Tehran-Beijing partnership: Probability and implications
Tehran-Beijing partnership: Probability and implications
WRITTEN BY VIGNESH KARTHIK KR AND VIHANG JUMLE
13 October 2020
Iran and China are gradually inching towards the signing of a twenty-five-year economic and security partnership deal. This partnership would allow China to significantly increase its investments in railways, banking, telecommunications, and other regional projects, in exchange for an uninterrupted (and rumoured) discounted supply of Iran’s only economic front burner — crude oil.
While Beijing first pitched the deal to Tehran in 2016, it has since been argued that the arrangement was discretely developed over a number of years. The deal, which has surfaced now, albeit as an 18 page leaked document, also mentions deeper military cooperation.
For all its controversy, the deal is not yet a reality as neither Tehran nor China has accepted or confirmed the legitimacy of the recently leaked document. Additionally, Iran’s enthusiasm for the deal was met in China by a lukewarm response. That said, a strengthening of the Tehran-Beijing relationship should not come as a surprise, as years of United States pressure has left Iran with little choice but to find new allies. Nevertheless, the mere possibility of such a strategic relationship should warrant immediate attention from India, Pakistan, and the United States.
Why Iran is looking east
Iran is reeling under a deep socio-economic crisis owing to the re-imposition of sanctions by the United States in 2018. High unemployment, soaring food inflation, and rising living costs have sparked anti-government demonstrations as well as human rights violations. Cut off from trade with most of the world, Tehran has been seeking alternative partnerships beyond the United States and its allies. The ongoing COVID-19 pandemic, poorly managed by Iran, has exacerbated its need for new economic partnerships.
Iran’s location on the western periphery of the Indian subcontinent provides China strategic depth in relation to India in addition to providing the ability to mount pressure on the Middle East and the United States.
A spate of cyber-attacks on its defence infrastructure in mid-2019 hackers said to be based in the United States, further demonstrated to Iran the need to enhance its defence resilience. No country has claimed responsibility for these attacks, but the threat of cyberwar looms on the Iranian-American horizon.
Iran has also felt compelled to test new waters after so many of its traditional allies have succumbed, one by one, to US pressure. Now that India, for instance, has grown closer to the United States, the Chabahar port deal (in the works for at least a decade) has now been shelved. India has also withdrawn from occupying a larger role in Afghanistan, which, in turn, mirrors America’s retreat. Most significantly, in May 2019, India stopped the purchase of Iranian oil.
China has since stepped in to exploit this vacuum and provided Iran with some much-needed economic respite. Conversely, in China, Iran hoped to find a consumer with a lasting appetite for oil — it has not disappointed. Despite sanctions, China has not just continued its purchase of Iranian oil but now ranks as its top customer. Teheran can see in this opening of trade an opportunity to pursue its regional ambitions, including the possibility of establishing a 'land bridge’ to the Mediterranean.
Iran once fostered trade ties with Pakistan, China, and India, of these, only China remains a viable option — and it remains an economic powerhouse. Freshly recovered from the COVID-19 setback it is likely to drive the world’s energy demand. In China’s growing clout beyond Asia, may lie an opportunity for Iran too to influence regional politics. The potential of a twenty-five-year trade deal laced with anti-American sentiment has both economic and strategic advantages.
China continues to seek opportunities to deepen its Belt and Road Initiative, and has considerable resources at its disposal which it could pour into Iran. Following financial and infrastructure investments in both Pakistan and Afghanistan, Iran could open the final door enabling China to enter west Asia. Beijing’s immediate goal would be to reduce its dependence on the Strait of Malacca (for energy transit), an area where it has become unpopular of late. A land route for oil through Hormuz would pose a range of implications, including the possibility of new security establishments in West Asia controlled by ‘the’ Asian power.
The possibility of an active civilian port being converted to a military outpost is not an improbable scenario. Such a communication and transport network designed to ‘encircle’ the Indian subcontinent has been the subject of much diplomatic chatter.
China already has a presence in Sri Lanka (in the form of the Hambanthota Harbour) and it is currently exploring the possibility of setting up a base in the Maldives. While the leaked document does not dwell on the BRI, at the very least, Iran could help diversify China’s fuel sources and reduce dependency on Saudi Arabia — amenable to American coercion. Iran’s domestic and regional impulses only serve to complete the picture. Engagement with China would help it stand up to Iraq, which by extension means the United States.
Indian interests
Iran’s location on the western periphery of the Indian subcontinent provides China strategic depth in relation to India in addition to providing the ability to mount pressure on the Middle East and the United States. Should the deal be realised, it would place India at a significant disadvantage. China would be in a position to undercut Indian influence and interests in Iran while securing an opportunity to sway the region’s politics. With a firm toehold in Iran, China would likely be emboldened to engage Pakistan and Afghanistan in a way that would alter regional dynamics in South Asia — again to the disadvantage of India.
In sum, China is watching India from the east right now, but soon, it may also peer at it from the west. If three of its prominent neighbours — Pakistan, Sri Lanka and Afghanistan — are swayed by China, what kind of strategic partnership or influence would India be left to wield?
India risks losing significant access to Central Asian markets that it can only access via Iran owing to India-Pakistan hostility. Chabahar was exactly such a route, opening as it does onto the western Indian coast. Should China beat India in this race it would mean losing not just a trade route — but markets. With additional leverage in the region, China would undoubtedly oversee the introduction of further security and economic hurdles for India. These, in turn, would merely build on the existing security burden created by Chinese military establishments around India.
While the United States may seek closer ties with India to stem its diminishing influence in Asia, increasing reliance on America, even a limited partnership, would increase India’s vulnerability. Therefore, creating a dedicated plan to engage with the Middle East is still the only way out. If revisiting the Iran strategy is off-limits, the so-called multi-dimensional relationship with Middle Eastern countries on issues such as energy, labour, trade, and the military front needs urgent attention.
DISCLAIMER: All views expressed are those of the writer and do not necessarily represent that of the 9DASHLINE.com platform.
Author biographies
Vignesh Karthik KR is a PhD student at the King’s India Institute, King’s College London. Before starting his PhD, he worked as a legislative research consultant for over three years in New Delhi. He was associated with Youth Forum on Foreign Policy, a youth-led initiative in the field based in New Delhi.
Vihang Jumle is a Project Officer at TRAFFIC - WWF India. An IT engineer cum data analyst by training, Vihang is working on developing tools to link technological tools to facilitate better research in the field of humanities and social sciences. Image credit: Wikipedia Commons.