China’s long-running pursuit of infrastructure projects in Iran is set to continue despite intensified US sanctions as the Islamic Republic battles the novel coronavirus, Analysts say.
China is Iran’s largest crude oil customer and a top trade partner. It regards the Middle Eastern powerhouse a key destination in China’s trillion dollar Belt & Road Initiative involving huge infrastructure projects connecting Asia to Europe and beyond.
“The stalling of Iran’s sanctions-hit economy as it battles the coronavirus is unlikely to stop China’s long-running pursuit of infrastructure projects in the Islamic Republic,” the Voice of America (VOA) said on Tuesday, citing analysts.
For years, China has been investing in Iran’s energy and transportation sectors. Some of the ongoing projects include China’s redesign of a heavy-water nuclear reactor in Arak and involvement in building a high-speed train line linking Tehran to Qom and Isfahan, which is set for completion next year.
Beijing’s biggest transportation project in Iran is worth $1.5 billion to electrify the rail line from Tehran to Mashhad for a length of 926 kilometres.
China also plans to build a petrochemical park in the southern Iranian port of Chabahar, while its energy companies CNPC and Sinopec are shortlisted to carry out further development of giant Yadavaran and Azadegan oilfields in southwest Iran.
However, some of the projects have been put on ice. Last year, China National Petroleum Corp (CNPC) abandoned developing phase 11 of the giant South Pars gas field. Iran’s Minister of Petroleum Bijan Zangeneh also said in February that Sinopec was not continuing work in Yadavaran, while Chinese companies facing US pressure withdrew from the Tehran-Shomal Freeway project connecting the Iranian capital to the northern province of Mazandaran.
Further uncertainty in Chinese projects has been created amid the spread of the coronavirus which has shut down parts of Iran’s economy and forced Iranian authorities to close non-essential businesses.
Chinese state media have reported that at least 473 mostly business people and workers were flown back to China from Iran on several direct charter flights in the first half of March.
Some Chinese companies had been scaling back their ties with Iran even before the pandemic, in order to avoid violating US sanctions.
Pursuit of War by Other Means
The spread of the coronavirus has not slowed the regular drumbeat of successive layers of sanctions imposed by the US on Iran. Just over the past two weeks, the US government has imposed three rounds of new sanctions targeting companies and individuals for doing business with Tehran.
US leaders say sanctions are “humane” alternatives to waging war for foreign policy objectives. Mark Dubowitz, an Iran hawk with the Foundation for Defence of Democracies policy group, wrote in Foreign Policy magazine Tuesday that the coronavirus “is absolutely no excuse to lift sanctions on Iran”.
In an article, Dubowitz argued that sanctions relief would only make the US government’s “challenges” vis-à-vis Iran worse. “So would a $5 billion International Monetary Fund bailout requested by Iran,” he added.
The Trump administration has ignored a chorus of appeals by world leaders, including the UN chief, European leaders and dozens of US lawmakers, for a suspension of economic sanctions at a time when all of humanity is facing a common, invisible, enemy.
Last week, leading US newspaper The Washington Post admitted that the sanctions have hampered Iran’s efforts to import medicine and other medical supplies needed to fight the coronavirus pandemic.
Iran’s death toll from the coronavirus reached 3,036 on Wednesday, with 138 deaths in the past 24 hours, Health Ministry Spokesman Kianush Jahanpur said, adding that the country had 47,593 infected cases.
“We had 2,987 new cases of infected people in the past 24 hours and 15,473 people have recovered from the disease,” he said.
Iran’s Geopolitical Significance
Many observers believe the Trump administration sees the outbreak as an opportunity in line with its “maximum pressure” campaign which seeks to pry away countries such as China from Iran.
However, they say the draw down in Iran is temporary and Chinese companies are set to return to the country.
“When it comes to the pandemic in Iran, China probably wants to just put things on hold, if not finish some of these remaining projects they started, because they want to stay in Iran,” Alex Vatanka, Iranian Analyst at the Washington based Middle East Institute, said.
“Iran is potentially a lucrative market for China, which wants to keep its stranglehold on that market and keep out rivals. Why would you let the Germans or anybody else come in and take that away?” Vatanka said.
“China also does not want to see the Islamic Republic fall because of American pressure, an outcome the Chinese would read as a net loss for themselves, geopoliticaly.”
Beijing has pushed back against the United States, saying China’s cooperation with Iran is legitimate under international law and should be “respected”.
US officials are reportedly working behind the scenes to pressure China into halting all its oil and condensate imports from Iran.
The Trump administration has pledged to bring Iran’s oil exports down to zero, but the shipments have continued to reach major customers, especially in Asia.
The US Government has already imposed sanctions on a number of Chinese Companies, including state-owned energy company Zhuhai Zhenrong & Cosco Shipping Corporation subsidiaries, for shipping Iranian Crude Oil.
Beijing has reacted strongly, calling for the US to halt its sanctions on and pledging to “resolutely protect the legitimate interests of the Chinese companies” for maintaining business ties with Iran.