By Eric Vandenbroeck

Yesterday China and Iran, both subject to U.S. sanctions, signed a 25-year cooperation agreement. The deal signed in Tehran is expected to increase bilateral trade and military cooperation as US rivals move to deepen ties. As we will point out this does not come as a surprise.

Iran and China have signed a long-gestating 25-year cooperation accord as both countries remain under Unites States sanctions. The agreement was signed in Tehran on Saturday by Iran’s Foreign Minister Mohammad Javad Zarif and China’s Foreign Minister Wang Yi.

This followed a situation where a group of 43 US senators led by Sens. Bob Menendez (D-N.J.), Jim Risch (R-Idaho), and Lindsey Graham (R-S.C.) urged President Biden in a letter Thursday to use "the full force of our diplomatic and economic tools" to prevent Iran from obtaining nuclear weapons. The letter outlines actions the Biden administration can take to curb Iran's nuclear ambitions that will garner bipartisan support in Congress, including an agreement with U.S. allies and the United Nations that prevents Iran from producing such weapons.

China next agreed to invest $400 billion in Iran's economy over a 25-year time period in exchange for a steady and heavily discounted supply of oil from the country, according to a draft of the agreement obtained by the New York Times. “Relations between the two countries have now reached the level of strategic partnership and China seeks to comprehensively improve relations with Iran,” Chinese Foreign Minister Wang Yi said, according to Reuters.

The agreement may deepen China’s influence in the Middle East and undermine U.S. efforts to keep Iran isolated due to the unresolved dispute over Tehran's nuclear program, per the NYT.

Iran's leaders indicated in January that they're willing to strike a nuclear agreement with the Biden administration. But Biden said last month that Iran will first have to stop enriching uranium above levels set by the 2015 Iran nuclear agreement before the countries can revive the deal. The U.S. reentering the 2015 Iran nuclear deal remains unpopular with U.S. ally Israel.

The agreement is the culmination of growing economic, trade and military ties between the two countries since the advent of the Iranian Islamic regime following the revolutionary overthrow of the Shah’s pro-Western monarchy 41 years ago. Although the contents of the deal haven’t been fully disclosed, it will certainly involve massive Chinese investment in Iran’s infrastructural, industrial, economic and petrochemical sectors. It will also strengthen military, intelligence and counterterrorism cooperation, and links Iran substantially to China’s Belt and Road Initiative as an instrument of global influence.

Why there is a history to this relationship and thus this what appears a sudden deal therefore should not come as a surprise.

The enduring relationship between China and Iran.

The enduring relationship between China and Iran during the 1970s Sino-Iranian cooperation was directed primarily toward containing Soviet Indian-Iraqi expansionism. During the 1980s its primary content focused on the conduct and international politics of the Iran-Iraq war. During the 1990s the substance of Sino-Iranian cooperation shifted to an oil for-capital-goods swap and countering u. s. unipolarity in an unbalanced post-Soviet world. Taking an even longer view, in ancient times Sino-Persian cooperation was directed against the Xiongnu. During the early medieval period, it was directed against the Arabs. In the future, it may well be directed against some other power. The specific opponent and content are transitory. It is the element of cooperation between China and Persia that endures and is fundamental. They see that historic cooperation as an important element of the world order prior to the earlier European and now American eruption and are determined to cooperate in putting the world once again to right. Each respects the power, strong national consciousness, and national accomplishments of the other and sees in it an influential partner well worth cultivating. The ways in which China and Iran cooperate will vary depending on mutual interests, but the impulse toward cooperation will remain constant.

In the event of a U.S.-China military confrontation that became protracted and in which the United States used its naval supremacy to blockade China's coast, China's ability to continue prosecution of the war would be influenced by its ability to import vital materials overland. In such a situation it would be extremely useful to have robust and redundant transport links via Pakistan and Iran and to have long-standing, cooperative ties tested by adversity with both of those countries.

