Xi Jinping’s visit to Saudi Arabia caused a shock for Iran. China unexpectedly stood with Saudi Arabia and the other Arab countries on two big issues. The Iranian regime, which is facing its lowest level of domestic legitimacy and international acceptance, seems to have lost China as well.
The Chinese leader published a joint statement with the government of Saudi Arabia in which he asked Iran to cooperate in the controversial nuclear case and avoid interfering in the affairs of neighbouring countries. To make matters worse, Xi signed another statement with the governments of the Gulf Cooperation Council supporting the United Arab Emirates in its dispute with Iran over three islands.
Since the signing of the JCPOA nuclear agreement, Iran has been interested in realizing Supreme Leader Ali Khamenei’s dream of a “turn towards the east”, but it has not been able to do so.
Khamenei’s failed dream
Khamenei thought that expanding cooperation between Iran and Russia and China, two superpower members of the UN Security Council, would be as beneficial as cooperation with the West – without the need to adhere to human rights conditions. Those countries do indeed provide Iran with weapons to suppress protests and technology for wiretapping and imposing restrictions on the internet, while Iran has recently been supplying Russia with drones to attack Ukraine.
The signing of a draft 25-year cooperation agreement between Iran and China in the last months of the administration of former President Hassan Rouhani was the result of a visit by Xi to Tehran for talks with Khamenei, a month after the implementation of the JCPOA began in February 2016.
Cooperation agreement gave control to China
After conflicting reports about the transfer of Iran’s resources in the Persian Gulf to China raised concerns about the nature of the cooperation agreement, Rouhani’s government announced that the provisions of the agreement were “confidential” at China’s request and that the government would not send it to parliament for approval or even reveal its content after it started to be implemented.
While the pandemic made it difficult for Iranian officials to contact China directly because of its foreign minister’s avoidance of face-to-face meetings, the draft of the 25-year contract was leaked in Iran.
The leak showed that the Chinese government would buy Iranian oil, which was now under US sanctions, at a cheap price for 25 years - but revealed that China would enter all government departments, from the construction of airports to telecommunication equipment, ports and the country’s vital infrastructure as a whole, and would exert control over them.
US sanctions deter Chinese companies
The leak of the agreement caused China to make changes to it, which were still kept hidden from the public. But finally the draft agreement was signed by the two countries’ foreign ministers. However, Iran failed to win China’s support for the JCPOA agreement, from which the United States had withdrawn.
Iran was forced to sell oil to China for less than the market price to avoid US sanctions. When Russia was in danger of an oil embargo for attacking Ukraine and Europe refused to buy its oil, the situation became even more difficult for the Islamic Republic.
Russia tried to replace cheap Iranian oil on the Chinese market. During this period neither China nor Russia had any motivation to lift the Iran oil embargo. Chinese companies are cooperating in a wider market in the region, and the threat of sanctions for working in Iran is a powerful deterrent.
Since the return of US nuclear sanctions against Iran in spring 2018, dozens of Chinese companies have been sanctioned for cooperating with Tehran, some of which were founded by Iranians, but China became the target of sanctions as the host of these companies; even its nationals have been involved in US legal cases.
Signs of China withdrawing from Iran
China’s withdrawal from cooperation with Iran has been happening for a while, but its signs are now becoming clearer. The critics of the destructive policies of the Islamic Republic say that China’s joint statements with Saudi Arabia and the other Arab countries show that the economic giant has abandoned Iran. But state media say this merely shows that Iran didn’t sell itself to China in signing the 25-year cooperation agreement.
What Iranian citizens have now correctly realized is that even the Chinese government, which is a politically closed and autocratic government, does not defend the Islamic Republic, and is following a route separate from that of the from the ruling regime in Iran.