Iranian President's visit to China｜China-Iran relations test

Iran’s conservative President Ebrahim Raisi will pay a three-day state visit to China from February 14 to 16, accompanied by ministers in charge of economy, oil, foreign affairs, trade, transportation, and urban development. It’s not just Raisi himself He will visit China for the first time after taking office in 2021, and it will be the first Iranian president to visit China in 20 years.

After Chinese President Xi Jinping's high-level state visit to Saudi Arabia in December last year, observers once paid attention to whether Sino-Iranian relations would go downhill because of this. Rahi's answer seemed to be a definite "no".

In an article published in the "People's Daily" before his visit, he described Sino-Iranian relations as "you know the pines and cypresses in cold weather, and you can see the truth in adversity".

At first glance, Leahy's article seems to be one-sidedly applauded for Sino-Iranian relations: he talked about the "anti-hegemonism and unilateralism" that was clearly aimed at the United States from the Silk Road friendship in the history of the two countries, and praised "China has shown to the world Demonstrate that a country is fully capable of developing and progressing without expansion and helping other countries develop", as well as Xi Jinping's "wise leadership".

However, the last sentence of the article, "the year is cold and the pines and cypresses are known" seems to be a hidden mystery.

This phrase originally comes from "The Analects of Confucius.

"Zihan", Zi said "The year is cold, and then you know the pines and cypresses will wither." It is a metaphor that only after a test like a severe winter can you know the true quality of a person, thing, or thing.

As far as China-Iran relations are concerned, there are two completely different interpretations of "Sui Han knows pines and cypresses". Need to experience the "year-old cold" to know whether it is as cold-resistant as "pine and cypress"?

Iranian President Rehi delivered a speech on February 11, 2023, on an occasion commemorating the 44th anniversary of the Islamic Revolution.

(Reuters)

The 'buyer's edge' of sanctioned oil

The test of Sino-Iranian relations has become more and more obvious in recent years.

First of all, after the former Trump administration of the United States withdrew from the "Iran Nuclear Agreement" in 2018 and imposed "maximum sanctions" on Iran, China, one of the signatories of the agreement, is clearly a political supporter of Iran.

To some extent, this position was consistent with that of the European signatories at the time.

The problem is that political support is non-substantial, and whether substantive support can be achieved is the key.

China-Iran relations are largely based on energy trade. There are very few global buyers of Iranian oil sanctioned by the United States, and China has become its largest export destination.

Although the actual volume of oil transactions between China and Iran is not public data, Iran has long used Malaysia as a transit point for its oil exports to China in recent years. Among the target destinations, China and Malaysia accounted for 28% and 46% respectively. It can be seen that China is indeed a major supporter of Iran's bypassing US sanctions to continue its energy export economic lifeline.

However, since the outbreak of the Russo-Ukraine war, Russia's energy exports have been squeezed out by Western countries, making it a competitor in Iran's sanctioned oil export market.

It is also reported that some tankers originally used to transport Iranian oil have now been converted to serve Rosneft.

The proportion of Iranian crude oil and condensate export destinations in 2021, among which the United Arab Emirates (UAE) is also accused of being one of the transit points for Iran's energy exports to China.

(EIA)

With China's post-epidemic economic recovery and rising demand for energy imports, market analysis shows that China's Iranian oil imports reached a record high at the end of last year, and this trend is expected to continue this year.

The external economic factors at the moment determine that the competition for Russian oil has not compromised the energy relationship between China and Iran. However, taking the variable economic ups and downs as the cornerstone of the core relationship between China and Iran is definitely not stable.

Investment in Iraq has not been realized

To continue to deepen Sino-Iranian relations, the two countries must find a foundation other than energy trade.

Last year, Iran joined the SCO as an example.

But the element of China-Iran relations with more substantial potential is the "China-Iran 25-year Comprehensive Cooperation Agreement" signed by the two sides in March 2021 before Leahy won the election, which claims to involve up to 400 billion US dollars of Chinese investment in Iran.

However, during Leahy's first year in office, China's investment in Iraq was only US$162 million, which was lower than that in Afghanistan.

Although China has been Iran's largest trading partner for a long time, there has been concern within Iran that this cooperation agreement is more symbolic than actual.

The London-based Iranian overseas media "Iran International" quoted a former Iranian diplomat in January this year as saying that the agreement was just a bargaining chip used by China to negotiate with Iran's old enemy Saudi Arabia.

Some British media reported that some tankers originally used to transport Iranian oil have now been converted to serve Russian oil.

(Reuters)

People in the Leahy government are also very concerned about the progress of the agreement.

As early as January 2022, after its foreign minister Hossein Amir-Abdollahian visited China for the first time and met with then-Chinese Foreign Minister Wang Yi, he declared that Iran was ready to "begin to implement the comprehensive cooperation between the two countries today." protocol".

However, today, more than a year later, China and Iran have not announced any specific cooperation projects under the agreement.

