The Chinese BRI and Iran

In an effort to achieve a dominant status in the international world order, the People’s Republic of China has been using its economic might to draw states into its sphere of influence. Xi-Jing-Ping and his Chinese dream is altering the dynamics of the international order, bringing several third world countries under the ambit of its influence. America under Trump is further adding fuel to the shift in the paradigm towards a new international world order. Furthermore, it has also been effectively exporting its culture and language through Confucius institutes and media networks around the world, to enhance appeal towards the Chinese. The Chinese Belt and Road Initiative (BRI) envisions to reinvigorate the trade network of the Ancient Silk Route. The Maritime Silk Road and the Silk Road Economic Belt are dual initiatives under BRI with several land corridors and seaways. It is a project that was recently enshrined in the constitution of the Communist Party of China. BRI connects China to Eurasia, Europe and African countries.

China, in line with its BRI objectives, is engaged in extensive investments across the globe in infrastructural projects, industrial corridors, construction of industrial complexes and transportation and communication networks. China-Pakistan-Economic Corridor and China-Central-West-Asian Economic Corridor are some of them. These investments at various locations, in effect, would bestow upon China, a strategic advantage and economic benefit in the long run. BRI would also create new markets to channel Chinese productivity, and lead to the further opening up of the Chinese economy to Central Asia, West Asia and Europe. Domestically, the grand BRI strategy, if successful, would, ensure energy security, development of regions away from the Eastern coast of China and transform China from a middle-income state to a high-income state.

Middle-East, despite chaotic at its outset, is significant for China. Fifty percent of its oil demand is met by the Middle East, further it is an important location in the BRI vision. The Chinese policy of non-involvement in the domestic matters of the region makes it an ever-welcome partner for the countries. In addition, its status as an economic power house and emerging global power incentivizes the states in the Middle East to stretch an olive branch to China, in line with its hedging strategy, considering an unpredictable United States.

Iran is an important piece in the Chinese BRI puzzle, with railways connecting Turkey westwards and, ground transportation network connecting Tehran to Central Asian countries, Afghanistan and China. Iran’s geographical location; a link connecting the Western provinces of China to Europe and an access to Persian Gulf makes it an important element in the China-Central-West-Asian Economic Corridor (CCWAEC) of the Chinese BRI project.

Furthermore, the almost complete absence of American influence in Iran, might as well have drawn China into closer relations with Iran, as a strategic partner, in the energy rich part of the world. It is to be noted that even under sanctions Chinese investments made its way to Iran, concreting the Sino-Iran relationship. China, on its part, benefits from the cheap crude oil from Iran, which is essentially required to power the Chinese economy. However, this land corridor, CCWAEC, might run contrary to the interests of G.C.C states, particularly Saudi Arabia, owing to the significance of Iran in the Corridor.

In West Asia, a significant aspect of regional politics features the rivalry between Iran and the Saudi-led GCC and under BRI, both the sides have received investments from China. Further, Israel, that has no diplomatic relations with most of the states in the region, nevertheless has attracted Chinese investments, and the relationship has emerged as an ‘innovative comprehensive strategic partnership’. These developments imply that despite Chinese BRI is apolitical in nature but nevertheless has the potential to have political implications in the region, indicating the possibility of China emerging as a game changer.

Chinese trade and investment engagements with the GCC members is consistent with the goals of BRI. The GCC states, though not part of the primary BRI route, is a valuable hub towards Middle Eastern and African markets considering their network of ports and airports. In Saudi Crown princes’ visits to China in 2016, he indicated of the importance of Saudi Vision 2030 (a project to wean the Saudi economy of its dependence on oil), which would seek to make China among Saudi’s biggest economic partners. The Crown Prince signed deals worth $65 billion. Further, an alignment of BRI and Vision 2030 is not an unlikely scenario. Considering the tense state of relations between the Saudi Arabia-led GCC states and Iran, the importance of Iran in the BRI project might be perceived as problematic. Adding to the concerns of Saudi Arabia would be the potential membership of Iran into Shanghai Corporation which would present avenues for cooperation in security affairs and further economic integration with China. A growing strategic-partnership and economic relationship of Iran with the emerging great power, would be deemed as a threat by the GCC.

Trump’s withdrawal from the Iran nuclear deal was received with applause by Saudi Arabia, UAE and Israel. However, China has confirmed that it would uphold the deal and continue its trade with Iran despite threat of secondary sanctions from US, which is in sharp disagreement to the interest of Saudi Arabia and Israel. Iran owing to its strategic importance in the Chinese BRI matrix, China is not likely to withdraw its support of Iran under US pressure.

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