Iran’s regime and China’s economic relations have been a topic of discussion for some time. Although economic relations between countries typically bring some benefits to their people, it is difficult to make the same claim for Iran’s regime. The regime’s destructive nature casts doubt on the potential advantages of any foreign relations.
China’s economic relations with Iran date back to the 1980s. In recent years, these relations have grown stronger as China has become the regime’s biggest trading partner. In 2022, China’s trade with the regime amounted to around $15 billion. The two countries have also signed a 25-year comprehensive strategic partnership agreement, which includes economic cooperation and infrastructure development.
The agreement is so disastrous that even many of the regime’s officials and experts compared it to the Treaty of Turkmenchay signed on 21 February 1828, in which the Qajar monarchy forfeited large swaths of Iran’s territory to the Russian empire.
According to the state-run daily Nameh News on February 13, 2023, it appears that the Iranian regime is hesitant to prioritize the implementation of the 25-year cooperation agreement with China. The article stated that the Chinese believe that if Iran truly wishes to move forward with the agreement, it should expedite the operational and implementation phase. China is under increasing pressure from the United States, so it cannot afford to take 2 to 5 years to implement the agreement.
While at face value, this partnership has increased investment in and trade with Iran, it has significantly damaged its economy. One of the most significant challenges facing Iran’s economy is its over-reliance on oil exports. This dependence has made Iran vulnerable to fluctuations in global oil prices and restrictions imposed on oil sales.
China’s economic relations with Iran exacerbate this problem. While China is Iran’s biggest trading partner, it is also its biggest oil customer. This means that Iran is heavily dependent on China to purchase its oil, which gives China significant leverage over Iran’s economy.
Moreover, China’s economic engagement with Iran has also contributed to environmental damage and labor exploitation. In Iran’s southern Khuzestan province, for instance, Chinese firms have invested in oil and petrochemical projects, resulting in environmental pollution and harm to local communities. In other parts of the country, Chinese companies have been accused of exploiting Iranian workers by paying them low wages and providing poor working conditions.
China’s economic relations with Iran have also prevented the regime from diversifying its portfolio. Iran needs to move away from its dependence on oil exports by investing in non-oil sectors such as agriculture, tourism, and technology. However, China’s dominance in these sectors has made it difficult for the regime to develop its own industries and compete in the global market.
The impact of China’s economic relations with Iran is not limited to the economy. It also affects the Iranian people. Iran’s dependence on China’s oil market means that the Iranian regime has little incentive to address the concerns of its people, such as high unemployment, inflation, and corruption. Instead, the regime has prioritized its relations with China over the needs of its own citizens.
According to the former deputy for Asia and the Pacific of the Ministry of Foreign Affairs, Beijing is not interested in developing strategic relations with Tehran. Regarding the 25-year contract, there have been no tangible outcomes thus far.
The former official notes that China’s investment in Iran must be evaluated, especially considering that Iran has invested heavily in China without receiving similar investments in return. For instance, despite discussions of constructing a high-speed railway between Tehran and Mashhad, and between Tehran and Isfahan, no tangible progress has been made.
Ultimately, Beijing is primarily interested in pursuing business opportunities with the regime rather than deepening strategic ties, which would benefit the people and the country.
The state-run daily Khabar Online reported the damaging consequences of the Iran-China economic relationship. In an article published on December 12, 2022, the paper stated, “We must acknowledge that the Chinese, like all other nations, prioritize their own interests above all else. We appreciate that they have made this clear to some of our friends.”
Moreover, China’s support for Iran’s authoritarian regime has contributed to the regime’s repression of its own people. China has provided Iran with technology and expertise in surveillance and censorship, which the regime has used to monitor and control its citizens. This has led to the suppression of free speech, dissent, and opposition in Iran.
In conclusion, China’s economic relations with the regime are causing significant damage to Iran’s economy, environment, and people. The over-reliance on oil exports, the dominance of Chinese firms in non-oil sectors, and the regime’s prioritization of its relations with China over the needs of its people have all contributed to Iran’s economic and social challenges.