Dara Conduit & Shahram Akbarzadeh. Journal of Contemporary China. Volume 28, Issue 117. May 2019.
Introduction
Iran is expected to be one of the main beneficiaries of China’s Belt and Road Initiative (BRI). China and Iran had a track record of cooperation long before the announcement of BRI, developing a highly asymmetric Great Power-Middle Power partnership over the course of three decades. This article asks whether BRI will enable China and Iran to transcend the limitations faced by most Great Power-Middle Power relationships on the basis of Iran’s enhanced strategic economic and geographic value. It is argued that while BRI could benefit from stronger China-Iran ties, Iran’s international posturing has proven a significant hindrance to China, highlighting that entrenched patterns of engagement in Great Power-Middle Power relations are not easily shifted, even in the face of immense economic incentives.
China’s major project to gain unfettered access to global markets, initially dubbed One Belt One Road and later re-branded as the Belt and Road Initiative (BRI), has major implications for how China engages in trade, development and diplomacy. Middle Eastern leaders embraced China’s initiative, seeing it as a crucial source of investment and trade at a time when the USA is reducing its oil dependence on the region.
Iran, which straddles the Persian Gulf and the Caspian Sea, with land access to Europe via Turkey, is widely expected to be one of the main beneficiaries of the BRI. China and Iran had a track record of cooperation long before the announcement of BRI, with the relationship forming in the late 1970s, and expanding following the 1979 Iranian revolution across economic, military and diplomatic fields. Over the following three decades, the China-Iran relationship developed as an archetypal Great Power-Middle Power partnership, with significant inbuilt power asymmetry. China is a nuclear power and economic giant, while Iran is a resource-rich state whose economic and military potential has long been undermined by costly wars and political mismanagement. This asymmetry produced limits to bilateral integration because while China saw utility in Iran’s ability to frustrate superpower ambitions, it was simultaneously averse to any activity that risked it being drawn into a conflict not of its own making. China especially feared that Iran’s posturing towards the USA might create direct Sino-US conflict, leading to the entrenchment of patterns of engagement over the course of three decades in which China periodically reined in Iran in order to minimise the relationship’s underlying risk.
Nonetheless, both China and Iran depicted the BRI initiative as an unprecedented opportunity for the relationship, with the Chinese Ambassador to Iran Pang Sen writing on Iran’s Islamic Republic News Agency site:
The Belt and Road initiative will create a historic opportunity to deepen and broaden our cooperation and development…I believe the Belt and Road initiative will bring a brighter prospect of cooperation between the two countries, and start a new chapter of friendship between the two peoples.
Echoing these sentiments, the Iranian Deputy Foreign Minister Ebrahim Rahimpour declared that ‘to build the Belt and Road together will not only yield win-win progress, but also contribute to regional stability’. It is on the basis of the two states’ mutual interests and enthusiasm towards BRI that the expansion of the bilateral relationship has been viewed as somewhat inevitable. However, it is important to ask whether this slated expansion is feasible given that the asymmetry between the two powers has historically constrained their relationship’s scope. This article therefore asks whether BRI will enable China and Iran to transcend the limitations faced by most Great Power-Middle Power relationships on the basis of Iran’s enhanced strategic economic and geographic value. Is a shift in a middle power’s economic and strategic worth sufficient to narrow the power imbalance in asymmetric Great Power-Middle Power partnerships?
To answer this question, the article first examines the conceptual underpinnings of both asymmetric relationships and Great Power-Middle Power alliances. While the China-Iran relationship is not a formal alliance, the dynamic of the relationship shares many characteristics with an alliance, making it instructive to explore the key conceptual features of both typologies. Following this conceptual exploration, the article examines China-Iran relations up until 2013 to identify the patterns of engagement that developed in the relationship’s formative decades. The article then turns to the BRI period, noting the congruity between President Hassan Rouhani’s agenda of bringing Iran out of isolation and the launch of the BRI, and contrasting the opportunities presented by BRI to Beijing’s longstanding caution on Iran.
It is argued that while the BRI project could benefit immensely from Iran’s geographic position and act as a springboard for greater China-Iran partnership, Iran’s international standing, specifically in relation to the USA, acts as a brake on an accelerated partnership. Iran’s posturing tends to undermine its substantial potential to benefit from the new opportunities presented by China’s enhanced interest and investment in the Middle East. Iran threatens to entangle China in its self-made crises, adversely affecting Beijing’s readiness to invest in closer ties with Tehran. This has proven a significant barrier to the upgrade of the Iran-China relationship in the BRI period, highlighting that entrenched patterns of engagement in Great Power-Middle Power relations are not easily shifted, even in the face of immense economic incentives.
