Chinese President Xi Jinping seems ready to take on the US. The proposed draft of an economic and military agreement with Iran lays out Beijing’s plan to expand its footprint in the Middle East, just like it has done in South Asia. Incidentally, China looks keen to occupy areas that the US is either vacating or where it has shown diminished interest. But this expansion may have its own complications due to the inherent tensions and competitive nature of regional players.
For India, though, the immediate concern would be the expectation in Islamabad that China will help iron out the bilateral differences between Iran and Pakistan. There is certainly a view that China will ensure greater distance between Delhi and Tehran. However, it’s worth reiterating that a lot will depend on China’s capacity to intervene in regional and domestic issues, and steer its Belt and Road (BRI) project clear of conflicts that it is not a part of or has no experience to handle. The economic competition within the BRI could also exacerbate internal tensions that various players have not thus far considered.
The geo-political ambitions
The China-Iran agreement, unlike the China-Pakistan Economic Corridor (CPEC), includes conversations about shared geo-political ambitions such as joint investment in Iraq and Syria. This indicates both Iran’s ambitions and China’s willingness to bankroll or simply use Tehran’s expertise in the Middle East from where the US seems to be cautiously withdrawing. But then Tehran may be expected to harness some of its ambitions, especially regarding Isreal with whom Beijing has independent relations. If China believes that its money can rid the Middle East of its historic biases and differences, it may be dreaming of another planet.
There are also plans to establish joint defence research and development, and production ventures — a partnership similar to what Beijing has with Islamabad. In fact, there is talk of building relations between strategic communities of China and Iran. This could mean China actively trying to retrain Iranian mind — weaning it away from the West to the East. It will also mean re-shaping the strategic community, like it’s been done in Pakistan, to quell any alternative ideas and parrot a linear narrative suited only to the governments in Tehran and Beijing. It is noteworthy that a strict disciplining of the security discourse in Pakistan, which has an older defence relationship with China, began much later after initiation of CPEC which is a new economic-strategic linkage. The Iranian plan, on the other hand, is drawn out to be more geo-politically intense.
The proposed $400 billion investment plan in Iran, spread over 25 years, will allow China to tap into Iran’s oil and gas resources in return for cooperation in the field of defence, information technology, agriculture, industry, tourism and telecom.
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The CPEC parallels
Similar to the CPEC deal, which was signed in 2016, there appears to be a plan to develop communication infrastructure, linking Iran with Central Asia and creating linkages that will then be accessible to Beijing. The draft agreement is more of a vision statement spread over 18 pages rather than a detailed roadmap that one can see in the 234-page-long CPEC execution plan. The common element between the two plans is secrecy and lack of transparency. Little was known about the CPEC’s terms of business and loans given by China to the Pakistani government. Much of the details on CPEC are still not known.
Furthermore, in Pakistan’s case, the Imran Khan government seems willing to get approval for a supra-powerful CPEC Authority, headed by Lt. Gen. (retd) Asim Saleem Bajwa. The draft proposal stipulates the creation of an extremely centralised body that will have the authority to procure land and pass it on to the Chinese, be free from reprimand of the country’s judiciary, its decisions will not be challanged, and have a highly secretive structure in which even outsiders could be punished for sharing CPEC-related information with anyone, the same way as people working inside. The Authority definitely looks more like a military rather than a civilian or business-oriented institution.
The proposed formation of the CPEC Authority may not be on China’s insistence but it certainly signals Beijing that the CPEC will continue irrespective of any change in Pakistan’s political landscape. Governments may come and go but the bilateral cooperation would continue. Beijing does tend to get irritated with domestic political squabbling in partner states, resulting in slowdown of the initiative, which is what happened with the CPEC. An approximately $60 billion investment plan slowed down to about $26 billion due to disagreement between different sectors of the state and between the old and new governments regarding the direction of the CPEC. An Iran eager to find a market for its oil and gas, and hungry for investment may consider a similarly centralised formula. It would definitely, as in Pakistan’s case, set up a force for physical security of Chinese investment. The grapevine is already talking about China deploying some 5,000 troops inside Iran for security of the projects. Pakistan, in fact, secured itself from Chinese pressure by establishing a 10,000-strong personnel force. Beijing, as sources say, was keen to use its own security force to secure the projects.