Iran, along with Pakistan, plays an increasingly important role in providing western China access to the oceanic highway of the global economy. Economic and strategic factors converge here. The striking success of China's post -1978 development drive was predicated on integrating eastern China into the global economy, and that, in turn, was predicated on the many fine ports on China's east coast.

Those ports offered access to the oceanic highways that carried China-manufactured goods to distant markets. Western China, locked deep in the interior of Eurasia, suffered a distinct disadvantage in this regard. Western, interior provinces, with strong support from Beijing, attempted to mitigate this disadvantage by opening transport links with their neighbors. Yunnan province in China 's southwest achieved considerable success in opening or improving road, riverine, and rail links with and through Myanmar to ports (including several that were China built) on the Bay of Bengal. Myanmar 's location in the southeastern foothills of the Tibetan plateau had for many centuries made it a natural transit route between southwestern China and the Bay of Bengal. Xinjiang was not so fortunate. Its traditional international trade routes were the long and tenuous lines of the various "silk roads" across Central Asia. Beijing attempted to strengthen Xinjiang's transport links with Central Asia.

In 1990 the Soviet Central Asia railway grid was finally linked to that of Xinjiang when a line was opened between Urumqi and Aqtoghay, Kazakhstan. Then in the late 1990s a rail line was pushed south along the western rim of the Tarim Basin, reaching Kashgar by 1999. As of 2005, construction of two trans- Kyrgyzstan highways running westward from Kashgar is under way, with the intention of eventually transforming one of those routes into a rail line The China-supported construction of the rail line from Mashhad to Tedzhen, Turkmenistan, opened in 1996, as noted earlier, was also part of this effort to link Xinjiang to Iranian ports. The map (drawing) below shows these various transport routes.

China 's adoption in 2000 of a program to accelerate development of its western regions made development of transportation lines to the southwest even more important. Pakistan was China 's major partner in this regard. In August 2001 Premier Zhu Rongji committed China to provide $198 million to support the first phase of construction of a new seaport at Gwadar in Pakistan 's Baluchistan. ("China Assisted Gwadar Port to Be Completed in Three Years," Karachi Business Recorder, September 16, 2002).

Zhu also promised unspecified support for two subsequent phases of the project. When complete, the new Gwadar port was to have a cargo throughput capacity equivalent to Karachi, thereby nearly doubling Pakistan 's maritime capacity and allowing cargoes to circumvent Karachi 's extremely crowded facilities. Also in 2001, China committed $250 million to assist Pakistan in modernizing its railway system. (Nadeem Malik, " China Pledges US$1 Bn Honeypot for Pakistan ," Asia Times, May 15,2001)

In March 2003 Beijing committed an additional $500 million to Pakistan 's railway modernization, including construction of new tracks. ("Finance Advisor Speaks on Jamali's China Visit," Nation, Islamabad, March 24, 2003).

China also agreed to provide financial support for construction of a new rail line northward from Gwadar and linking up at Dalbandin with the existing east-west rail line. China also agreed to finance construction of a highway east from Gwadar along the Makran coast. Simultaneously measures were taken to expedite the flow of truck traffic along the Karakoram Highway running from Kashgar to Rawalpindi in northern Pakistan.

While China's major transportation investments in southwest Asia have been in Pakistan, Iran has played a role via several railway projects that dovetailed with China 's efforts in Pakistan. The first of these Iranian projects was construction of a rail line between Kerman in southeast Iran and Zahedan on the Iran- Pakistan border. Work on this line was under way in 2002.When complete, this rail line will link the Iranian and Pakistani rail systems for the first time. Work was also under way on a new rail line extending southwest from Mashhad directly across northeastern Iran to Bafq. This line was to be operational by early 2005. The completion of these new lines will mean that Chinese cargo moving via the Tedzhen-Mashhad link can proceed directly to seaports without having to take the long, circuitous, and crowded but previously required detour via Tehran. Once these new lines are open, Chinese cargo will also be able to move between Pakistan and Iran and via ports in either of those two countries. These new lines will add considerable redundancy to China's southwest Asia transportation system. ("Finance Advisor Speaks on Jamali's China Visit," Nation (Islamabad), March 24, 2003).