Asymmetry in Great Power-Middle Power Relationships: The Case of China and Iran
Great Power-Middle Power relationships are a common feature of the international arena, exemplified in the close ties between states such as the USA and South Korea, the USA and Australia, and China and Vietnam. The China-Iran relationship is a further example of such a typology, because China boasts a massive conventional army and nuclear cache, and is a Great Power in line with Mearsheimer’s categorisation. Iran by contrast resembles a middle power, whose comparatively large population, economy and conventional army endows it with influence in its own region, even though extra-regional great powers exert significant influence on the Middle East. A widely agreed upon definition of ‘middle power’ remains elusive as many authors imagine middle powers through a West-centric, liberal idealist mould, but scholars have increasingly argued that middle powers need not promote liberal democratic values or be more virtuous than great powers. Iran therefore matches Shin’s definition of a middle power, as:
A state actor that has restricted influence on deciding the distribution of power in a given regional system, but is capable of deploying a variety of sources of power to change the position of great powers and to defend its own position on matters related to the security affairs of the region to which it belongs.
The China-Iran relationship has never included a written military agreement and does not fulfil the requirements of a formal alliance because it lacks a security commitment, but it was nonetheless a close and productive partnership, which by the 1980s aimed to offset pressure from both the USA and the Soviet Union. Such asymmetric arrangements are particularly common in the case of rising second-rank powers such as China.
Middle powers represent an attractive partner for great powers because their substantial power and influence can be leveraged to augment great power security. To Walt, many such relationships are formed defensively in order to balance power in the international system. In this regard, China and Iran found in one another an opportunity to augment their positioning vis-à-vis the superpowers. The relationship never lost this founding context in which both states viewed one another with a backdrop of other Great Power relations in the region. Fels found that middle powers hold particular appeal for great powers because:
A middle power is rarely in a position to threaten the survival of a great power; [whereas] other great powers may instead be very capable and willing to do this…This considerably limits the incentives for great powers to cooperate with each other but seek weaker partners (i.e. middle powers) instead.
In Iran, China saw a partner that had weight in its own region and was not easily pushed around by the superpowers, but who simultaneously did not threaten its own security. Karsh however warns against overstating the significance of a middle power’s military might as a drawcard, noting that this ‘has been replaced by political considerations such as the prestige and influence accruing from the recruitment of the small state to one’s own camp’. Indeed it was Iran’s ability to frustrate superpower objectives rather than its middling military capacity that appeared most attractive to China. Iran’s symbolism and pariah status would later represent a powerful bargaining chip for China in its interactions with the other great powers.
Intra-relationship asymmetry is a defining feature of Great Power-Middle Power relationships because the military, diplomatic and economic imbalance between the two partners is so vast. This asymmetry has significant consequences for the shape of such relationships because it frequently manifests as middle power dependence on the more powerful partner. This can lead to the junior partner placing greater value on the alliance than the great power because a middle power is unlikely to withstand significant regional threats on its own. Since the great power is in many cases able to dictate the terms of the alliance, including its future, weaker powers often face an intra-partnership security dilemma in which they may fear abandonment at a key juncture. This has been seen in Iranian leaders’ reticence to publicly criticise China over many decades. These intra-relationship power dynamics can undermine the weaker partner’s ability to negotiate conditions within the relationship, and may require a significant sacrifice of autonomy in the name of survival.
It is important however to not overstate the extent to which great powers can shape the behaviour of their partners. Middle powers retain some autonomy in asymmetric alliances, particularly if they represent significant value to the great power. This has meant that great powers are often powerless to rein in the behaviour of their partner, even though the military and power imperatives favour the great power. Khan argued that:
A great power can threaten, bribe, beg, and try to reason, but if it is convinced that the survival of a client state is crucial to its own national security, there is little it can do to change the client state’s behavior. The weaker state is usually all too aware of this fact.
