Is China-Iran Axis A Myth Or Gamechanger?

On 27 March Chinese Foreign Minister Wang Yi and his Iranian countarpart Mohammad Javad Zarif signed in Tehran a Comprehensive Strategic Cooperation Agreement between the two countries, expressing a desire to increase cooperation and trade relations over the next 25 years.

This Agreement has been described as a massive change in Sino-Iranian relations that, according to media reports, may see China invest about USD 400 billion in Iran. The question arises- is this a myth or a real game-changer in regional relations?

The document signed between the two sides is an expanded version of a statement made during the visit of Chinese Leader Xi Jinping in Tehran back in 2016, pledging bilateral cooperation on political, cultural, energy, trade, security and defense issues over 25 years.

At that time, the two countries signed 17 agreements and also agreed to increase bilateral trade more than ten-fold to USD 600 billion in the next decade, as China pursues its BRI (One Belt One Road Initiative).

The BRI is an ambitious network of road, rail and port routes that will connect China to Central Asia, South Asia, the Middle East, and Europe. It should be noted, however, that China’s pledge to increase investment tenfold has little to show five years later.

An 18-page draft of the agreement published by The New York Times last summer listed nearly 100 projects to be funded by Chinese investments and are expected to be a part of Xi’s ambitious BRI, extending China’s strategic influence across Eurasia.

These 100 projects include airports, high-speed railways and subways, that will improve the lives of most Iranian citizens. In return, Iran is to provide regular and heavily discounted oil supplies to China for 25 years.

Despite a lot of press reports, there is no mention in the Strategic Cooperation Agreement about a specific amount to be invested by China in Iran. The document is by and large a list of areas in which China will engage with Iran during the next 25 years.

Zhao Lijian, the Spokesman of the Chinese Foreign Ministry, replying to a question about the agreement, said: “The plan focuses on tapping the potentials in economic and cultural cooperation and charting the course for long-term cooperation. It neither includes any quantitative, specific contracts and goals nor targets any third party, and will provide a general framework for China-Iran cooperation going forward.”

The Strategic Cooperation Agreement between China and Iran could change the assumptions of the West about Chinese ambitions in the Middle East region and may lead to a weakening of US influence in this volatile region of the world. Iran, which has been severely affected by US sanctions and international isolation, sees China as throwing it a lifeline and views the agreement as the beginning of mutually beneficial relations.

Some analysts describe the Strategic Cooperation Agreement as “destabilizing” and “a direct threat to US goals in the Middle East”, while others started calling China and Iran “the new Axis of Evil.”

The fact that China is a world power that can afford to defy the US and can ignore sanctions imposed by the US Administration is something that worries President Joe Biden. According to US officials, the agreement could also make way for Chinese military bases in Iran, fundamentally changing the region’s geopolitics.

Some press reports claim that the new US Administration is trying to rally allies against China, something which Secretary of State Antony Blinken has described as the world’s “greatest geopolitical test.”

In the strategic realm, the proposed draft talks about deepening military cooperation, with “joint training and exercises”, “joint research and weapons development” as well as intelligence sharing.

In an interview with Al-Arabiya, Chinese Foreign Minister Wang Yi stressed that “China is consistent in opposing the unreasonable unilateral sanctions imposed on Iran by other countries, because they violate the international law and are an affront to human conscience”.

Wang added that China stands ready to work with Iran and other countries to jointly oppose the acts of bullying by powers, uphold international equity and justice and defend the basic norms of international relations.

Dr William Figueroa, a specialist in Sino-Iranian relations, points out that while China remains Iran’s top oil importer, “Chinese firms have not increased investment, imports, or exports at the exponential levels pledged in 2016, and are not likely to do so in 2021 either. The deal is unlikely to fundamentally threaten the balance of power in the Middle East. China tends to choose stable relations with geostrategic advantages over volatile ones likely to spark conflict. For all its propaganda, China, like Iran, is more interested in its immediate geopolitical goals than a revolution.”

Several experts on Sino-Iranian relations, like Jonathan Fulton, senior fellow at Atlantic Council, describe the Agreement as “a list of things Iran and China hope to do, under perfect conditions”, while Lucille Greer and Esfandyar Batmanghelidj, said that the agreement is “not as alarming as it sounds.”

In conclusion, it can be said that relations between China and Iran are going to improve due to the agreement is not a myth. It will give the Iranian side some breathing space, helping it break somewhat the diplomatic isolation imposed by the US.

