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What China-Iran deal means for Washington

China's reported multibillion economic and security deal with Iran could be a double-edged sword.

Iran is reportedly in the final stages of agreeing to a $400 billion economic and security deal with China, which includes infrastructure investment, discounted Iranian oil and enhanced cooperation on both defense and intelligence. Iran, suffering from the horrific impact of COVID-19 and with its economy in free fall since the Trump administration reimposed sanctions after withdrawing from the Joint Comprehensive Plan of Action (JCPOA) in 2018, is in desperate economic straits.

Iran rejected the US offer to negotiate lifting sanctions in return for a new agreement that would remove JCPOA sunset clauses and address Iran’s state-sponsored terrorism and ballistic missile program. In an effort to induce the United States to return to negotiations, Iran began escalating attacks on the United States and its allies in the summer of 2019 by attacking oil tankers in the Gulf; seizing the Stena Impero oil tanker; shooting down a US drone; and launching a missile attack against Saudi Aramco facilities.

In July 2019, Iran began exceeding the limit on its stockpile of low enriched uranium set under the JCPOA.  Iran has also nearly tripled its stockpile of enriched uranium since November 2019, also in violation of the JCPOA, according to the UN International Atomic Energy Agency. Iran’s current stockpile brings it dangerously close to the amount needed to produce a nuclear weapon.

US-Iranian relations reached a nadir following the US airstrike that killed Iranian Maj. Gen. Qasem Soleimani in January. 

In 2016, Iran and China signed a strategic partnership focused on increasing investment and trade, a calculated hedge given that the US Senate never ratified the JCPOA as a treaty. 

China’s aspiration for global influence extends well beyond competing with the United States as a Pacific power. Using its “One Belt, One Road” initiative as cover for debt-trap diplomacy, China has set its sights on attacking the independence of nation-states from South Asia throughout the developing world.

During the past decade, China has significantly increased investments in Iran, Iraq and Saudi Arabia. Chinese firms are also managing the Israeli port of Haifa, where the US Navy’s 6th Fleet often docks. China’s insatiable need for energy imports dictates its interest in the Middle East. Seeking to maintain positive bilateral relationships with both sides of the Iranian-Saudi conflict, China purposely defers to the United States and regional powers to shoulder the burdens of dealing with the Middle East’s security challenges.

China predictably does not seek to promote government reform or elevate human rights issues. And Middle East nations have thus far avoided criticism of China’s repression of its Muslim minority in Xinjiang.

China of course has long pursued a national security strategy of offering a lifeline to repressive regimes like North Korea, in the interest of economic predation.

China clearly sees Iran’s current economic distress as an opportunity to expand its influence.

The United States is focused on countering, deterring and defending against China’s increasingly aggressive attacks on the United States and its allies’ national security interests. US freedom of navigation operations are challenging China’s unsubstantiated claims of hegemony over the South China Sea. China is mounting a full-throttle espionage campaign against the United States and its allies; stealing intellectual property with impunity; and crushing democracy activists in Hong Kong. Deliberately concealing the outbreak and severity of the coronavirus, China ruthlessly seeks to coerce other nations to adhere to its propaganda designed to whitewash China’s image.

Iran is on the precipice of making the most Faustian of bargains. Iran would surely welcome China’s massive market for oil, gas and hydrocarbons; investment in Iran’s banking, telecommunications and transportation sectors; and Chinese technology, which would create an Iranian “great firewall” designed to deny its citizens cyberaccess to the outside world. But Iran would risk ceding some of its sovereignty to the point of becoming China’s client state in violation of the principles that ostensibly guided its 1979 revolution. 

At the heart of the US-Sino conflict — just as they were during the US competition with the Soviet “evil empire” — are democratic principles of liberty, freedom and pluralism, which are an existential threat to China’s autocratic, communist state just as they continue to be to the Kremlin’s. 

The United States and the Soviet Union never declared war on one another but the Cold War was known for the number of proxy conflicts in which they engaged. The US goal was to contain the spread of communism while the Soviets sought to expand their global influence.  

A Chinese alliance with Iran would have immediate tactical implications in the Middle East but it would also be a bellwether for a 21st century Cold War from which neither the United States nor China would benefit.

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