Before Lehi's visit, some Iranian officials told the local media that the main purpose of the trip was to finalize the movement mechanism of the agreement.

Whether this 25-year agreement between China and Iran can bring about real results and whether it can help Iran get out of the economic dilemma under extreme sanctions will be a major test of the relationship between the two countries.

The biggest difficulty in China-Iran relations lies in the ever-closer relationship between Saudi Arabia and the Arab countries and China.

Iran's disadvantage

China-Saudi Arabia relations and China-Iran relations are actually not without similarities: Whether it is Saudi Arabia or Iran, their relations with China are also centered on energy trade, and for different reasons, the two countries also need to cooperate with China in investment, Cooperation in scientific and technological development, infrastructure and other aspects; for both, their diplomatic relations with China have always been considered by the "third party" of the United States.

Crown Prince Mohammad of Saudi Arabia presided over the China-Arab summit on December 9.

(Reuters)

However, among the similarities, Iran is obviously at a disadvantage in relation to China compared with Saudi Arabia.

In terms of energy exports, Iran, which is sanctioned by the United States, can only rely on China as its main (or even single) buyer. Although Saudi Arabia’s oil exports to China far exceed Iran’s, its oil can be traded freely and has no impact on the Chinese market. One-way dependence.

In terms of investment cooperation, Chinese companies are generally reluctant to invest in Iran because of the risk of US sanctions.

Both Huawei and ZTE have been in legal trouble for violating U.S. sanctions against Iran; even just after the signing of the nuclear agreement, the annual report of Sinopec Refining and Engineering Company also emphasized the sanctions risks of investing in Iran.

The investment environment in Iran is obviously not as good as that in Saudi Arabia. Even in the years before the United States withdrew from the nuclear agreement in 2018, the turnover of Chinese infrastructure contractors in Saudi Arabia was three times higher than that in Iran.

How to balance between China and Saudi Arabia and China and Iran?

China's diplomacy in the Middle East tends to focus on practical projects at the economic level, and try not to contaminate political or military conflicts between countries in the region.

Between the two feuds of Saudi Arabia and Iran, China has always adopted a diplomatic posture to balance the two parties. Within a month or so, there were joint military exercises with Saudi Arabia and Iran respectively. At that time, Saudi Arabia’s largest oil processing plant in the world was just attacked by Iran or the Yemeni Houthi militia supported by Iran. The relationship between Saudi Arabia and Iran was tense. "Extreme time" also deliberately showed its neutral attitude.

However, as the economic importance and political symbolism of Sino-Saudi relations have grown, Sino-Iran relations are in danger of "falling behind".

This was highlighted during Xi Jinping's state visit to Saudi Arabia last December.

The picture shows that on December 8, 2022, Chinese President Xi Jinping met with Saudi King Salman during his visit to Riyadh, Saudi Arabia.

(Reuters)

In the joint statement of the leaders summit between China and the Gulf Cooperation Council (GCC) at that time, China rarely "stands" between Arab countries and Iran.

On the issues of Greater Tunb, Lesser Tunb and Abu Musa in the Strait of Hormuz (Strait of Hormuz), which are controlled by Iran and have sovereignty disputes with the UAE, The joint statement went so far as to express support for the UAE's "initiatives and efforts" to reach a peaceful settlement.

At the same time, the joint statement also named Iran many times, saying that it would "ensure the peaceful nature of Iran's nuclear program" and "call on Iran to cooperate fully with the International Atomic Energy Agency" (note: Iran has been in dispute with European countries for this reason), and that Iran and "Destabilizing regional activities" are involved (according to the official Saudi English version).

The statement prompted the Iranian government to summon the Chinese ambassador to Iraq to discuss the incident, and Iran also publicly expressed "strong dissatisfaction" with the statement involving the sovereignty dispute over the three islands of Hormuz.

Finally, China will send Vice Premier Hu Chunhua to visit Iran to calm the situation.

An Iranian official told the media on condition of anonymity at the time, "For us, China is not a country like Germany...We still regard them as friends, and we need them to buy our oil and invest in our oil infrastructure. .” Iran’s dependence on China is fully revealed here.

After the diplomatic impact of Xi Jinping's state visit to Saudi Arabia, Rahid's state visit to China can be regarded as an important test of China's Iran foreign policy.

Will China's investment in Iran continue to remain at the stage of "lips" or will it usher in real progress?

In the end, will China's foreign policy in the Gulf region still maintain its long-standing neutrality?

The answers to these questions will tell us exactly what Laixi meant by saying "you know the pines and cypresses in the winter".

Xi Jinping will hold a ceremony to welcome Iranian President Rehi to visit China on February 14. Iranian President will visit China on February 14. Western attention: Or strengthen political and economic cooperation with China. Ministry of Foreign Affairs: Iranian President Rehi's visit to China from February 14 to 16 to commemorate the 44th anniversary of Iran's revolution was interrupted by hackers