Iran and China; After the sanctions

31 May 2014 | 22:42 Code : 1933630 Home Middle East. Asia & Africa General category

By Ali Khorram

On the first days after the Islamic revolution in Iran, people were still furious about the visit paid by the chair of boards of china’s communist party and their unconditional support of the former Shah. It was in 1982 when, thanks to hard attempts of the first Iranian ambassador in Beijing, the two countries removed the curtains and initiated a new chapter in bilateral relations. Political relations were rectified and the volume of transactions soared from $20m to $600m per annum. In 1985, Iran purchased light and heavy artillery and weapons from China to turn a new page in its confrontation with Iraq invasion on its territory.

The volume of business relations skyrocketed to approximately $30 billion per annum in the following years while political relations remained stagnant. Although the Iranian side desired to improve its strategic relations with both China and Russia, the other side demonstrated signs of reluctance. It should be reminded that previous visits were prompted by the fact that pre-revolution Iran held strong strategic ties with the US. That situation meant a lot for Chinese authorities. However, after Iran loosened its bonds with the western superpower, the eastern politicians lost enthusiasm. Consequently, business incentives overtook political ones.

While talking about expansion of relations between the two nations, Iranian economic and political planners need to take their former experiences into account. A conservative China would try not to jeopardize its capital and position in the world arena simply by tying knots with those countries which openly confront the US, or even Israel. A simple glance at the volume of trade between china, the United States, and the European Union puts a seal of approval on this assertion.

Of its total international trade, China holds 19% and 18% with the US and the European Union, respectively, whereas its relation with Iran accounts for just a tiny share of 0.1%. The economies of China and the US are so interrelated that any blow on one can severely affect the other. Besides, these figures prove that China will never prefer Iran to the west in its economic and trade views.

A decade ago, China and Russia decided to open a new front against the expansion of NATO in the east. They held Shanghai Economic Forum and cautiously invited Iran as the observer. Since Iran was suffering from various sanctions and pressure of UN resolutions, and, at the same time, Israel and the US kept threatening it, this country welcomed the idea. Shanghai Economic Forum is a political security treaty now and hosted Iranian president recently. In a framework of moderation, Dr. Rouhani pursues constructive interactions with the world in his foreign policies. At the time being, priorities in foreign policy are totally different from those of the 9th and 10th administrations and Iran is not obliged to look merely towards east.

In fact, exclusive look at the east, either a choice or an obligation, will fail to meet our national interests. In such an outlook, China will find it easy to gain economic advantages and benefits in Iran. The peculiar conditions which happened during sanctions and disconnection between Iran and the west led to imbalances in Iran’s foreign policies in its relations with China and Russia. These two countries used to assume that since Iran, in general, and the central bank in particular, were internationally sanctioned, it was almost impossible for Iran to sell its oil. At that time, the relations between the two countries had more a business nature than political or economic. Both public and private sectors in China sought the opportunities to make maximum profits in their deals with Iran. The contracts made concerning some economic projects were unduly in favor of the Chinese part.

In addition, Chinese products with the least quality were exported to Iran and aroused dissatisfaction of both consumers and producers in Iran. It meant that Iranian assets were being wasted. The Chinese companies abused sanctions against Iran to their own benefit and in most cases refused to fulfill their commitments even when they received their requested funds. There exist plenty of complaints made by Iranian businessmen against their Chinese partners in the chamber of commerce, ministry of commerce, ministry of foreign affairs, and Iranian embassy in Beijing.

There is no doubt that Dr. Rouhani is expected to reorganize Iran-China relations and put an end to imbalances so that the two countries can pedestal their relations based on mutual respect and interests. For its own part, China is also expected to act immediately and restore its former credibility; otherwise, it will lose its current business and economic position in Iran. It is quite obvious that both China and Russia would not welcome Geneva agreements and settlement of Iran nuclear disputes. It is the responsibility of the ministry of foreign affairs to diversify its foreign policies with regard to relations with both west and east so that economic, industrial, and business interests of Iran can be realized and the rights of Iranians, whether consumers or producers, can be protected. China is in great need for energy on its way towards occupying the first position in the world. As the second largest oil importer, this country currently needs 4 million barrels a day and it is predicted that its demand will rise to 7 million barrels a day by 2020. China considers Iran as its first priority to satisfy its need for energy.

*Note: This article first published in Tejarat-e-Farda weekly magazine.