Iran-China: Pragmatic partnership despite U.S. sanctions

A huge earthquake shook the west of Iran on Nov 12. The disaster claimed over 500 lives, with thousands injured. China was one of the first to offer a hand. The Chinese Foreign Ministry’s Spokesman Geng Shuang said that they were ready to help Iran to overcome the consequences of the earthquake.

This is not the first time that China has helped Iran. It has always been near in hard times, especially in the 2000s, when Iran suffered from western sanctions. The United States and its western partners hoped that its pressure would kill the Iranians’ ambitions.

Their oil sector was crippled and they had no other way but to ask the Chinese for help.

Chinese-Iranian contacts began developed in 2000. In 2004, Sinopec of China and NIOC of Iran signed a $70bn deal to jointly develop Iranian oil fields. More specifically, the Chinese undertook to help the Iranians to develop the Yadavaran field, while the Iranians pledged to supply their Chinese partners with 250 million tons of LNG and almost 150,000 barrels of crude a day for 25 years. In 2005, the sides agreed to build a gas condensate and crude oil refinery on Qeshm Island in the Persian Gulf.

In early 2009, NIOC and CNPC signed a $1.76bn oil extraction deal.

Today, China has quite close contacts with Iran. In Jan-Oct 2017, its commodity turnover with Iran was $30.5bn - 22% bigger than a year before. China imports from Iran mostly crude and pays in yuan. Iran, in its turn, uses the money to buy goods from China.

The Americans were not happy to see such progress between Iran and China and, under Obama, tried to improve their relations with the Iranians by lifting some of their sanctions. The Iranians responded with certain concessions on their nuclear program, but they were pragmatic enough not to stop the program at all. They kept the examples of Iraq and Libya in mind and did not trust the Americans.

In Jan 2016, some of the anti-Iranian sanctions were lifted. A month later, Chinese President Xi Jinping visited Iran and met with his Iranian counterpart Hassan Rouhani and Iran’s religious leader Ali Khamenei. The sides signed as many as 17 documents on cooperation in science, engineering, customs and many other fields and agreed to enlarge their trade to $600bn in the coming decade.

Trump called Obama’s agreements shameful and renewed the United States’ sanction policy against Iran. He accused Iran of breaking its obligations concerning its nuclear program and supporting terrorists and extremists in the Middle East. And once again, the Iranians saw that they must not trust the Americans.

Today, they are diversifying their economy and are seeking to become attractive for investors.

Two years have passed since the lifting of the anti-Iranian sanctions, but the Europeans are doing nothing to enter the Iranian market - unlike the Chinese, who are very active in Iran. China and Iran are not economic rivals but pragmatic partners. Both believe that the world should not be unipolar.

China gives Iran a strategic priority in the Middle East and will continue to strengthen its ties with that country. For Iran, China is a great power with a weighty opinion on all global issues, particularly, Syria. Just like Iran, China supports the Bashar al-Assad regime.

One of the key projects of Iranian-Chinese cooperation is the Silk Road Economic Belt. Iran is involved in many more such global projects, including the North-South, a corridor that is supposed to connect Mumbai with St. Petersburg via Iran and Azerbaijan. Many see this project as a rival to the Silk Road Economic Belt and this annoys the Chinese. But Iran assures them that these projects may become partners.

In 2014, China and Iran signed a military cooperation agreement and a year ago, they agreed to jointly fight terrorism.

Today, Iran and China are committed to strengthen their ties. Both countries act quite pragmatically on the international arena. So, we can hardly expect any serious problems between them in future.

Farhad Ibrahimov, specially for EADaily