At the same time exaggerated concern that the agreement will change the geopolitical map of the region are most probably unfounded.

(The views and ideas expressed in the article are solely of the author. – ANI)

Biden And India: The Way Forward in Asia

The United States of America (US) will inaugurate Joseph R Biden as the President from January 20, 2021. New Delhi and many governments around the world have begun to speculate the kind of relationships the Biden Administration will establish with them. In the context of India, the relationship has seen upswing since the Indo-US Nuclear Deal under the Bush II Administration. It achieved new heights and rhetoric with public display of bonhomie between President Trump and PM Narendra Modi. It will, however, be a grave mistake to disregard it as only rhetoric and on the other hand consider the same in euphoric terms. That moment also had tremendous difficulties with Trump at the helm.

During the Biden Presidency, the scepticism around Trump’s commissions and omissions will no longer be there as Biden is a politician with an outstanding track record and experience at both domestic and international levels. As a Vice-President in the two Obama Administrations (2009-2016) he was responsible for some key decisions regarding policy towards South Asia.

China figures prominently in the United States calculus for the region. The Biden administration is very likely to carry forward the “Rebalance to Asia and Pacific” and “Indo-Pacific” idea, with the Quad as its initial operational strategy against the Chinese Maritime Silk Road Initiative (MSRI). Furthermore, India has resisted China’s attempts to bully countries in the South Asian region.

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In terms of geopolitics, therefore, US will maintain India as its major ally in the region. The signing of Logistics Exchange Memorandum of Agreement (LEMOA), COMCASA and BECA during the Trump presidency has strengthened the partnership has been raised to strategic level by Washington. It finally seems that the US has decided that along with its long-standing major allies in East Asia, India is a key actor to balance China.

Joe Biden has been critical of Pakistan’s approach to its neighbourhood in the west in Afghanistan and its support to the insurgent groups operating from Pakistani territory. During the first Obama administration as Vice-President, Joe Biden was part of the decision making which led to the Abbotabad strike for Osama Bin Laden’s execution.

Due to Pakistan’s support to terrorist groups operating in Afghanistan and India, Biden’s efforts led to suggestion of a number of stringent conditions incorporated in the Enhanced partnership with Pakistan Act, 2008. The conditions related Pakistan’s support to Al Qaeda, non-interference of the Army in judicial and political processes and the funds ($ 7.5 Billion) were not to be used by the Army. These caveats ultimately led to a major blowback by the military in Pakistan and created a rift between the two countries.

Trump Presidency’s overt show for India and Indians in the US was closely scrutinized because of its frequent calls for limiting immigration in various categories, especially H1B visas. Indian immigrants and people of Indian descent have been at the forefront of the development of American technology industry and innovation. This contribution was frequently invoked against Trump’s calls for indigenization of major industries and limiting migration and citizenship visas.

Biden on the other hand has promised to expand high-skilled visas positively impacting mobility of Indian tech graduates. It is expected that the new administration may revoke the suspension of work permits of spouses of H1B visa holders imposed by Trump. This also has positive implications for Indians employed in the United States.

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An election promise by Joe Biden about higher taxation for the corporates in the US may be beneficial for India as this can drive out investments to overseas destinations. India with its reduced tax rates can be one such attractive destination for such investors and the growing international partnership between the two countries provides the right environment. India on its part has to create conditions favourable for investors with reduced red tape and bureaucratic impediments.

US Foreign Institution Investors (FII) account for more than 30% of total FIIs in India making them the most important actors in the Indian financial set up since 2000. Similar speculations have been made for the enhancement of trade by a number of economic pundits because the Trumpian ideas of protectionism for the US may be abandoned. Trump Administration removed India from the Generalised List of Preferences in June 2019. India can expect a review of the list under the Democrats administration.

Biden’s larger outlook for South Asia and his experience combined with Antony Bliken’s knowledge of the region may lead to enhanced partnership with India. On the other hand, it must be taken into account that Americans have a penchant for realism and it still is the most important theoretical strand guiding US foreign policy.

New Delhi without being euphoric about the unprecedented engagement with and attention from the mighty US may do well to remember that India has a strategic location vis-à-vis China in Asia and the Indo-Pacific and the US needs a strong ally in the region to counter/contain the Chinese. That this realism is the original and real driver of the United States’ approach towards India since the beginning of the millennium.