CPC - Caspian Policy Center


chinese-iranian cooperation grows with a new 25-year agreement

Chinese-Iranian Cooperation Grows with a New 25-Year Agreement

Author: Leah Silinsky

Jul 20, 2020

On July 5, Iranian Foreign Minister Mohammad Zarif stated that Iran and China had reached a 25-year long “strategic accord.” Initially announced in 2016, the final agreement was released in June. With China as Iran’s main trading partner and investor in Iranian crude-oil exports, it should come as no surprise that the two countries have agreed on a joint economic and political pact. The two nations also share a common adversary, the United States.  

The Chinese-Iranian agreement would increase economic cooperation, intelligence sharing, and joint-security efforts between the two countries. It grants Chinese companies access to Iranian ports, bridges, railroads, and other infrastructure, with Iran supplying oil to China.  This agreement aims to further incorporate Iran into China’s Belt and Road Initiative (BRI), allowing China to develop strategic trade zones in Iran. Further, it allows China to increase its presence in the Middle East and Central Asia, despite disapproval from the United States. The agreement also functions as an attempt to circumvent the United States’ maximum pressure campaign on Iran by providing Iran economic support to undermine the effect of U.S. sanctions. This agreement is not only part of a larger pattern of growing Sino-Iranian cooperation, but also of Sino-Russo-Iranian partnership. With similar goals and a shared adversary, China and Russia have the incentive to cooperate as well. Iran is their key to the Middle East.  

The United States is attempting to prevent Iranian nuclear capabilities through its maximum pressure campaign. Through this new agreement, China is counteracting U.S. attempts to ensure that the Iranian government does not expand politically and military. This brings China the additional benefits of discounted Iranian oil and Iranian cooperation and participation in the BRI.  

Chinese President Xi Jinping first introduced the BRI during a visit to Kazakhstan in September 2013. The goal of what was then known as One Belt One Road was to increase Chinese political and economic influence from East Asia to Europe. Today, over 60 countries have agreed to BRI-related projects , including the geo-strategically located Central Asian states. The China-Pakistan Economic Corridor is one of the BRI’s most expensive projects that will connect China to Pakistan’s Gwadar Port on the Persian Gulf. Access to the Gwadar Port, strategically close to the Strait of Hormuz chokepoint, will grant China a strategic presence not just in the Persian Gulf, but also in the greater Middle East as well as in Central Asia. Iran is the connecting bridge between East, South, and Central Asia, as well as to the Middle East. Economic, political, and military support from Iran will grant China more access to the Middle East and the Central Asian states. 

Ultimately, China views Iran as a proxy with which to gain more support for its BRI. While many have commented that the Central Asian states welcome Chinese investment in the region, others have noted that many of the Central Asian countries are increasingly unable to pay back their loans from China. Coronavirus-induced economic upheaval has only made this more difficult for the Central Asian states.  

 China is the largest investor in the Middle East and Central Asia. China is the largest purchaser of Iranian crude, Iran’s largest trading partner, and invested $20 billion in Iran in 2019 alone. Sino-Iranian cooperation only aids China in its growing influence in Central Asia. By investing in this region, China not only gains access to gas and oil, but further dilutes an already dwindling U.S. influence. The Central Asia-China natural-gas pipeline connects China’s Xinjiang province to Turkmenistan’s vast natural-gas deposits via Kazakhstan and Uzbekistan.  

Ultimately, Iran will likely grow more dependent on China through the BRI and the 25-year pact. China is likely to continue investing heavily in Iran, with Iran supplying China discounted oil. Growing Sino-Iranian military cooperation will diminish the other Caspian states’ room to maneuver, especially when done in conjunction with Russia’s tacit agreement.  This is detrimental to U.S. interests because it undermines the U.S. maximum pressure campaign on Iran. The danger for U.S. strategic interests in the region is the growing Russia-China-Iran triumvirate.  

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