Raisi’s visit to Beijing to boost China-Iran strategic partnership Brothers-in-sanctions seek their own game rules

On February 14, Iran's President Ebrahim Raisi arrived in China for a three-day state visit, where according to the media, trade was topping the agenda. Raisi is heading a high-level delegation comprising ministers of oil, finance, transport, agriculture, industry and foreign affairs, as well as the country's top nuclear negotiator and the central bank governor. In the first few hours of the visit, 20 memoranda of understanding (MoU) were inked between the two sides, encompassing a diverse range of fields from trade, agriculture and information technology to health care, environment and tourism.

Another significant point of the trip is the scheduled signing of a critical transport agreement worth $12 billion that allows Chinese investment in a high-speed rail line project connecting the northeastern Iranian city of Mashhad to the capital Tehran. More importantly for Iran, Raisi’s visit to Beijing aims to help implement a 25-year cooperation alliance between the two nations at a time when both countries face pressure from Western countries over various issues.

In order to neutralize the Western pressure, Beijing also seeks a deeper alliance with Tehran and Moscow. However, the fact that Moscow and Tehran have been historically strategic partners does not prevent Beijing from pursuing its own pragmatic goals, as it seeks to capitalize on stagnating economies of both states amid harsh economic sanctions.

Recently, Iran came under extremely harsh pressure from the Western governments, which heavily criticized Iran's nuclear ambitions and its crackdown on anti-government protesters, with Washington and Berlin also critical of China's drills near Taiwan and its treatment of the Muslim Uyghur minority in Xinjiang. While Tehran and Beijing largely ignored such criticism, they still came under fire for not publicly condemning Russia's unprovoked war against Ukraine since February 2022. On the contrary, Iran supplied Moscow with kamikaze drones and military instructors, whereas China kept a low profile with technical assistance.

Iran's rapid shift to China, Japan, and India should not come as a surprise considering its recent "Look to the East" policy pushed forward personally by Iran's Supreme Leader Ayatollah Ali Khamenei. Hence, Ebrahim Raisi's visit to China is strategically important for politically and economically unstable Iran, as Beijing is Iran’s biggest trading partner and the only customer of its heavily-sanctioned oil exports.

According to data recorded by Iranian customs for the first ten months of the current Iranian calendar year—which ends in March—Tehran's exports to Beijing are worth $12.6 billion, while it imported $12.7 billion worth of goods from China. Moreover, lack of access to the US-led global financial system has also driven Iran toward more imports from Asian countries, with transactions increasingly based on local currencies rather than the US dollar.

From a geo-economic standpoint, Iran's foreign trade has witnessed a growing tendency toward Asia in the past decade. China and India's sweeping emergence partly explains this in the global economic arena. It appears that India, China, and to some extent, Russia are now the only countries that can benefit Iran financially in light of its isolation from the global market. For Japan, however, cheap oil imports are more critical, while the political agenda is less relevant.

Nonetheless, the level of political ties Tehran maintains with Beijing is way above that of New Delhi and Tokyo. The intensifying US-China trade war and rivalry have also created further ground for increasing cooperation between Iran and China. Therefore, Tehran is not interested in a possible China-US rapprochement soon, as it could lose its biggest trade partner.

The close trade partnership with Tehran is yet another source of confrontation between Beijing and Washington. Hence, the potential diplomatic thaw between the two would require Beijing to decrease the partnership level with Iran gradually. In this vein, some experts in Iran argue whether the Islamic Republic should be putting all eggs in the China basket.

No matter the nature of the close partnership, China maintains deep relations with the Gulf monarchies, arch-foes of Tehran, in addition to the growing trade with Iran. Such a move enables China to compensate for the level of economic partnership with the Gulf in case the ties with Iran would downgrade shortly. Nevertheless, for now, Beijing and Tehran duo pursue a pragmatic approach to bilateral cooperation in light of changing global geopolitical realities.