Revitalising Iran-China relations: impacts of the Iranian delegation in Beijing

The economy of the Islamic Republic of Iran, despite decades of sanctions levied by the United States and assorted Western powers at the most fundamental cornerstones of its financial system, has proved to be one of the most resilient, and, indeed, recently reported to be one of the strongest, economies in the Middle East. A recent trip by President of the Islamic Republic Ebrahim Raisi to visit Chinese President Xi Jinping has sought to further this growth, both at the present and well into the future.

One of the main issues of business was the drafting of joint plans of action by both states to help implement the 25-year cooperation alliance between the two countries, signed in 2021. The agreement, according to a draft obtained by the New York Times, suggests in return for a $400 billion investment by China into Iran’s economy (primarily into Iranian oil, gas, and petrochemical industries) over the period of a quarter century, Iran will supply heavily-discounted oil to the world’s second-largest economy. However, issues have arisen over the effective implementation of such a treaty – China only invested $162 million in the last year of Raisi’s presidency, a far cry from the yearly goals outlined in the agreement. Additionally, sanctions implemented on Iran over its nuclear programme and its supply of drones to Russia during its invasion of Ukraine have been seen as an impediment to the development of new contracts and projects as part of the pact – as such, Raisi’s delegation includes Iran's chief nuclear negotiator, Ali Baqeri Kani. Further, tensions still underly the relationship between the two on account of China’s siding with the Gulf Cooperation Council’s statement that questioned Iran’s territorial sovereignty over islands in the Strait of Hormuz (namely, Abu Musa which is also claimed by the United Arab Emirates); unsurprisingly, however, discussions on this dispute remained absent from bilateral meetings between the two.

Iranian frustration towards China’s apparent apathy towards progressing this deal may be a result of wider geopolitical machinations, primarily the Russian invasion of Ukraine. Following severe Western sanctions imposed over its war, there was widespread speculation that such economic pressure would push Russia into finding alternative customers for its oil, with China more than happy to honour its commitments to a fellow original signatory of the Shanghai Cooperation Organisation (SCO).

Indeed, progress was limited. President Xi signed agreements that readily articulated Chinese support for reviving the nuclear deal, and expressed willingness to expand cooperation with Iran in areas of trade, agriculture, industry, and infrastructure. But as for formal commitments towards the honouring of the pact, including the foreign investment target, evidence of this is scant. Analysts have suggested that this may be a result of Iran-China relations being but a subchapter of the wider, more important relations between China and the US, with the former not willing to violate US sanctions on Iran.

For what the delegation hoped to achieve, it seems as though progress for the Islamic Republic was limited. Chinese commitment to the original terms of the nuclear deal, at a time when the US, even under President Joe Biden, is seeming to hold onto the cards provided to him by former President Donald Trump, does provide the political clout and weight needed by Iran if negotiations are to go forward. However, Iran-China relations cannot be observed ceteris paribus – despite China’s increasing isolation from Western states following allegations of espionage, ties between the two are simply part of a larger web, the crux of untangling which can largely be resolved through a resolution to the nuclear issue.