February 2023

President Ebrahim Raisi’s state visit to Beijing from 14 to 16 February, the first by an Iranian president in more than twenty years, caught the attention of media outlets across the wider Mediterranean region this month. Leading a high-ranking political and economic delegation, Raisi met with his Chinese counterpart Xi Jinping and together oversaw the signing of twenty cooperation agreements in fields such as trade, tourism, technology, intellectual property, agriculture, healthcare, and cultural heritage.

Raisi’s trip occurred in the context of growing disillusionment in Iran over his government’s “Look to the East” foreign policy that prioritizes strengthening ties with China in the face of growing tension with the West. Since Xi’s state visit to Riyadh in December 2022 during which China approved a joint statement that acknowledged the United Arab Emirates’ claim to three Iranian-controlled islands in the Strait of Hormuz, many Iranian analysts have been voicing concerns that Beijing is in reality disinterested in expanding its partnership with Tehran, instead preferring to deepen its political and economic relations with Saudi Arabia and other GCC states.

While criticism of the Iranian government’s decision to tie itself to an allegedly ambivalent China was once limited to more reformist-minded outlets, on 1 February the conservative newspaper Resalat published an article lamenting the lack of results from the Sino-Iranian 25-year strategic cooperation agreement signed in March 2021. [1] The article reported statistics showing that Chinese investments in Iran over the last two years have been rather limited (especially compared to those in Iraq and Afghanistan) and that bilateral trade is increasingly unbalanced in China’s favor (as can be seen also over at ChinaMed Data). While mostly blaming Beijing’s "bad partner" behavior on the United States' indifference towards reviving the JCPOA nuclear deal, Resalat still called on Tehran to "work more on its economic and political diplomacy."

Raisi’s state visit to China seemingly responded to this call, as it supposedly resulted in Tehran and Beijing reaffirming their commitment to the 25-year agreement, with Mehdi Safari, the Deputy Minister of Economic Diplomacy of Iran’s Ministry of Foreign Affairs, stating that “this trip can put an end to paperwork and will bring projects and commercial cooperation between the two countries to the implementation stage.” This comment comes from an article from government-aligned newspaper Keyhan which (besides celebrating Beijing’s alleged plan to follow Moscow’s footsteps and purchase 15,000 Iranian UAVs) attacked the “confusion and concern over the expanding strategic cooperation between Iran and China” coming from “those who call for moderate reforms and limit their foreign policy outlook to America and Europe,” and are supposedly fearful of “the formation of a powerful anti-sanctions pole and the development of the new Asian century.” [2] Huseyn Rezavipur reiterated this sentiment in his article for Iran, the Iranian government’s official newspaper, and blamed the former government and country’s political divisions for the lack of implementation of the 25-year agreement. [3]

Indeed, Raisi’s visit, rather than placating the usual Iranian media debate over the value of the partnership with Beijing, only intensified it, especially with regard to whether it can help Tehran overcome the US-led sanction regime. On the more China-skeptical side, retired diplomat Javid Ghorban-Oghli interviewed by the reformist newspaper Etemad, stated that while the Iranian president’s trip to Beijing “may provide an opening to reduce the people’s suffering and the economic pressure on the country,” Tehran should nevertheless “not put all its eggs in one basket, because in international relations, depending on a country is dangerous” especially in light of China’s growing security cooperation with the Arab countries on the other side of the Gulf. [4] Moreover, Ghorban-Oghli not only questioned China’s willingness to ignore US sanctions but also raised concerns over “the conditions of the Chinese for oil transactions with Iran… Are we selling oil to China at a discount? How much is this discount? Can we get cash for the crude oil we sell? If we receive goods in exchange for oil from China, to what extent will we be able to choose?”

Notwithstanding this debate over cooperation with China, all Iranian analyses have placed the recent developments in the bilateral Sino-Iranian relationship within the greater international and regional context. For instance, international affairs analyst Ali Hosseinpour, in an article for Sharq, examined the claim that Beijing may be attempting to mediate between Saudi Arabia and Iran. [5] For Hosseinpour, while it is true that China is interested in restoring diplomatic relations between the two Middle Eastern powers, Riyadh is instead “seeking to play a political game against Iran.” The Iranian analyst posited that despite the show of goodwill and initiative from Tehran, the Kingdom has shown no desire to reestablish diplomatic ties with the Islamic Republic and that its friendly rhetoric is part of a plan to keep tensions from escalating while at the same time continuing its “campaign of diplomatic and political erosion” against Iran. Regarding China’s motivations, Housseinpour stated that Beijing’s regional diplomatic efforts are a part of its global campaign to confront Washington, especially in light of the recent spike in tensions following the “Chinese spy balloon” incident. Donya-e-Eqtesad also emphasized the China-US competition when explaining Xi’s decision to invite Raisi to Beijing, hypothesizing that the Chinese president wishes to “play the Iran card against the US to push Washington back from its current offensive stance.” [6]

