On the results of the long-awaited visit of the President of Iran to China
On February 14-16, Iranian President Ebrahim Raisi’s first state visit to China in two decades took place.
The main purpose of the visit in the Raisi administration was the completion of work on a 25-year strategic partnership plan and the strengthening of economic relations with China. The Iranian president was accompanied by many members of the government, including the ministers of foreign affairs, economy, transport, oil, agriculture and trade. The delegation also included the lead negotiator on Iran’s nuclear program and the head of the Central Bank of Iran.
20 documents on cooperation in various fields were signed.
Xi and Raisi these days have repeatedly mentioned the 25-year strategic cooperation agreement that their countries signed in 2021, under which China committed to invest $300-400 billion in Iran’s oil, gas and petrochemical industries. The implementation of these plans is delayed, and the lack of concrete agreements in Tehran is disappointing.
This became clear from the interview of President Raisi at the end of the visit. Noting the closeness with China in the field of security at the regional and international levels, he spoke with a sharp note about the economic results of his trip:
“The development of relations between Iran and China is moving forward, but what has been done is far from what should be done”.
First of all, we are talking about investments from China. Beijing may not agree to US sanctions against Iran, but Chinese companies do not risk being cut off from the US financial system. While Iran has no other options of this magnitude other than China, Chinese businesses have no shortage of friendly partners. For example, in the first half of 2022, Saudi Arabia received $5.5 billion in investments and contracts under the Chinese Belt and Road Initiative (for comparison, Chinese investments in Iran in the first year of Raisi’s presidency amounted to only $162 million dollars).
The signing of a 25-year cooperation document between Iran and China in 2021 was initially considered a turning point in relations between the two countries. However, after almost two years since the signing of this agreement and its poor performance, suspicions began to arise: either there are no necessary platforms for implementing the provisions of the signed document, or the Chinese side does not want to take risks under the sanctions regime.
In trade and economic relations, this is not so noticeable, China is Iran’s largest partner. According to Iranian customs authorities, over the past 10 months, Iran’s exports to China amounted to $12.6 billion, while imports of goods from China amounted to $12.7 billion. That is, the trade of the two countries is perfectly balanced. However, Iran needs China more than China needs Iran; Iran’s share of China’s total world trade last year was only 0.25%. This asymmetry has a negative impact on perspectives.
Why is Beijing trying not to sever its economic relations with Iran? The Iranian economic publication Donya-e-Eqtesad notes that the answer should be sought in “Chinese ideas about the post-sanctions period.” Allegedly, Beijing wants to maintain its position in Iran in the future if sanctions against Tehran are lifted. Indeed, the behavior of the PRC in recent years shows that this country is ready to take political risks in order to ensure its interests in the long term. A unique partnership has been created between Iran and China that is impossible (or not easy) for Tehran to build with any other country.
And for China, Iran’s significance as a partner lies in Iran’s technological capabilities, its vast and underdeveloped market (population 80 million), rich mineral resources, including oil and gas, and its important geostrategic position. None of the states of the Persian Gulf can be compared with Iran in this respect.
The US understands this. A report by the Heritage Foundation to the Biden administration suggests maximizing the political, economic, and foreign policy costs to the Celestial Empire of supporting Iran. Recommendations are given to tighten sanctions against Iran, to use secondary sanctions against China’s import of Iranian oil, to stop the policy of reviving the Joint Comprehensive Plan of Action (JCPOA), and to exert maximum pressure on the Iranian regime.
The Trump administration’s withdrawal from the JCPOA in 2018 provided Iranian hardliners with a compelling case that the West cannot be trusted. The policy of then-President Hassan Rouhani, who bet on the normalization of relations with the West, seems to be misguided.
Iran’s ties with Russia and China are getting closer. Iran’s foreign policy no longer follows the doctrine of “Neither East nor West” that has existed since the victory of the Islamic Revolution in 1979. The new President Raisi does not reset Iran’s foreign relations, but follows the line enshrined in the new Iranian doctrine “Pivot to the East”. The Iranian leadership sees this approach as an ideological basis for a foreign policy that opens up access to world markets and provides resistance to Western sanctions.
Washington, of course, does not hesitate to say that they will interfere with international trade with China in every possible way, but it sounds strange: after all, China is the largest trading partner not only for Iran, but for most countries of the world, no one can replace it now.
Nikolay Bobkin, FSK
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