There also have been elements of conflict as well as cooperation in the Sino- Iranian relationship. Throughout the history of post-1971 Sino-Iranian relations there has typically existed an asymmetry in interest in a closer partnership to counter one or another superpower. During the pre-1979 era, it was China that was the more ardent suitor in the Sino Iranian relationship, with Beijing pressing Tehran to playa greater role in what Beijing saw as the emerging global united front against Soviet social imperialist expansionism. The shah was reluctant to go down that path. His aim in cooperating with China was deterring and moderating Soviet behavior, not provoking the Soviet Union. China, however, felt a dire threat of encirclement or even direct attack by the Soviet Union, and urgently wanted a global anti-Soviet coalition that would lessen Soviet pressure on China. During the post-1979 period, the situation was reversed. Tehran became the more ardent suitor and Beijing the more hesitant party. Confronted with the deterioration of relations with the United States, the European countries, and its Arab neighbors, Iran needed friends. The end of the Iraq- Iran war freed Moscow from its alliance obligations to Iraq and opened the door to Soviet-Iranian cooperation, but the dissolution of the Soviet state greatly reduced the willingness and ability of Russia to support Iran against the West. In its search for international partners during the 1990S, Tehran propounded joint Iranian-Chinese confrontation of the United States and various sorts of anti-U.S. hegemony blocs to include China, Iran, India, Pakistan, Russia, and even Japan. Beijing was not interested. Tehran responded by criticizing China's close relations with the United States in 1979, during Reagan's 1984 visit, and again when Beijing capitulated to U.S. pressure over nuclear and missile cooperation in 1997. Beijing moved to mollify Iranian criticism but did not alter the course of its underlying U.S. policy.

Beijing has been wary of overly close association with the IRI. The potential financial costs of close association with Iran may have been one Chinese consideration here. A major element of antihegemony, Third World solidarity was to be, Tehran insisted, robust Chinese financial support for development projects in Iran. A key theme of China 's post-1978 foreign policy line was to avoid, with rare exceptions (one of which was the Tehran metro), such costly overseas projects that, Deng Xiaoping felt, had helped impoverish China under Mao Zedong's rule. Iran 's very size meant that as an ally its demand on Chinese resources could be quite heavy.

Political factors were probably more important in explaining the distance Beijing maintained in ties with the IRI. Overly close association with the IRI could hurt China's international reputation. Deng Xiaoping strove quite effectively to shed China's revolutionary image acquired during Mao's rule. Close association with revolutionary Iran ran counter to Deng's effort to normalize China's reputation and diplomacy. After 1978 and with increasing clarity into the 1990s, China desired to be accepted as a responsible power qualified to be admitted by the international community into the ranks of the leading nations of the world. Achievement of this respectability was not facilitated by close association with Islamic revolutionary IRI or by implication in possible IRI nuclear weapons efforts. Close alignment with the IRI could also injure China 's ties both with the Arab countries and with Israel.

There were also numerous smaller frictions in the Sino-Iranian relationship. The propensity of some Iranian foundations, and perhaps even the IRI government, to foster radical Islamic thought in China's Muslim communities and in Central Asian countries contiguous to China generated conflict in the P RC- IRI relation. This conflict led not to estrangement but, paradoxically, to greater emphasis on "friendship." Beijing sought to demonstrate to Tehran that cooperation with China was valuable, but that such cooperation would be impossible if Iranian "interference" in the affairs of China's Muslim communities continued. In effect, Beijing made cessation of Iranian subversion the price of Chinese friendship and cooperation. Conflict thus led to engagement and friendship, rather than to sanctions and hostility.

