Iran China Business Intangibles
Recent pledging by the dragon to invest upwards of 400 billion USD into the Islamic Republic of Iran in a 25-year agreement has turned many heads.
China has been increasing its presence in West Asia in the past decade or so. Building a refinery with Saudi Aramco in 2016, and building the largest refinery in West Asia with Kuwait. China has inked deals with many nations such as UAE, Turkey, Saudi Arabia, Jordan, Egypt, Oman. Then there’s BRI already.
China is changing its West Asia policy to increase its reach. In the past many decades, the West: the US and Europe were the ones investing in West Asia (whose without a multitude of natural resources) and the countries were dependent on them for further funds which recently became scarce with events such as Arab Springs, Civil unrest, military and civilian coups, nuclear treaties. China is now filling the gap.
China gets the oil, lots of it and the assurance and it will keep getting it. Iran gets support and China’s money. The recent entrance of Huawei after Ericsson was banned to develop Iran’s 5G network is one such meaningful example. The deal will probably cover military, economic, telecommunications, infrastructure partnership.
But China and Iran did not build this partnership by liking each other. What they had in common was that they did not like the US and both were under US sanctions and isolated from the common world trade pratices. Donald Trump had a part to play by pulling the US out of the JCPOA. Hence, they came together but it does not comfort one to assure the sustainability of this partnership.
The timings of the signing of the recent Iran China deal is coming up just before Iran’s upcoming elections. Is the timing just a coincidence?
Another thing is that West Asia has been a place of the cold war and much of because of heavy interference in the domestic policy by national interests of other countries.
Meanwhile, New Delhi has maintained a strong neutral view with West Asian countries or any other country for that matter. India does not play favourites. And this is how it has been able to keep away from the trouble by not messing with other’s problems. It has long been India’s external affairs strategy. But such heavy investment of China endangers India’s multitude of investment in Chabahar Port which lets it skip Pakistan to access regions of Afghanistan and beyond.