Indeed, Mandelbaum went so far as to argue that Great Power-Middle Power relationships often cause great powers to face ‘complementary fears’ in which they may be concerned about ‘entrapment’ by being dragged into a conflict that is not of their own making. He surmises: ‘The weaker party will worry that the alliance will not work. The stronger, more secure ally will worry that it will work, in effect, only too well’. This soon proved to be the defining characteristic of the China-Iran relationship. While China saw Iran as a useful tool to frustrate the USA, Iran was also a liability that could overplay its hand and provoke an actual conflict with the USA, for which China might be held responsible.
The following section examines the development and entrenchment of these patterns of engagement in the China-Iran relationship over its founding decades, noting how the partnership’s formation as a response to both states’ insecurity vis-à-vis the superpowers endowed it with a particularly outward-looking character. With one eye always on the outside, the relationship was more often shaped on the basis of exogenous considerations rather than the partnership’s intrinsic value. The article then turns to the BRI era, assessing the relationship’s capacity for change in the face of new economic realities.
China-Iran relations 1983-2015
The sense that China-Iran interactions were shaped in response to external great power machinations was evident from the partnership’s founding moments. The China-Iran relationship began to develop in the final decade of Iran’s last monarch Mohammed Reza Shah. The Chinese Communist Party Chairman Hua Guofeng travelled to Iran to meet the Shah in August 1978, months before the latter’s overthrow. Hua’s visit was widely interpreted as an effort to build ties with Iran to create a buffer against Soviet expansion in the region, although both sides played down any anti-Soviet rhetoric for fear of angering Iran’s northern neighbour. Upon landing in Tehran, Hua gave a speech criticising superpower ‘expansion, aggression and domination’ and declared that ‘we categorically oppose and fight the policy of expansion of the big powers, and we fight their interference in the affairs of other countries, and violation of the sovereignty and honour under any pretext’. The seriousness in which China took the emerging relationship was underlined by the historical significance of the Chairman’s visit, which was the first of a Chinese head of state to a non-Communist country. Bloodworth wrote the following year: ‘Iran was the spindle on which China’s strategic calculations turned’. However, the sentiment was not immediately returned by Iran. Although Iran gave the visiting head of state a warm welcome, the Shah remained the USA’s firmest ally in the Middle East and Iran was cautious of upsetting its Soviet neighbour. This cautiousness was captured in an editorial in the prominent newspaper Kayhan published ahead of the visit that warned that Iran ‘did not intend mortgaging its future by adopting Peking’s anti-hegemonist policies’. An Iranian source interviewed by the Times Wire Service reported that Hua would receive a ‘courteous but noncommittal’ response to efforts at strengthening China-Iran ties.
The Shah was overthrown months later, fomenting a complete reconfiguration of Iran’s international priorities. Iran’s new leaders advocated a policy of international non-alignment, popularly known as ‘Neither East nor West’. In this new configuration, Iran would distance itself from both the USA and the Soviet Union, and forge an independent path in the international arena in line with its national interests. Iran became one of the world’s loudest critics of hegemonic powers. Although there was some lingering suspicion among Iran’s new leaders in relation to China’s courting of the Shah, China recognised the new Islamic Republic of Iran on 14 February 1979, just days after the collapse of the old regime. China was reported to have later apologised to Iran through a Pakistani intermediary for Chairman Hua’s visit to the Shah.
The reconfiguration of Iranian foreign policy brought China and Iran closer together ideationally, although the two states did not work together in a substantive way until 1983. The September 1980 Iraqi invasion of Iran forced Iran to temporarily align with the Soviet Union for military assistance. Given that China’s primary interest in the Middle East at the time centred around limiting great power influence, Iran’s connection with the Soviet Union prompted China to briefly work with Iraq, ultimately providing up to 10% of Iraqi arms imports during the eight-year conflict. By 1983 however, the Iran-Soviet relationship had broken down, creating an opening for China and Iran to form an informal partnership.
By the time the China-Iran relationship was formed in 1983, Iran was in serious military trouble as a result of its ongoing brutal war with Iraq and isolation from the international community. This highlighted the relevance of Karsh’s observation that great powers often seek relationships with middle powers for more than pure military goals. Iran was not in great standing militarily by the time it began seriously engaging in China. Nevertheless, the new regime had already more than proven its credentials as a thorn in the USA’s side, particularly through the 1979-1981 Hostage Crisis. This prompted Garver to argue that Iran represented a key bargaining chip for China, noting that:
Through its assistance to Iran, China demonstrated its ability to confound or to facilitate U.S. objectives in the Middle East. China could facilitate Iran’s nuclear programs, missile programs, and military modernization efforts, for example, or it could abstain from such cooperation with Iran. It was Washington’s choice.