Both in the case of CPEC and the prospective Iran agreement, China has used its deep pockets to seek out partnership with countries troubled with financial issues and a bleak economic future. The diminishing price of oil and American sanctions clearly leave little option for Iran but to move towards China. The dire conditions exacerbated further due to Covid-19, when procuring PPEs became a major challenge for Tehran due to restrictions imposed on it.
For China, political engagement needed too
Notwithstanding that the Iran agreement gives a broader geo-political roadmap as well, However, China is considered as more ‘independent’ because of its policy of minimal intervention, like in Pakistan’s case where Beijing did not really interfere with Islamabad’s dealings with the Taliban unless it impinged upon China’s security interests. A similar formula may be applied to the Middle East. In any case, China’s footprints in the Middle East are likely to increase due to America’s receding interest, or lack of willingness to finance and support or take position on internal conflicts.
One of the issues, however, is that no matter how hard China tries, it cannot maintain economic objectivity of its regional plans without building its own capacity to engage in these territories politically. The investment of $400 billion in Iran is also dependent upon the country’s absorption capacity, which, in turn, is linked with deep political issues. One of the reasons that the CPEC slowed down was due to Pakistan’s domestic capacity.
Some segments of the security community in Pakistan have demonstrated excitement over the Iran-China agreement, which is caused by the understanding that it would allow Beijing to pull Tehran away from its agreement with India over Chabahar. There is also hope for improved relations between Tehran and Islamabad, considering that both Muslim states are now part of the BRI roadmap. Pakistani commentators talk about the BRI purely as a grand economic initiative and not in terms of China’s broader geo-political and geo-strategic ambitions. One hears a constant reference to China’s magnanimity. Despite such rhetoric, one hopes that Islamabad is looking at the relationship cautiously. The small study group created by Prime Minister Imran Khan’s special assistant on national security to analyse relations with Iran could start from reading Alex Vatanka’s book Iran and Pakistan Security Diplomacy and American Influence.
Beijing’s balancing act: Iran and Pakistan
The parallel stakes in Central Asia and Afghanistan may require Beijing to undertake a more intense planning. Vatanka’s book draws out the historic underlying competition between Iran and Pakistan that has echoes throughout the course of bilateral ties between the two countries. In this respect, China may have to prepare itself for separate conversations that the Americans were privy to, especially until the end of the Iranian monarchy in 1979. Vatanka highlights archival material from the US and Iran about the tension that existed regarding both Tehran and Islamabad, vying for establishing themselves as a more critical power. In 1976, for instance, there was resentment expressed in Islamabad “of Iranian good fortune….Iranian arrogance, ultimately personified in the Shah himself.” Bhutto’s backbiting to the Americans reached the Shah of Iran’s ears resulting in troubled relations. This could repeat itself as both states will compete for China’s attention.
Post-Iranian revolution there was more tension between Islamic Iran and Zia-ul-Haq’s Pakistan over difference of opinion regarding Islamabad’s support to America, help to Taliban and the fact that Tehran acquired responsibility for security of embattled Shias in Pakistan. Though Islamabad, in the last couple of years, seems to have struggled with controlling sectarian violence, the Shia-Sunni divide has grown serious. It could flare up if, for instance, Shia clergy and population in general seriously start disagreeing with Punjab assembly’s Tahaffuz Bunyad-e-Islam Bill. It was not too long ago that tension over Iran’s relations with India turned into a spat between Iran’s President Hassan Rouhani and the Pakistan Army.
Beijing is moving closer to Tehran even as the world is busy dealing with the scourge of the coronavirus pandemic. China beholds the ambition to dominate areas from where the US is making an exit, but Xi Jinping would do well to remember that as far as Iran is concerned, Pakistan stands on the other side of the corridor.
Ayesha Siddiqa is research associate at SOAS, London and author of Military Inc. She tweets @iamthedrifter. Views are personal