Commentators across the Middle East also adopted diverse lenses to analyze Raisi’s state. While Israeli news website Walla! editor Guy Elster observed how both Iran and China are experiencing heightened tensions with the West, [7] Shaher al-Shaher writing for Hezbollah-aligned news outlet al-Mayadeen instead more positively examined both sides’ economic and strategic interests. [8] Meanwhile, Tamjid Kobeissy for the Lebanese newspaper An-Nahar focused on how the Sino-Iranian rapprochement will bring about “great American resentment” and “will push Washington to oppose this rapprochement by all means and limit any similar opening up without hesitation.” [9] On the other hand, Emirati analyst Salim al-Kitbi writing for the Kuwaiti newspaper Al-Seyassah considered whether “China’s relations with the GCC countries will be affected by Beijing’s interests with Tehran?,” concluding that while there is no definite answer, all parties realize how “it is indispensable for a major rising power like China to build relationships with all sides.” [10]

Besides China’s developing relations with Iran, Middle Eastern analysts this month also paid much attention to analyzing their countries’ increasingly tight economic ties to the People’s Republic, for better and for worse. Globes, for example, offered an update on the China-Israel free trade agreement. [11] According to the Israeli financial newspaper, the agreement, which was supposed to be concluded last year but was postponed due to COVID-19 restrictions preventing in-person meetings, may at last be finalized in the next two months. The FTA will likely include the elimination of the 7% customs duty on vehicles imported from China, particularly relevant considering how Chinese car imports (in particular imports of electric vehicles) to Israel grew by around 276% last year.

Meanwhile, Iraqi media voiced their fears over Beijing’s increasingly pervasive economic influence in the country. For example, the Iraqi news outlet al-Hall highlighted a recent report by the American website Oil Price, according to which “China’s taking bolder steps to expand its economic and oil investment influence in Iraq as three Chinese companies obtained oil contracts for exploration blocks and Iraqi border fields.” [12] However, according to political economist Abdul Salam Hassan who was interviewed by al-Hall, “due to a variety of reasons, these new Chinese investments in Iraqi oil fields will not result in significant gains for Iraq.” He blamed the lack of regulation of oil contracts since 2003, which have assigned larger shares to foreign companies (including Chinese ones) than to the Iraqi state. In order for Iraq to benefit from these new Chinese projects, Hassan argued that more than 50% of their labor force should be made up of Iraqis, as it would provide local job opportunities and allow Iraq to expand its own capabilities with regard to developing its oil sector.

Furthermore, there was also significant debate over the Central Bank of Iraq’s decision to use Chinese yuan instead of US dollars in its commercial exchanges with the People’s Republic. In an interview for NINA, economist Raad Twigg asserted that the use of the yuan “implies a number of caveats for Iraqi oil revenues” as “the Chinese yuan could be manipulated for interest of the Chinese economy” to the detriment of Iraqi oil and commodity exports to China. [13] On the other hand, Nabil Al-Marsoumi, a professor of economics at the University of Basra, offered a less alarmist take for the pan-Arab newspaper al-Quds al-Arabi. [14] Al-Marsoumi noted that not only have other states, including Saudi Arabia, Iraq and Israel, already taken similar measures, but that this decision to use the Chinese yuan does not in fact free Iraq from using the US dollar, as oil – Iraq’s primary export – remains priced in the American currency.

While China also expanded its economic presence in Southern Europe, with China and Greece signing a new cooperation agreement on shipping finance, [15] European media this February focused their attention on analyzing the intentions and effectiveness of China’s recent charm offensive across the continent. Italian commentators considered whether Beijing’s diplomatic outreach characterized by Director of Foreign Affairs Commission Wang Yi’s stop-over in Italy and by the appointment of Jia Guide as China’s new ambassador to the country could be an attempt to convince the China-skeptical Italian government led by Prime Minister Giorgia Meloni not to withdraw from the Belt and Road Initiative. [16] However, more generally, China’s more conciliatory rhetoric towards European states, especially on the war in Ukraine, has been seen in the continent as an attempt to weaken the recent consolidation of transatlantic ties. Beijing’s diplomatic efforts, in particular its “position paper” on reaching a political settlement in Ukraine, have been dismissed out of hand by most European capitals as the Chinese government continues to not offer anything concrete with regard to getting Russia to halt its aggression. [17]

We conclude this month’s edition of the ChinaMed Observer with an article from Sözcü on China’s humanitarian efforts in the areas of Türkiye affected by the devastating magnitude 7.8 earthquake that hit the region on the morning of 6 February 2023. [18] The newspaper reported that a team of around 200 Chinese nationals have been actively supporting the work of Turkish search and rescue teams, which thanked the Chinese team for their efforts “on behalf of the entire [Turkish] nation.”

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