China’s growing role in Middle East won’t solve Iran’s economic woes

Al-Monitor Pro Members

Dr. Bijan Khajehpour

Managing Partner, Eurasian Nexus Partners, Vienna, Austria

April 13, 2023

Iran’s geostrategic position means that its trade and economy will remain vulnerable to geopolitical shifts. These include regional realities, changes in West-Russia relations as well as West-China ties and shifts in international energy markets. Whether the net effect will be positive or negative will depend on Tehran’s policy responses to the current geopolitical climate. For example, as can be witnessed, Iran is positioned to benefit from China’s growing role as a trusted intermediary in Middle Eastern affairs. How far this process will continue will depend on the interplay between domestic, regional and international processes, but many believe that favorable geopolitical shifts won’t compensate Iran for the economic losses the country has suffered because of the failure to revive the nuclear deal. In the end, what the Iranian economy needs is sizable investments in the next decade and such investments will remain limited as long as Western sanctions persist.