These back-to-back developments – last year’s unexpected scandal caused by President Xi’s signing of such a fiercely anti-Iranian joint statement with the GCC and this weekend’s revelation of China’s dramatic underinvestment in Iran – indisputably prove that there are problems behind the scenes. China and Iran officially remain strategic partners, but some unseen factors are clearly responsible for Beijing’s reluctance to tap into Tehran’s full economic potential.
The Alt-Media Community (AMC) invested heavily over the years in convincing their targeted audience that China and Iran are practically allies with no differences whatsoever between them. The reason for spinning this narrative was to make them imagine that the forces driving the global systemic transition to complex multipolarity (“multiplexity”) are all on the same page. In reality, however, some problems are brewing in the Chinese-Iranian Strategic Partnership as evidenced by a recent official statement.
Iranian Deputy Finance Minister Ali Fekri publicly complained on Sunday about China’s paltry investments over the past year in comments reported upon by the Fars News Agency, which is among the Islamic Republic’s most reputable outlets. According to this high-level official, “China has invested nearly $185 million in Iran over [the 15 months since the end of 2022] which we are not happy with given the amount of negotiations and meetings we had.”
By contrast, Minister Fekri revealed, “The Russians had brought some $2.7 billion worth of investment to two petroleum projects in Iran in the past 15 months”, which he calculated amounts for around 45% of the total $5.95 billion that entered the country during that time. These facts come on the heels of last year’s unexpected scandal in Chinese-Iranian relations after President Xi Jinping signed a fiercely anti-Iranian joint statement with the Gulf Cooperation Council (GCC) in early December.
The AMC predictably tried to downplay that episode despite the tongue lashing that President Ibrahim Raisi gave visiting Chinese Vice Premier Hu Chunhua shortly thereafter that was reported upon by the reputable Tehran Times. He told his guest that “some positions raised during the Chinese president’s recent visit to the region triggered unhappiness and grudge among the people and in the government of Iran.” As is known now in hindsight, that scandal followed China already underinvesting in Iran.
These back-to-back developments – last year’s unexpected scandal caused by President Xi’s signing of such a fiercely anti-Iranian joint statement with the GCC and this weekend’s revelation of China’s dramatic underinvestment in Iran – indisputably prove that there are problems behind the scenes. China and Iran officially remain strategic partners, but some unseen factors are clearly responsible for Beijing’s reluctance to tap into Tehran’s full economic potential.
After all, according to Minister Fakri, both sides held some “amount of negotiations and meetings” over the past year on scaling up Chinese investments in Iran. This suggests that the decision not to go through with their plans was solely Beijing’s. Extrapolating from that observation, it could very well be that American and GCC influence played a role in China’s surprising geo-economic calculations that defied the AMC’s dogma about the People’s Republic relying on the Islamic one as its regional pillar.
The increased diplomatic engagements between China and the US since their leaders met on the sidelines of November’s G20 Summit in Bali can be described as being driven by the desire to explore a New Détente, or a series of mutual compromises aimed at achieving a new balance between them. This trend, which is expected to be among the most meaningful ones for shaping International Relations across the present year, seemingly influenced China to curtail its investments in Iran for the time being.
In parallel, China scaled up its investments in the GCC, which might have made any further speculative progress on the so-called “petroyuan” dependent on Beijing symmetrically reducing investments in Iran. It’s now known from Minister Fekri that China was already underinvesting in Iran prior to President Xi signing that fiercely anti-Iranian joint statement with the GCC despite some “amount of negotiations and meetings” between them during this time that they were supposed to scale up their investments.
This leads to the emerging conclusion that China was just buying time and “saving face” by holding these ultimately futile “negotiations and meetings” with its Iranian counterparts, all while scaling up its investments in the GCC instead and then initiating its New Détente with the US. The reason for this approach might have been to keep those Iranian options open in case its complementary outreaches to America and the GCC fell flat, after which China would simply pivot back to Iran.
Nevertheless, Iran wised up to China’s strategy and finally felt it worthwhile to call that country out via Minister Fekri’s statement. Considering that Russia’s investment there during that time was many orders of magnitude greater than China’s, it’s possible that Moscow can ultimately replace Beijing’s unfilled investments in the Islamic Republic. In fact, Iran might even reward Russia for its reliability and reportedly planned transfer of modern military-technical equipment with some of those same projects.
It doesn’t make much sense from Iran’s perspective to continue holding more “negotiations and meetings” with China over developing them after President Xi signed that fiercely anti-Iranian joint statement with the GCC and Minister Fekri just crossed the Rubicon by publicly calling the People’s Republic out for its unfilled investments over the past year. Nobody could have earlier predicted that Russia would invest so much more in Iran than China did, which shows who’s reliable and who isn’t.
The Islamic Republic would of course prefer to diversify its strategic investment partners by balancing out Russia with China, but Beijing obviously isn’t in playing ball, at least not for now. That being the case and since Iran has a pressing interest to continue its economic development, it thus makes perfect sense for Tehran to offer these unfilled Chinese projects to Moscow. It’ll of course remain to be seen whether it does, but the chances of it happening increase by the day given the trends that were just analyzed.
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