The 25-year, $400-billion deal between Iran and China is a further sign that Trump and Netanyahu’s strategy toward Tehran was a dismal failure
More than its declaratory significance, and more than its potential geopolitical importance, the newly signed “comprehensive strategic partnership” between China and Iran is a testament to the dismal strategic policy failure by both the United States and Israel.
Former U.S. President Donald Trump’s Policy of exerting “maximum pressure” on Iran, egged on and cheered enthusiastically by Prime Minister Benjamin Netanyahu, produced the following: Iran now has 12 times the amount of enriched uranium it had in 2015 when the nuclear deal was signed. Iran just signed an extensive strategic agreement with China. Iran has a proxy military presence in the southern Golan Heights, near the Israeli border.
For a policy celebrated triumphantly as reneging on “a bad agreement” and applying maximal pressure to bring about the collapse of the Iranian economy, destabilize the regime and force behavioral change, the results are embarrassingly minimal.
What’s more, the United States is now setting in motion principles and a formula to reenter the nuclear deal (formally known as the JCPOA), against Israel’s better judgment.
The Chinese-Iranian agreement is not just about the Iran nuclear deal, but a larger, quadrilateral strategic structure composed of the United States, China, Israel and Iran. Think of it as a complicated Venn diagram: the United States and Israel are close allies; China is becoming a major Israeli trade partner and investor; China just signed a strategic partnership deal with Iran; Israel views Iran as a major, perhaps existential, threat (if nuclearized); the United States regards China as a major adversary and challenge; China feels the same about the United States.
There are two ways and approaches to look at and analyze this development.
From one perspective, a 25-year, $400-billion agreement between China and Iran, including energy and military components, should never be taken lightly or dismissed by either the United States or Israel, even if it only goes into effect in two years.
It proves that Iran is far from collapsing under the weight of the rigid and harsh sanctions reimposed by the United States after Trump’s unilateral withdrawal from the nuclear deal almost three years ago.
It also serves notice to the United States, Europe and Israel that Iran has found a powerful ally and mentor that breaks whatever isolation Trump and Netanyahu deluded themselves into thinking Iran would be locked in. Both China and Iran have a vested interest, albeit on a different scale, in weakening the United States. This is diametrically opposed to Israel’s fundamental interest: a strong, respected and involved America.
A second perspective sees the agreement as an integral part of Chinese foreign policy, and not necessarily a central part. China has no interest in regional military flare-ups, not to mention getting itself entangled in one, thus jeopardizing investments. China has an interest in lower oil prices, while for Iran’s economy, a higher price is a prime interest.
Furthermore, China values its technological relationship with Israel, and it’s doubtful it would endanger that by supplying Iran with the highly advanced anti-ship missiles Tehran wants. The cost-effectiveness of this probably doesn’t make sense to China.
Iran is among the 140 (yes, one hundred and forty) countries that have signed a bilateral memorandum of understanding, making it a member of the Chinese Belt & Road Initiative (the BRI). Of these, 17 countries are in the Middle East or North Africa.
The Chinese-Iranian agreement is essentially part of the BRI, a Chinese foreign and trade policy whose strategic objective is to gradually connect Asia with Africa, the Middle East and Europe through a network of land and maritime routes and ports.
The ostensible idea is to create greater economic access, improve regional integration through the good services of China and streamline supply-chain lines. But the explicit underlying goal is to project China’s economic and political power, enhance its presence, create diplomatic and trade leverage, and promote its interests.
Originally known as the “One Belt One Road” Policy, BRI was announced by President Xi Jinping in 2013, modeled on the Han Dynasty’s “Silk Road” of 2,000 years ago.
The Silk Road Economic Belt links China to Southeast Asia, Russia and Europe by land. The Maritime Silk Road connects China’s ports with South Asia, the South Pacific, Eastern Africa, Europe, the Eastern Mediterranean basin and, most relevantly, the Middle East.
In this elaborate Chinese map, Iran is arguably part of both “Roads”: land and sea.
BRI involves large and long-term investments in infrastructure: ports (building and upgrading), roads, railways, airports, telecommunications, power plants and the entire support, auxiliary and maintenance structure around them.
The emphasis is to identify “high quality investments,” then proceed to finance them, mitigate risks, create dependency and provide deliverable financial and political yields to China.
This is where the Iran agreement has substantial geopolitical implications, if it is followed through by China.
The agreement states that China will buy cheaper oil in exchange for major infrastructure investments in foreign investment-impoverished Iran.
Oil makes up 20 percent of China’s energy consumption (coal represents a further 58 percent). In 2020, China consumed 14.5 million barrels of oil a day; 44 percent originated in the Middle East, 16 percent of that coming from Saudi Arabia. Iranian oil comprised just 3 percent of China’s imports, down from 8 percent as a result of direct and secondary sanctions by the United States.
By the end of 2020, after the United States had withdrawn from the nuclear deal and Iran had resumed enriching uranium up to a 20 percent level, China increased its oil imports from Iran to 1 million barrels a day which is half of what Iran exports. This is not insignificant.
The agreement, combined with renewed efforts by the Biden administration to begin negotiations on the JCPOA, places Israel in an uncomfortable situation: Paradoxically, Iran is where the U.S.-Chinese rivalry may find common ground. Specifically, the nuclear deal, to which China is of course one of the signatories.
A continued “maximalist” Israeli policy may backfire. When Israel Defense Forces Chief of Staff Lt. Gen. Aviv Kochavi expresses publicly Israel’s opposition to “any deal,” or when Maj. Gen. Tal Kelman, head of Israel’s “Iranian Command,” announces arrogantly that “Israel can destroy Iran’s nuclear program entirely,” the United States and China take note.
Whether Israel can or cannot, will or will not, is immaterial. The point is the timing and the weight of such a public statement. The idea that these two statements were even made, coupled with Tehran’s China agreement, is proof that the policy of the last two to three years produced little, and exhausted whatever usefulness it had.