Tehran sometimes defaulted on payment of its bills to Beijing. Difficulties of doing business in Iran certainly tested the patience of Chinese businesspeople no less than German, South Korean, Canadian, or Norwegian. Arbitrary and unilateral Iranian changes in agreements sometimes led to Chinese protests. So to did Iranian "discrimination" against Chinese goods in favor of Western technology. Negotiations over business deals were often long and hard, with Iranian calls for Third World solidarity being met with Chinese insistence on mutual benefit.

The world order is based on the sovereignty of states. An anachronistic concept at the time, it first entered the vocabulary of modernity with the Treaty of Westphalia in 1648. After thirty years of religious wars, it was agreed that the ruler had the right to determine the religion of his subjects. Next, the French Revolution, overthrew King Louis XVI and the people seized sovereignty. Since then, the two instances of a partial sovereignty, have gradually transformed into the democratic principle as recognized by the United Nations, following the end of WWII. There has never been a world order capable of preventing war, but the idea that there is no world order other than the use of force is a fallacy-a companion piece to the misinterpretation of the nature of power.

After the collapse of the Soviet empire, America under George W. Bush, used its dominant position to promote its national self-interest. The United States, as the dominant power, however could have chosen instead to concern itself with the well-being of humanity in addition to pursuing its self-interest. There has been a profound shift in American attitudes since the Marshall Plan was implemented. When the Soviet Union collapsed, the idea of a Marshall Plan for the former Soviet empire could not even be discussed. The emergence of a different attitude from the one that gave birth to the Marshall Plan can best be identified as ‘market fundamentalism’-a belief that the common interest is best served by people pursuing their self-interest.

Furthermore, facilitating the international movement of capital has made it difficult for individual countries to tax or regulate capital. Since capital is an essential factor of production, governments have to pay more attention to the requirements of international capital than to their own citizens. Thus the development of international institutions has not kept pace with the growth of global financial markets. Private capital movements far outweigh the facilities of the International Monetary Fund and the World Bank. Developing countries are vying to attract capital, yet the world's savings are being sucked up to finance over consumption in the United States, and now also Europe as ‘feel good’ countries today.

But not only has American power and influence suffered a serious setback by now, but the world order is also in disarray. One could even argue that in a world of sovereign states, the lack of a dominant power that has the common interests of humanity at heart leads to instability and conflict.

Although the spread of nuclear weapons constitutes a threat to humanity, the arguments for non-proliferation are undermined by the fact that the nuclear-weapon states have not fulfilled their obligations under the non-proliferation pact: they have made only very limited moves toward complete disarmament, as required by Article VI of the NPT. Thus the situation is much more dangerous than at any time in the Cold War, yet much less thought is given to the subject than during the Cold War. The best brains are not engaged. Insofar as there is public discussion, it is focused on weapons of mass destruction falling into the hands of terrorists. This is obfuscation. The very term "Weapons of Mass Destruction" is misleading, because it lumps together weapons with very different characteristics. The most potent threat, in our opinion, is the proliferation of nuclear weapons in the hands of states. That threat is not receiving the attention it deserves.

There is little hope for a solution while the United States is modernizing its strategic arsenal and continuing to have plans to use nuclear weapons. A solution could only exist if a new non-proliferation agreement was negotiated that would put all nuclear programs under international supervision. It would not deprive the United States and other states of their weapons, but it would place them under international monitoring to ensure immediate detection if a country decided to initiate the use of nuclear weapons. But since there are plentiful amounts of highly enriched uranium already in existence, it is possible for nations to acquire fissile materials without producing their own. The other necessary treaty component must therefore implement international control of the production and disposal of the fissile materials necessary to build nuclear weapons. Such an arrangement would run counter to the prevailing view that American sovereignty is sacrosanct but it could make the world, a safer place.

Finally, in regards to the resource question, developing countries that are rich in natural resources tend to be just as poor as countries that are less well-endowed; what distinguishes them is that they usually have more repressive and corrupt governments and they are often wracked by armed conflicts. This has for some time been known as the resource curse.


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