From March 24 to 30, Chinese State Councilor and Foreign Minister Wang Yi paid official visits to Saudi Arabia, Turkey, Iran, the United Arab Emirates, Bahrain and Oman. In Tehran, he signed a 25-year comprehensive strategic partnership agreement on behalf of the Chinese government. The agreement, which has attracted intense international attention, is widely interpreted as a form of strategic cooperation between Beijing and Tehran to confront the United States. But is that really the case? No.
In the first place, a long-standing tradition of China’s diplomacy is that the development of relations with any other country is not targeted at any third party. In fact, there have been news reports of a possible long-term strategic cooperation plan between China and Iran, with preparations for the accord starting well before the China-U.S. meeting in Alaska in March.
Equally important, 2021 marks the 50th anniversary of the establishment of diplomatic relations between the two countries. In China, people tend to celebrate their 50th birthdays in big ways because they believe that at 50 they will know “the decrees of heaven.”
Similarly, the 2006 Forum on China-Africa Cooperation was held to celebrate the 50th anniversary of the establishment of diplomatic relations between China and Africa. In 1956, Egypt became the first African country and the first Arab state to establish diplomatic ties with China.
Naturally, China and Iran signed the strategic cooperation agreement in celebration of their 50 years of bilateral relations.
Second, both China and Iran find it necessary to enhance bilateral relations. China’s economic development depends on imports of oil from Iran, and Iran is one of the important participants in the Belt and Road Initiative. For Tehran, China is more than a major destination in its policy of “Look to the East” and a major buyer of its oil; it is also an important source of support as it seeks to address economic issues amid heavy U.S. sanctions.
Terms disclosed about the 25-year deal indicate the need for stronger cooperation. According to the draft, for example, over the next 25 years China will invest $400 billion in nearly 100 projects in dozens of sectors in the country, including banking, telecommunication, ports, railways, healthcare and information technology, as well as beefing up two-way military cooperation. In turn, Iran will ensure a regular supply of oil for China. Also, China will help Iran build airports, high-speed railways, subways and 5G telecommunications infrastructure, and it will offer the new Chinese Beidou global positioning system. On national security, the agreement calls for joint training and exercises to respond to “terrorism, drug and human trafficking and cross-border crimes.”
It goes without saying that China and Iran also need each other’s diplomatic support. Due to its long-term containment and the maximum-pressure campaign launched by the Trump administration, Tehran is eager to expand its international diplomatic space and seek the strategic support of major countries around the world. At the same time, the fact that China signed the 25-year agreement with Iran in a high-profile manner after its contentious Alaska meeting with the United States makes a point.
Finally, given the special roles of the two countries in the current international landscape and in Washington’s foreign policy, the China-Iran agreement has boosted Tehran’s confidence in its diplomatic game with Washington and enhanced Beijing’s bargaining leverage as well, although it is designed to strengthen bilateral relations in the years to come and is not targeted at any third party.
For example, in the recently concluded multilateral negotiations on the 2015 Iran nuclear deal in Vienna, Iran maintained a rather tough position, demanding that the U.S. must lift all sanctions before Tehran returns to constraints on its nuclear capabilities as stipulated by the deal. Then on April 7, U.S. State Department spokesperson Ned Price made clear that the U.S. is prepared to return to compliance with the nuclear deal by removing sanctions on Iran, including those inconsistent with the nuclear deal. Although he did not give more details, the intention to lift sanctions has been considered a sign of U.S. concession.
In addition, one of the most troubling terms in the deal for the United States is that the Chinese yuan will replace the dollar in the China-Iran trade in oil. Obviously, if that takes effect and other oil-producing countries follow suit, the global dominance of the dollar will be significantly challenged.