-quality consumer goods, such as cars and home furnishings, have found a market in Iran.
For instance, Chery Motors and Geely, a Chinese automobile manufacturer, have found competing with Western-made cars of higher quality easier. Due to sanctions, European vehicles and parts are much more expensive and aren’t as easy to find.
The leadership hails China’s investment in the Islamic Republic as a positive development for both countries.
In addition to economic cooperation, the 25-year agreement also includes military cooperation. In addition, it incorporates China’s Belt and Road Initiative (BRI). BRI is a massive infrastructure development program initiated by Chinese President Xi Jinping that promises to weave port cities across Eurasia together to facilitate trade.
Per the agreement, China will provide Iran with cutting-edge technology that Tehran can use to upgrade its decaying infrastructure. This includes airports, power plants, railways, telecommunications networks, roads, bridges, dams, and more.
As a result of the strategic partnership, China can enhance its influence in the region. This will help to relieve Iranian economic strains resulting from sanctions and international isolation.
Aspects of this agreement are directly related to Xi Jinping’s BRI’s goals and strategic intentions. This is because Iran’s centrality in the Middle East and its regional power are crucial to its success.
In its current state, the China-Iran partnership is significant to both sides: from China’s perspective, it represents the advancement of the Belt and Road Initiative in the Middle East, while from Iran’s perspective, it represents the key to its economic success under sanctions.
Additionally, the partnership challenges U.S. hegemony by advancing Iranian and Chinese interests.
As their agreements strengthen the two countries’ economic, political, and defense ties, their relationship will flourish along key strategic lines, tilting the strategic chess board in their favor.
China’s short- and long-term geopolitical interests are enhanced by its strong ties with Iran in the Middle East, Central Asia, Pakistan, and elsewhere.
However, Iran’s relationship with China has been controversial among Iranians, who argue that it benefits China more than Iran. Some compare it to the 1813 Treaty of Gulistan and the 1828 Treaty of Turkmenchay, where Iran ceded territory to Russia in the Caucasus.
Many Iranians view these treaties as symbols of defeat. Despite this, Iran’s relationship with China, including the recent cooperation agreement, is a win for the country. On a long-term basis, it is likely to strengthen the country on multiple levels, including in its negotiations with the United States and others.
So we can say they are allies of convenience.