By Professor Fan Hongda

China-Iran energy cooperation depends on developing comprehensive strategic partnership

February 15, 2021 - 22:45

Recently I was invited to participate in a conference on "Perspectives of Iran-China Economic Cooperation in the energy sectors". Indeed, energy cooperation should be one of the basic factors promoting the development of contemporary China-Iran relations. But this is not the case now.

The rapid development of China's economy for decades has been supported by the huge consumption of energy. The changes in Chinese lifestyles, such as the popularization of family cars and gas, also require huge amounts of energy such as oil and natural gas. China's oil and natural gas imports surpassed the United States and Japan in 2017 and 2018 respectively, becoming the world's number one importer.

Over the years, China’s imports of oil and natural gas have continued to rise. According to data from China Customs, in 2020 China imported 542.386 million tons of crude oil and 101.661 million tons of natural gas. However, Iran, which has the world's fourth-largest oil reserves and the largest natural gas reserves, did not appear in the list of China's top ten oil and gas imports in 2020. This must be something wrong.

U.S. sanctions limit China-Iran energy cooperation 

There is no doubt that the sanctions against Iran initiated by the United States have had a very negative impact on China-Iran energy cooperation. Moreover, energy cooperation in international exchanges is often not just an economic behavior, it is also a political issue in many cases and often affected by the international situation. This is very obvious in the energy cooperation between China and Iran.

China is an emerging power. When China began to seek energy cooperation with Iran, Western powers had already established close energy cooperation relations with Iran. Later, the international sanctions advocated by the United States forced the major Western oil companies to withdraw from Iran, while China continued to pursue a friendly policy with Iran. In this way, China-Iran energy cooperation ushered in an ideal period. 

However, with the intensification of the so-called Iranian nuclear crisis, especially the "extreme pressure" imposed by the U.S. Trump administration on Iran, energy cooperation between China and Iran has once again encountered serious difficulties. This is the fundamental reason why Iran was not among China's top ten sources of oil and natural gas imports in 2020.

In fact, even without U.S. sanctions, I think it is currently not easy for Iran and China to have deeper bilateral cooperation including energy. If Iran and China really want to deepen their bilateral relations, they must resolve some of their own problems.

China and Iran need more mutual trust
  
As far as I know, there are some voices in Iran that oppose the development of comprehensive relations with China. What I want to say is that China is indeed Iran's ideal partner. Even if Iran’s relations with the United States and other Western countries could be improved, Iran should also attach importance to the development of Iran-China relations from the perspective of national interests. Why?

Iran is in urgent need of large investment in many fields, including the energy sector, and China, which has a huge demand for imported energy, happens to have a stronger willingness to invest abroad. China has made great progress in technology in many fields, and it is no longer appropriate to regard "Made in China" as a low-quality product. More importantly, China has not invaded other countries even in the most powerful period in history. The most popular idea of international relations in China is win-win cooperation. Iranian friends should give China more trust when developing relations with China.   

There are also voices in China that oppose comprehensive cooperation with Iran. Some Chinese worry that the overall development of China-Iran relations will upset Washington, Arab countries and Israel. There are also some Chinese who worry that Tehran's current hope to establish a good relationship with China is only a "political expedient". In China, I have always emphasized that Iran has a strong ability to rejuvenate, and the rising China needs the friendship of powerful regional countries like Iran. When developing relations with Iran, China needs more confidence. 

Back to the issue of China-Iran energy cooperation. Because of the strategic nature of energy cooperation and the sensitivity of China and Iran's respective foreign relations, it is difficult for the two countries to have very significant energy cooperation if the development of the bilateral comprehensive strategic partnership can’t achieve major breakthroughs. 
      
 Fan Hongda is professor of the Middle East Studies Institute of Shanghai International Studies University, China
  


 

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