Iran and China empowered under Biden administration: Analysis

Beijing won’t let U.S. sanctions interfere in its unprecedented $400 billion investment in Iran.

By Majid Rafizadeh, Gatestone Institute 

The Chinese Communist Party has openly been helping the Iranian regime evade US sanctions — most likely due to what reports have been referring to as the weak leadership and “top national security threat” of the US Biden administration.

This Communist Chinese salvage operation could partially explain why the ruling mullahs of Iran see no incentive to halt their nuclear program or come to the negotiating table.

When the Biden administration reached out to Chinese Communist Party to cut its oil imports from Iran, a senior U.S. official, who spoke on condition of anonymity, told the Reuters news agency:

“We have used our sanctions authorities to respond to Iranian sanctions evasion, including those doing business with China, and will continue to do so if necessary. However, we have been approaching this diplomatically with the Chinese as part of our dialogue on Iran policy and think that, in general, this is a more effective path forward to address our concerns.”

China, however, immediately and defiantly refused to stop importing oil from Iran, and to comply with the US sanctions.

In another blow to the US, after many years of Iran trying to be a full member of the Shanghai Cooperation Organisation (SCO), SCO members finally agreed in September to elevate Iran’s status from “observer” to “full member,” even though the global financial watchdog, the Financial Action Task Force, had placed the Islamic Republic on its terrorism financing blacklist.

The SCO is a political, military, economic and security alliance that currently includes China, Russia, Iran, Pakistan, India, Tajikistan, Kyrgyzstan, Uzbekistan, and Kazakhstan. This alliance will likely further deepen the economic, political and military partnership between Iran and China and Russia, and assist the mullahs of Iran to defy the West.

In the face of these critical developments, the Biden administration has remained silent.

400 billion reasons Beijing backs Tehran

China has also defiantly been using the same line of argument that the mullahs of Iran resorted to regarding the 2015 Iran nuclear deal.

Even though the Islamic Republic is violating its agreements with the JCPOA and stonewalling the nuclear talks while inching closer to becoming a nuclear state, instead of pressuring the Iranian regime to halt its nuclear program’s advancement, Beijing is blaming the US for not lifting the remaining economic sanctions against the ruling mullahs and for not appeasing them.

As a Chinese Foreign Ministry spokesperson stated in a September 24 briefing, “The U.S. should redress its wrong policy of maximum pressure on Iran, lift all illegal sanctions on Iran and measures of long-arm jurisdiction on third parties, and work to resume negotiations and achieve outcomes at an early date.”

For the Chinese Communist Party, siding with the Iranian regime has several advantages. First, Beijing can likely use Iran as a bargaining chip during its trade war with the US. China, for instance, might agree to pressure the Iranian regime in exchange for the US lifting its tariffs on Chinese products.

Not only is the Iranian regime benefiting from Biden administration’s reportedly weak leadership, the Chinese regime is profiting as well. A 25-year deal, for instance, was recently signed between Iran and China. This deal, which appears similar to a colonial agreement, grants Communist China significant rights over the nation’s resources.

Leaked information reveals that one of its terms is that China will be investing nearly $400 billion in Iran‘s oil, gas and petrochemicals industries. In return, China will get priority to bid on any new project in Iran that is linked to these sectors. China will also receive a 12% discount and it can delay payments by up to two years. China will also be able to pay in any currency it chooses. It is also estimated that, in total, China will receive discounts of nearly 32%.

Another secret element of the agreement has a military dimension: China will deploy 5,000 members of its security forces on the ground in Iran.

Such a strategic and economic deal is a clear win for the Chinese Communist Party. The $400 billion, a small amount for the world’s second-largest economy, will be invested over 25 years; all the while, China will have full authority over Iran’s islands, gain access to Iran’s oil at a deeply discounted rate and increase its influence and presence in almost every sector of Iranian industry, including telecommunications, banking, energy, railways and ports.

Instead of appeasing the ruling mullahs, the Biden administration would do well to adopt a policy of maximum pressure on Iran and, through sanctions, cut the flow of funds to this predatory regime. For the ruling clerics of Iran, appeasement means only more weakness.

Dr. Majid Rafizadeh is a business strategist and advisor, Harvard-educated scholar, political scientist, board member of Harvard International Review, and president of the International American Council on the Middle East.