By Mohammad Mazhari

China can fill much of the gap left by Western companies in Iran: professor

January 22, 2022 - 19:28

TEHRAN – A professor from the George Washington University says that China can fill the gap left by Western companies in Iran, especially in terms of investment and access to Chinese banks.

“China can help Iran and fill much of the gap left by Western companies but they invariably involve standing up to the U.S. and busting U.S. sanctions if the Vienna meetings do not lift most sanctions on Iran,” Hossein Askari tells the Tehran Times.

“What Iran needs most from China is capital, direct investment, and access to Chinese banks to get around the restrictions imposed by U.S. sanctions that have restricted access of Iranian banks to receive and transfer funds through SWIFT,” Askari remarks.

He adds, “China has capital, technology, and companies that could partner in Iran.”

Following is the text of the interview:

Q: The 25-year Iran-China partnership went into effect after Iran's Foreign Minister Amir Abdollahian visited China. What are the subliminal messages of such a visit when the Vienna talks are going on?

A: As the U.S. flexes its muscle in the South China Sea, China is saying to the U.S. that it can also reciprocate in the Persian Gulf, which has been the U.S. backyard for about 75 years. That China can play a pivotal role in Vienna by supporting the U.S. position or frustrating it, as well as expand its own interests around the world. That China is not just a regional power but is now a global power with global interests and presence. It is telling the U.S. that if it messes around with Taiwan and Hong Kong, China can also mess with the U.S. around the world. 

“Iran can only truly benefit from any sanction relief and/or cooperation with China if it adopts tough economic reforms and puts its own economic house in order.”In the process, China is making it harder for the U.S. to pivot to the China Sea. Taiwan and Hong Kong matter more than the Persian Gulf to China. But it can use the Persian Gulf to both strengthen its position in Asia as well as develop deeper interests in the Persian Gulf. America cannot keep all the forces that it has in the Persian Gulf and be a threat to China in its backyard. It is putting pressure on the U.S. to moderate its pivot to Asia. All this at a time when the U.S. is facing threats from Russia. 

Q: What is the main impact of the 25-year Iran-China partnership on Iran's economy? Can China fill the gap left by Western companies in Iran?

A: The Partnership Agreement is a piece of paper. What matters are the details of the agreement and even more important the intentions of the two parties? Is China using Iran or does it see Iran as a long-term strategic partner that would be helpful in its struggle with the U.S.?  Yes, China can help Iran and fill much of the gap left by Western companies but they invariably involve standing up to the U.S. and busting U.S. sanctions if the Vienna meetings do not lift most sanctions on Iran.

What Iran needs most from China is capital, direct investment, and access to Chinese banks to get around the restrictions imposed by U.S. sanctions that have restricted access of Iranian banks to receive and transfer funds through SWIFT. China has capital, technology, and companies that could partner in Iran. But for China, it would mean it in turn becoming subject of U.S. sanctions—through secondary sanctions—unless there is a favorable outcome of the Vienna talks.

I believe that it is in China's interest to counter U.S. sanctions now and to take away this U.S. power if China wants to be true global power. There would be short-run costs for China but much long-term benefit if it takes on the U.S. now.

But I must add something. Iran can only truly benefit from any sanction relief and/or cooperation with China if it adopts tough economic reforms and puts its own economic house in order. I have been saying this for over thirty years but to no avail.

Q: Some critics blame Biden’s administration for a delay in restarting nuclear talks that pushed Iran into the arms of China. Do you think this claim is realistic given the hostility between Iran and the U.S.? 

A: I don’t think so. The only reason why Biden might have done this is that he thought economic conditions in Iran would deteriorate and make Iran more willing to compromise. On the other hand, with the passage of time, Iran could make more advances on its nuclear program. So on balance, I think Biden would like to get an agreement soon. But he also knows that if he accommodates Iran, he will get criticized in the U.S.

Q: How can China strike a balance between its ties with Iran and the Persian Gulf Arab states?

A: It will be tough. China is trying to play both sides. An agreement with Iran and more missile technology to Saudi Arabia to keep a balance. Recall that China secretly sold Saudi Arabia missiles that could deliver nuclear warheads about thirty years ago. So this is not totally new, it helps Saudi Arabia with technology and better able to be independent.  

But it will be tough for China to play the two sides. China’s best would be to bring the two sides together, bridge their differences.  This the U.S. did not do. Instead, the U.S. has sowed division between Iran and Persian Gulf Arabs.  If China works to bring the two sides together and it succeeds, then China will be the “master” of the Persian Gulf. “

Q: Given the alleged collaboration between China and Saudi Arabia to develop ballistic missiles, do you think China is going to expand its military influence and fill the power vacuum in West Asia, especially after U.S. withdrawal?

A: Absolutely yes. China needs the Persian Gulf for energy but it also gives it leverage over the United States.


 

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