While China and Iran sought one another out for different reasons, both parties had significant interest in the continuation of the relationship.
China quickly became Iran’s largest source of military wares, providing up to 80% of Iran’s arms. Iran bought a large number of Chinese tanks, weapons and munitions for its war efforts, coming to increasingly rely on China for military hardware and trade over the decades to come. This relationship became so extensive that Maloney argued that ‘the roots of the economic relationship between China and Iran are in fact in the military arena’. This pattern continued long after the war—China would later provide significant support to Iran’s fledgling arms industry, including on nuclear matters. Iran may seem the main beneficiary of such arrangements, but the economic relationship was just as important to China. Hyer made the bold argument that the Iran-Iraq war presented China with an immense arms export market, without which its economy ‘would not have developed so rapidly’. In 1996, the two countries signed a US$4.5 billion arms agreement. The bilateral economic relationship also includes hydrocarbons, minerals and manufactured goods, with China becoming Iran’s largest trade partner in 2010. However, Great Power-Middle Power asymmetry was evident even in the trade relationship. Oil exports kept the balance of trade in Iran’s favour, but Iran became heavily reliant on China as its top trade partner, while Iran did not even feature in China’s top five trade partners. In fact, China imports more oil from Saudi Arabia and Angola than it does from Iran, and by 2014, Iran was just China’s sixth-largest oil supplier. This served to heighten Iran’s dependence on China.
In many ways, the relationship achieved its Great Power-Middle Power purpose in strengthening the position of both parties against international pressure. The outcome of the Iran-Iraq war would arguably have been poorer for Iran had China not supported its military campaign. China also advocated on behalf of Iran in the international arena, including during United Nations Security Council discussions on ending the war. This role bought China significant ‘political capital’ with Iran in the years to come. China would later act as a buffer against international pressure during the Clinton Administration’s dual containment policies, and again throughout the Iranian nuclear standoff the following decade. As Iran’s economy became crippled by international sanctions, China increased its oil purchases and by 2012 was buying 54% of Iran’s oil exports. Once sanctions made it difficult for Iran to export oil, China assisted by facilitating alternative financial pathways, including barter arrangements, as well as importing non-sanctioned products such as Iranian iron ore. By 2014, Iran had become China’s fifth largest supplier of iron ore. China bought 90% of Iranian iron ore slated for export.
China too benefited from its partnership with Iran, including during periods of international isolation. Iran backed China following the Tiananmen Square massacre on 3-4 June 1989, offering token, but welcome diplomatic support to its beleaguered partner. As China came under increasing international pressure on its human rights record, an Iranian official criticised ‘naked interference in China’s domestic politics’. Li Peng visited Iran 2 years later, declaring that the hegemonic behaviour and bullying by powerful states ‘is the biggest threat against the peace and security of the world’.
Perhaps more significant however was the way in which China’s connection to Iran has emboldened its bargaining position with the great powers. China dragged its feet in 2010 when the fourth round of UN sanctions on Iran’s nuclear program were under discussion, with China’s UN ambassador declaring that ‘this is not the right time or right moment for sanctions because the diplomatic efforts are still going on’. China soon after agreed to the sanctions, but not before extracting concessions from the USA that would protect Chinese companies operating in Iran from future USA sanctions. Indeed, while the international sanctions had deterred most international companies from doing business in Iran, Chinese companies began to enjoy somewhat of a monopoly in the country, highlighting China’s willingness to use Iran as a bargaining chip to further its own interests. In the context of the collapse of the Soviet Union, the USA’s rise as the world’s sole superpower and increasing pressure on China in relation to its human rights record, the China-Iran relationship therefore became an important tool for China.
Nonetheless, the hallmark asymmetry of Great Power-Middle Power relationships also placed sharp limitations on the scope of the partnership. With the dual considerations of entrapment and abandonment emerging in the first decade of the relationship, it became clear that China would often be nervous of Iran’s propensity for warmongering, while Iran would fear abandonment from its only significant Great Power relationship. Although China was willing to establish an anti-hegemonic relationship with Iran that protected both states from international pressure, China’s fear of ‘entrapment’ appeared at several key junctures. This was first seen in 1987 when Iran fired a Chinese-made Silkworm anti-ship missile at a US-escorted oil tanker during the Iran-Iraq tanker war. Although an estimated 190 ships from 31 countries were attacked by Iran during this period, Beijing viewed Iran’s use of Chinese weaponry on a US target to be a dangerous provocation. Iran never used Silkworms again in the tanker war, a shift that Garver attributes to Chinese intervention.
