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Are US Sanctions An Obstacle To China's Domination Of Iran?

China's Foreign Minister Wang Yi (R) shakes hands with Iran's Foreign Minister Mohammad Javad Zarif during their meeting at the Diaoyutai State Guest House in Beijing on December 31, 2019
China's Foreign Minister Wang Yi (R) shakes hands with Iran's Foreign Minister Mohammad Javad Zarif during their meeting at the Diaoyutai State Guest House in Beijing on December 31, 2019

Beijing's increasing political influence in Tehran during the past five years, and the unusual growth in military cooperation and trade between the two have turned China into the biggest winner of the 2015 nuclear deal with Iran, says Iranian analyst Reza Taghizadeh.

On 29 June the Iranian Foreign Ministry Spokesman Abbas Mousavi called the document about this cooperation "a source for pride" while former President Mahmoud Ahmadinejad described it as another Treaty of Turkmenchai; the 1828 agreement between Iran and Russia based on which Iran (then called Persia) ceded large parts of its territory to the expansionist northern power.

Ahmadinejad referring to the vague reports on the long-term cooperation agreement with China also said, "The Iranian nation will not recognize a new secret 25-year agreement between Iran and China," and warned that any contract signed with a foreign country without the people knowing about it will be void.

The Iranian public has a historic sensitivity to economic domination by any big power, as Britain found out in the 20th century. Now, many Iranians are raising the alarm on social media about a possible Chinese domination.

Based on a 2013 plan, China has been furthering a project to revive the Silk Road and also open a sea route to import raw materials and expand its market in underdeveloped countries.

According to Taghizadeh, the seemingly charitable plan aims at developing the infrastructure in 70 countries, but in fact, what China is seeking is a monopoly on the natural resources of these countries.

Meanwhile, another Iranian analyst, Reza Haqiqatnezhad has said in a tweet that Iran's idea to boost relations with China is an old plan engineered by Supreme Leader Ali Khamenei that dates back to 2005, however, as Trump came to power, Khamenei's plans did not go any further. The reintroduction of sanctions blocked plans for Chinese investments and also brought Iran’s economy to a standstill.

Other authors have also noted how trade between the two countries has hit a an all-time low in 2020, after continuing declines since 2019.

Haqiqatnezhad quoted Iran's former Central Bank Governor as having said that Iran signed $35 billion worth of finance contracts with China immediately after the 2015 nuclear deal also called the Joint Comprehensive Plan of Action (JCPOA). But those contracts were halted after Trump pulled the U.S. out of the multilateral nuclear accord.

According to Haqiqatnezhad, the document for cooperation with China was first mentioned in 2015. However, Trump’s policies prevented more economic interaction between Tehran and Beijing.

In an article on Radio Farda’s Persian website Taghizadeh explains what Iran means for China. "Thanks to its sensitive political geography, its huge energy resources and mines, as well as its 85 million strong consumer market, Iran can be the grand prize in China's colonial plan, the One Belt, One Road (OBOR) initiative.”

The simultaneous launch of Tehran's Looking East policy and Beijing's OBOR, paved the way for a quick boost to Cino-Iranian relations, he added, noting that it was Iran's fragile ties with Europe as a result of U.S. sanctions, and EU's accord with Washington’s Iran policy that pushed Tehran to embrace the idea of Looking East.

Now, Iran seems ever-more eager to herald its desire to rely on China, without a clear signal from the other side which is reluctant to get into a game of violating Trump’s sanctions and further complicating its relations with Moscow.

Khamenei on several occasions, while looking for a way out of Iran's economic crisis, suggested that Tehran should get closer to the China and Russia. Former Majles Speaker Ali Larijani played an instrumental role in trying to make the plan popular with other Iranian politicians. However, he did not have such a tough job as, the conservative figures around him and the powerful IRGC already supported the idea.

In one perspective, both analysts are right. Left alone, economic relations between China and Tehran would have expanded and China’s domination of Iran’s resources would have become a reality. But U.S. sanctions have made Tehran even more desperate to rely on China.

James Calabrese noted recently that Washington's tough stance toward Iran has created both an opportunity and a challenge for Beijing. In an article titled The Not-So-Special “Special Relationship, argued that it is tough for China to take advantage of American-Iranian tensions without "further fueling Sino-American tensions".

Haqiqatnezhad wrote in another series of tweets: "During the JCPOA talks which took place at the peak of the Looking West era, Khamenei insisted on Looking East and criticized negotiators for their frequent visits to the West."

Taghizadeh noted Iran's dire economic situation last year, when Iran asked for a five billion dollar loan from Russia and the International Monetary Fund. None of them gave the cash to Iran. In such a situation, China which has the biggest cash reserve in the world could be Iran's savior. Or that is what some Iranian officials think.

According o Taghizadeh, Zarif has acknowledged that that the deployment of Chinese forces to Iran's ports on the Persian Gulf, using the Kish Island and fishing rights in the Persian Gulf waters for 25 years are part of the concessions Iran has offered to China against a $400 billion Chinese investment in Iran's oil, gas and petrochemical projects.

Iran appears to be looking forward to China's assistance in furthering major industrial and economic projects while past experiences have not been encouraging. A previous Iran- China project to construct just a 110-Kilometer road between Tehran and the Caspian Sea region has not been completed in 23 years and the Chinese company in charge was kicked out.

Meanwhile, the Iranian foreign ministry spokesman calls the Iran - China deal a source for pride, but the Iranian government is not even prepared to publish the contract. More likely, there is no signed document. It is Iran’s wishful thinking at the moment.

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    Behrouz Turani

    Behrouz Turani is a British-Iranian writer and journalist as well as a consultant on Iran's political dynamics and the Iranian media landscape.