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Iran-China accord ushers in major geopolitical shift

Mar 30,2021 - Last updated at Mar 30,2021

The signing this week in Tehran of a 25-year comprehensive strategic cooperation agreement between China and Iran is a major breakthrough for the two countries and will have long-term effects on the geopolitical balance of the Gulf and the region as a whole. Following five years of negotiations the inking of the deal, which covers various economic, political and security sectors comes at a time when relations between Beijing and Washington are at their worst. It also puts Tehran in a strong bargaining position in relation to the shaky nuclear deal and the West’s attempt to renegotiate and expand it.

The agreement, parts of which remain undisclosed, will release $400 billion of Chinese investments over 25 years in return for a regular supply of low-cost Iranian oil. The impact of the deal on the struggling Iranian economy will be enormous and will lessen the effects of US imposed economic sanctions. The proposal for a strategic alliance between China and Iran was made by Chinese leader Xi Jinping in 2016, but Iranian leaders hesitated to embrace it for fear that it will affect the newly-signed nuclear deal.

But the signing this week of what amounts to a treaty testifies to the failure of Trump's administration policy of “maximum pressure” on Iran. It leaves his successor, Joe Biden, in a difficult position vis-à-vis rejoining the nuclear agreement unconditionally as Tehran demands.

The pact, which will allow China to put 5000 security and military personnel on Iranian soil, is a regional game changer. Before China, Tehran had signed a 10-year cooperation agreement, especially in the nuclear field, with Moscow in 2001 that had since been renewed twice. Two years ago Iran joined naval exercises with Russia and China. The latest accord will allow China to have a presence in the Gulf region as well as Central Asia. In return Iran will have access to Chinese technology and investments in its poor infrastructure. The two parties will invest in a free industrial zone close to the Strait of Hormuz.

The Chinese have been strengthening economic ties with other Gulf countries for years. China has signed cooperation agreements with the UAE and Kuwait and has good working relations with Saudi Arabia. The latest accord will raise red flags in Arab Gulf capitals. Iran continues to be a major source of instability in the region and its alliance with Beijing will only embolden the hardliners in Tehran and Qum.

Israel too will be feeling uneasy about the Chinese move. Both Russia and China, co-signatories to the nuclear deal, have supported Tehran’s position and openly violated US sanctions. The deal is a major step in China’s ambitious multibillion-dollar Belt and Road Initiative, which will allow China to become the largest global economy in a few years.

So far there has been no reaction from Washington. The signing of the accord will put the Americans and the Europeans in a difficult position diplomatically. The Iranians are likely to press in their rejection of any proposal to renegotiate the nuclear deal or expand it to cover Tehran’s long-range missile programme and its regional behaviour.

The event comes days after a failed US-China meeting in Alaska which saw a bitter war of words exchanged between the two nations. President Biden appears to be following in Trump’s footsteps taking a hard stand against Beijing.

The Iran-China deal has been attacked by the Iranian opposition for violating Iranian sovereignty. It is not clear yet whether Iran will allow China to have a permanent military base on its territory. China has shown interest in getting involved in regional issues; offering to host preliminary talks between Israel and the Palestinians. The recent accord will be seen as another attempt by foreign nations to fill the US vacuum in the region. Already Russia has established a number of military and naval bases in Syria and is active in Libya. Turkey is not shy about its territorial ambitions in northern Syria and in Iraqi Kurdistan. Ankara has a military base in Qatar.

Unlike the United States, China continues to be dependent on Gulf oil. It is certain that we will see a growing Chinese activity in the region as the US reduces its presence. Beijing has made it clear that its recent alliance with Iran will not affect its ties with the rest of Gulf countries.

Countries in the region will be under pressure, primarily by the US, not to get closer to China. The region, like in the 1950s, will be caught in a new Cold War between China and Russia, on the one hand, and the US and its European allies, on the other. This requires careful diplomatic balancing act by countries in the region as we witness major geopolitical aftershocks.


Osama Al Sharif is a journalist and political commentator based in Amman

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