China again intervened against Iran during Iran’s disagreement with the international community on its nuclear program in the 2000s as noted above. Although China rhetorically and economically supported Iran, it eventually backed international sanctions against Iran, with leaked diplomatic documents showing that Beijing also privately exerted pressure on Iran to negotiate with the international community. This was important because Iranian economic sanctions eventually caused significant challenges for Chinese companies attempting to do business with Iran. Although many Chinese companies found ways to circumvent the sanctions regime, China’s decision indicated that broader regional-security concerns supersede its economic interests in Iran. This did not go unnoticed in Iran, with an editorial in Aftab-e Yazd complaining in 2009 about China’s perceived lack of support for Iran on the Security Council, noting that:
Four anti-Iranian resolutions have been issued, not only have the Chinese not used their right of veto in Iran’s favour but they were not even prepared to throw a vote of abstention into the Security Council urn to satisfy their Iranian friends. And yet at the same time the Chinese twice used their veto to block the condemnation of the leaders of Zimbabwe and Myanmar.
This frustration however does not appear to have been represented to China on an official level. In 2010 following the next round of UNSC sanctions, President Ahmadinejad criticised Russian support for the sanctions and declared that Russia would be considered a ‘historic enemy’ if it supported the US agenda on Iran. Ahmadinejad did not address China in the same statement, even though its UNSC vote was equally integral to the passing of the new sanctions. This suggested that Iran might feel disempowered from criticising its stronger partner out of fear of abandonment.
Relationship asymmetry may also have forced Iran to avoid criticising China’s treatment of Muslims in Xinjiang Province, even though Iran is normally a vocal critic of Muslim oppression around the world. Although Iranian actors have periodically attempted to establish ties with Xinjiang, Tehran has been careful not to antagonise Beijing. For its part, China has been aware that its treatment of the Muslim population in Xinjiang could complicate bilateral relations. For that reason, Beijing appears to have taken steps to placate Iran, giving high-ranking Iranian officials access to pro-Communist Party Chinese Muslims in order to assuage concerns about the situation in Xinjiang. In 1989, China hosted a government-supervised visit by the Iranian Supreme Leader Ali Khamenei to Xinjiang, during which he performed some limited religious services. Presidents Akbar Hashemi Rafsanjani and Mohammad Khatami also visited Xinjiang during their presidential terms. To Garver, China facilitated the visits to grant ‘those leaders a favor they ardently desired, thereby fostering “friendship” and creating a sentimental obligation that would make them more willing to comply with Chinese policy requests’ on Xinjiang more broadly.
The sense that Iran had acquiesced on the matter emerged after China’s crackdown on the July 2009 Urumqi riots that left more than 100 dead. Iran appeared to have little ability to protest the issue. The event caused outrage in Iran, with Grand Ayatollah Makarem-Shirazi condemning the attack and declaring:
The people of Iran expect the Iranian officials not to stay quiet on this matter and opt for a stronger stance. They [Iranian government] should not leave their Muslim brothers and sisters on their own.
An editorial in the Iranian Jomhuri-ye Eslami added:
One expects more of this revolutionary state, and the constitution of the Islamic Republic stresses this point, though one suspects political considerations between Tehran and Peking are preventing foreign policy officials from taking a clear position over events in Xinjiang.
Nonetheless, the Iranian response to the issue was muted, suggesting that Iranian officials had decided that a strong reaction did not serve the partnership’s interests. Instead, officials made token criticisms, such as comments by former President Rafsanjani, then head of the Expediency Council, to the Chinese Ambassador to Tehran: ‘The way you [the Chinese government] look at the Chinese Muslims will influence the country’s interaction and relations with 60 Islamic nations whose population is more than China’. In another meeting with the ambassador, Deputy Foreign Minister Hoseyn Sheikholeslam called on China to respect the rights of its Muslim population. The Iranian response went no further.
