IranSource | Understanding and Analyzing a Multifaceted Iran

January 25, 2017
On December 1, 2016, Congress passed a 10-year extension of the Iran Sanctions Act. Tehran vowed to retaliate, and said it considered the extension a violation of the Joint Comprehensive Plan of Action (JCPOA), signed with six major powers in 2015 to restrict the development of Iran’s nuclear capability in exchange for global sanctions relief.


The outgoing Obama administration waived implementation of the sanctions, as required by the JCPOA, but the new Trump administration could take a different stance. Even if the U.S. refrains from threatening foreign companies with sanctions, as stipulated by the Iran Sanctions Act, primary U.S. sanctions against Iran will continue and could well intensify.


Suffering from an increasing number of trade restrictions over the years from the United States, Tehran has had no choice but to seek other partners to survive in a competitive global market. China has become Iran’s most crucial partner to satisfy its trade hunger.


Today, China is both Iran’s biggest export and import market. According to this research, from 2000 to 2014, China’s share of Iran’s exports jumped from 4% to 49%, mostly crude oil, and its share of imports increased from 5.1% to 45%. Iran also plays a significant role in China’s One Belt One Road Initiative, and it connects the important railway line that provides China’s access to the Arab states along the Persian Gulf. In January 2016, China and Iran agreed to increase trade to $600 billion over the next ten years. Mehr News agency reported on January 18, 2017 that in February the two countries will sign a $3 billion contract to upgrade Iran’s oil refining capacity.


The close ties between China and Iran have gone beyond trade to defense cooperation. On September 20, 2012, for the first time, Chinese warships appeared in the Persian Gulf for a joint exercise with the Iranian Navy. During a meeting with Iran’s defense minister on October 15, 2015, a Chinese admiral expressed China’s willingness to deepen its military ties with Iran. A defense cooperation deal was signed on November 14, 2016, during which Iranian defense minister Hossein Dehqan stressed “the upgrading of relations and long-term defense-military cooperation with China is one of the main priorities of the Islamic Republic of Iran’s defense diplomacy…”


Two major factors contribute to a solid foundation for this close relationship. First, both China and Iran are authoritarian states. Second, they share a critical view towards the influence of Western power and in particular, U.S. leadership. To China, Iran is a strategic partner that can grant it direct access to Middle East affairs. To Iran, China is a powerful partner to counter the influence of the United States.


This close bond between China and Iran has become a growing concern for the United States. Iran’s several missile tests after signing the nuclear deal have raised suspicions about Iran’s commitment to the agreed terms among U.S. policymakers. The U.S. also accuses the Iranian government of sponsoring terrorist activities. On June 2, 2016, Iran was again listed as the top state sponsor of terrorism in the State Department's annual report.


China is a major supplier of advanced weapons to Iran. According to this report, China is Iran’s key provider of advanced Anti-Ship Cruise Missiles (ASCMs), and is suspected to have assisted Iran’s development of Land Attack Cruise Missiles (LACMs). Reports show that Iran has a history of converting Chinese-supplied ASCMs such as Silkworms into longer-ranger LACMs. In August 2015, Iran ordered 150 advanced J-10 fighter jets from China. The U.S. sees a stronger Iran as a major security threat to its Middle East allies, such as Israel and Saudi Arabia. Washington, therefore, is highly concerned with China’s engagement in Iran’s armaments advancement.


On January 20, 2017, Donald Trump became the 45th president of the United States. Though concerned about some of Trump’s campaign promises and abrasive tweets that might inflame tension in the Middle East, Gulf leaders are generally optimistic that Trump will help them to counter Iran. During the campaign, Trump has repeatedly expressed his disapproval of the Iran nuclear deal, and pledged to either end it or change its terms substantially. If he keeps his pledge, a more challenging future for U.S.-Iran relations should be expected.


China, on the other hand, maintains strong support for the JCPOA. During a joint news conference with Iranian Foreign Minister Mohammad Javad Zarif in Beijing on December 5, 2016, Chinese Foreign Minister Wang Yi made it clear that China would not back off from the deal. Iran also reaffirmed its support. “We will not allow any party to unilaterally undertake any actions that are in violation of the nuclear agreement. This is our and China’s position,” Zarif concluded.


The more the U.S. tightens its policies towards Iran, the closer it will push Iran toward China and Russia. Iran has been suffering from corruption, inflation and economic instability for a long time. The poor domestic economic environment has fueled people’s anger towards elites. Therefore, turning around the country’s economic problems is Iran’s top priority. Thus, if the U.S. continues to push Iran to the edge, Iran will have no choice but to rely on China more and to avoid the risk of losing this important partner, Iran will be more likely to stand with China in global disputes


Iran has not yet commented in detail about Trump since the inauguration, showing signs that Iran is careful and still hopes to retain a relationship with the U.S. History has proven repeatedly that endless punishment is never a long-term remedy. Coming from a business background, Trump should understand the importance of incentives in making progress. Considering Iran’s geographic importance and its share of global natural resources, the U.S. cannot afford to lose Iran. It would therefore be advisable for the U.S. to reinforce the existing nuclear deal rather than abandoning it.


 Ivy Yang is an intern at the Atlantic Council’s Rafik Hariri Center.

RELATED CONTENT