After three decades, the China-Iran partnership was moulded into a Great Power-Middle Power relationship par excellence, entrenched into patterns of interaction predominantly guided by the dual fears of entrapment and abandonment. Iran was so reliant on China that it rarely criticised its imperfect partner. And while China benefited significantly from its ties to Iran, it was concerned by the worst excesses of Iran’s international behaviour. In this regard, it was clear that Iran’s political baggage significantly limited the scope of cooperation.
The Belt and Road Initiative and the Coming of Age of the China-Iran Partnership
The patterns of engagement in the China-Iran relationship were well entrenched by the time President Xi Jinping announced the BRI initiative in 2013, raising the question of whether BRI would change the dynamics of the Great Power-Middle Power relationship. Although as the major investor in BRI, China would retain its power in the relationship, Iran’s importance grew significantly as it became both a transit country and a resource hub, raising the possibility that the China-Iran relationship might transcend the confines of a Great Power-Middle Power partnership in light of the increasing congruence in their economic interests.
The announcement of BRI represented a watershed moment in China’s Middle East policy, marking its decision to become a proactive player in the region for the first time. Within years of the BRI blueprint’s release, China’s naval forces were regularly visiting ports in the Persian Gulf, China had separately undertaken joint military exercises with both Iran and Saudi Arabia, and China was building its first overseas airbase in Djibouti. BRI’s Silk Road Economic Belt was central to China’s long-standing geostrategic goals, which aimed to establish overland hydrocarbon trade routes to reduce China’s reliance on maritime transit.
Iran sits at the geographic heart of the Silk Road Economic Belt. Although not mentioned in the project’s blueprint, China made it clear that Iran would be a key partner to the project. The Chinese President Xi declared that Iran and China were ‘natural partners’ on BRI and a Chinese state-owned newspaper dubbed Iran ‘an important fulcrum’ of the project. Iran welcomed the project and declared its willingness to cooperate with China. However, it remained to be seen whether BRI would be sufficient to reduce the partnership’s asymmetry, and allow the two states to overcome the dual risk of entrapment/abandonment. Indeed, history had shown that China’s military-strategic considerations overrode its economic interests.
Many factors coalesced during the period surrounding the announcement of BRI that suggested that Iran’s standing might significantly increase. In July 2013, the moderate Hassan Rouhani was elected to the Iranian presidency for his first term, pledging to enact prudence in Iran’s international relations, rebuild the country’s ailing economy and pursue productive ties with Iran’s neighbours and the United States. More specifically, Rouhani seemed to be drawing a line in the sand from the hard-line presidency of his predecessor Mahmoud Ahmadinejad, declaring in his victory speech a ‘victory of wisdom, a victory of moderation, a victory of growth and awareness and a victory of commitment over extremism and ill-temper’. China responded positively to President Rouhani’s election, with a Foreign Ministry spokeswoman immediately declaring that ‘China will seize this opportunity to promote the development of bilateral cooperation’. The Chinese Minister of Culture Cai Wu attended Rouhani’s inauguration as the special envoy of the Chinese President.
Iran’s capital as a partner for China seemed to increase further by its signing of the P5 + 1 nuclear deal in 2015. As noted above, China had privately encouraged Iran to engage in the P5 + 1 process. In January 2016, President Xi became the first world leader to visit Iran after international sanctions were formally lifted. During the visit, China and Iran signed 17 economic accords and pledged that bilateral trade would be increased to US$600 billion by 2026, although Scott noted that such claims should be ‘taken with a pinch of salt….[because] the two countries seem inclined to exaggerate what is achievable’. Nonetheless, President Xi’s visit suggested that China would make the most of Iran’s new economic opening, and was welcomed by Iran in this endeavour. The Iranian Oil Minister Bijan Zanganeh enthusiastically declared that ‘Those who were our friend during sanctions will receive our friendship to the same proportion’ while President Rouhani said:
The Islamic Republic of Iran will not forget its friends, who maintained suitable relations with the Iranian nation under the difficult sanctions, in the new era. And we are sure that our relations with China are such that no other power would be able to affect the good relations between the two countries.
This pattern continued after President Xi’s departure. Months later, China and Iran signed a US$550 million deal to develop a large oil terminal on Qeshm Island in the Persian Gulf, and the Chinese firm Sinopec finalised a pre-nuclear sanctions deal to develop the Yadaravan oilfield. These deals were complemented by symbolic soft power measures—in October 2016, the Iranian Consulate-General in Ghangzhou Province arranged for 150 Iranian expats to donate blood to the province’s blood bank to mark Ashura. The Iranian Consul General in Guangzhou Alireza Salarian noted that the event signified the two states’ friendship. China was also among the first countries to offer assistance following the November 2017 Iran-Iraq earthquake that killed hundreds in north-west Iran. President Xi sent condolences to President Rouhani, and a Chinese Foreign Ministry spokesman announced that ‘China is closely following the situation and willing to offer necessary assistance to the two countries in light of their needs’.
While the two countries’ economic relationship continued to grow, it seemed that little had changed in terms of the underlying currents that guide the Great Power-Middle Power partnership. On paper, the election of President Rouhani and the signing of the nuclear deal should have assuaged some of China’s concerns, but further developments suggested that Beijing remained deeply concerned about the risks that Iran posed to China’s international security.
This was evident during the June 2016 Shanghai Cooperation Organization (SCO) summit in Tashkent. The SCO is a regional organisation made up of Russia, China and a number of other states that aim to foster cooperation across mostly security and military issues. China and Russia are the body’s main decision-makers. Iran was granted observer status at the SCO in 2005, and has unsuccessfully sought formal admittance to the SCO on several occasions since 2008. Iran enthusiastically petitioned for full SCO membership throughout the presidency of Mahmoud Ahmadinejad, who viewed the SCO ‘as a geopolitical counterweight to the USA’. Ahmadinejad made several comments about the SCO’s potential to rival US power, declaring in 2007 that:
In addition to the preservation of peace in the region, [the] SCO can play an effective role in the promotion of international peace and security and dealing with threats as well as resisting unlawful interventions of global hegemony.
These comments were echoed by the Supreme Leader Ayatollah Ali Khamenei’s current advisor Ali Akbar Velayati in 2007 when he explained that the ‘SCO was created mainly to counter NATO expansion in the East and Iran has a significant role to play in fulfilling such a goal’. Such goals are consistent with Russia’s vision for the SCO, which would lead to the organisation becoming the ‘NATO of the East’, but contrasted sharply with China’s position, which views the organisation as a benign platform for intra-regional cooperation and integration. Indeed, China’s state-owned Ta Kung Pao published an article in 2008 titled ‘It is Inadvisable for the SCO to Accept Iran as Member’. The article went on:
If the SCO accepts Iran, it may not obtain clear advantages but this can provide certain excuses to the United States and its allies. It could give them the opportunity to put pressure on China and Russia and demand that these two countries help resolve the crisis triggered by Iran’s development of nuclear programme.
Chinese officials have not publicly commented on the issue. However, Iran’s application was repeatedly rejected by SCO member states on the grounds that a state subject to international sanctions could not be admitted as a member. This was thought to also reflect concern that Iran would use the body as a tool to provocatively pursue anti-US goals.
By the 2016 Tashkent summit however, Iran’s nuclear issue had been resolved and international sanctions officially lifted. The Russian President Vladimir Putin had signalled that Russia supported Iran’s membership, declaring that ‘We believe that after Iran’s nuclear problem was solved and United Nations sanctions lifted, there have been no obstacles left’ to Iran’s SCO membership bid. Yet Iran’s membership application was rejected without explanation, with observers suspecting that China had blocked the process. This suggests that even though Beijing-Tehran ties were economically closer than ever, Beijing’s long-held concerns about Iran’s proclivity for international provocations may not have been assuaged, leading it to stand in the way of Iran’s efforts at projecting anti-hegemonic power through a regional body. Consistent too with Iran’s history of avoiding criticism of China, Iranian leaders denied that the application was rejected, with Deputy Foreign Minister Ebrahim Rahimpour claiming that Foreign Minister Javad Zarif had left the SCO meeting early to pray, rather than out of protest. In 2017, a senior Chinese diplomat clarified that ‘China welcomes and supports Iran’s wish to become a formal member of the SCO’, but the 2017 and 2018 SCO summits both closed without an upgrade to Iran’s membership status.
Despite Iran’s signing of the nuclear deal and attempted normalisation of relations with the international community, a number of developments took place that suggested that China’s entrapment concerns continued to be well founded. In February 2017, Iran’s international provocations led to Chinese nationals being formally sanctioned by the United States. That January, Iran tested a medium-range ballistic missile for at least the fifth time since the nuclear deal had been signed. While the tests may seem inconsistent with the message of neighbourly cooperation promulgated by President Rouhani, it highlighted that the Islamic Revolutionary Guards Corps would continue to act independent of Iran’s elected bodies and undermine Rouhani’s foreign policy agenda. The tests were widely condemned by the international community, with US President Donald Trump approving unilateral US sanctions on 25 individuals and companies, including two Chinese companies and three Chinese nationals linked to the ballistic missile program. The following May, the US Department of the Treasury announced additional sanctions on seven new targets, four of which were Chinese. Although Ku noted that in doing this, the USA demonstrated somewhat of a double standard as sanctions on Chinese companies trading with the North Korean arms industry were rarely enforced, it was clear that Iran remained a point of risk in China-USA relations.
China condemned the sanctions, with Foreign Ministry Spokeswoman Hua Chunying complaining:
China is opposed to the blind use of unilateral sanctions particularly when it damages the interests of third parties. I think the sanctions are unhelpful in enhancing mutual trust and unhelpful for international efforts on this issue.
Given President Trump’s hawkish position on Iran, Jin argued that:
Chinese actors may [continue to] serve as a logical target for undermining Iran’s ballistic missile tests due to a documented history of disguising and shipping equipment to Iran that bolsters its missile program and which, under current international restrictions, Tehran cannot acquire on its own.
This would lead to the exact scenario that China has sought to avoid over the course of the relationship.
The situation worsened further in April 2018, when the US Department of Justice opened a formal investigation into the Chinese telecommunications giant Huawei in relation to its alleged violation of US sanctions on Iran. The announcement took place a week after all US firms were banned from trading with ZTE Corp, also because of the latter’s interactions with Iran. The ZTE Corp decision represented a significant blow to China. ZTE employed 75,000 staff, and as the country’s second-largest telecommunications equipment manufacturer was heavily reliant on US companies such as Qualcomm, Broadcom Inc. and Intel Corp for parts. The ban was so significant that ZTE announced that it would be forced to cease operating. Although a flurry of lobbying and fierce Congressional debates led to the ban being lifted months later, the message was clear: Chinese companies should weigh up the relative importance of the US market before taking risks in dealing with Iran. This lesson would become even more pertinent following the US’s May 2018 withdrawal from the nuclear deal and the renewal of sanctions. Although China would be well placed to benefit from the subsequent international withdrawal from the Iranian market, as it had done in the past, doing business with Iran was not without risk. Such developments largely vindicated China’s caution regarding entrapment, and will likely be a major obstacle for the expansion of the partnership, despite the promises of BRI.
Conclusion
China’s initiative represented a new opportunity for the expansion of the China-Iran relationship. The two countries had enjoyed ties for decades on the basis of shared anti-hegemonic goals and a desire to shield themselves from international pressure. This has been an effective arrangement that frequently paid off for Iran by mitigating its international isolation. It gave China a role to play in the region as well as obvious economic benefits. However, the built-in asymmetry in the Great Power-Middle Power partnership creates important intra-partnership power dynamics. Although China valued its ties with Iran, it also demonstrated concern about Iran’s international behaviour. China has been risk-averse in the Middle East and Iran continues to be a volatile partner.
BRI looked as if it had the potential to accelerate the expansion of the China-Iran relationship by strengthening Iran’s hand and encouraging China to forgive its international activities. The relationship gained momentum in Iran’s newfound moderation in the international arena, which was supported by the election of President Rouhani and the 2015 nuclear deal. To this end, the two countries energetically pursued new economic contracts and military ties in order to rebuild the ancient Silk Road. Although the projects would face significant challenges in traversing Central Asia, the two countries have appeared nonetheless committed to the project.
In the final analysis, however, the imperatives of BRI have not been enough to fundamentally change the Great Power-Middle Power relationship, in which regional-security concerns continue to override economic concerns. Although trade ties continued to grow, China rebuked Iran at the SCO, and will likely proceed with caution now that its companies and nationals have been directly impacted by Trump administration sanctions. President Donald Trump’s decision to withdraw from the Iranian nuclear deal in May 2018 further highlighted the precariousness of China’s position. While its previous sanctions-era relationship and BRI placed it optimally to deal with Iran, China would tolerate only a finite amount of risk. These bilateral dynamics are therefore deeply entrenched in China and Iran’s Great Power-Middle Power relationship, and will continue to prove a barrier to the elevation of the partnership to a more even or extensive arrangement.