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A New Meal For The Dragon: The Iran-China Strategic Partnership

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The Iran-China strategic project or ‘Comprehensive Strategic Partnership between Islamic Republic of Iran and People’s Republic of China’ as it is formally known, is a 25 year cooperation agreement signed in Tehran on March 27, 2021, between Iran and China. The final and formal details of the deal are yet to be announced, however, it covers a variety of economic activity, from oil and mining to promoting industrialisation, transportation as well as agricultural collaborations in Iran. The deal also supports tourism and cultural exchanges. It is a symbolic unfolding on the 50th anniversary of establishment of diplomatic relations between China and Iran. What is ironic is the deal’s arrival at a time when bipartisan consensus in the USA to reduce engagement with the Middle East has greatly strengthened. Undoubtedly, this deal is a strong signal in itself that the Middle East is going to become a potential hotspot of conflict and competition between the USA and China.


The deal could never have come at a better time for Iran. The country is desperate for cash in the aftermath of a series of US imposed sanctions that have crippled its economy. The deal will help Iran dodge those American sanctions while cash inflow simultaneously provides economic aid to the rulers of the country. At the same time, Iran will have a long time buyer for the oil it exports (which is a major source of its income) in the form of China. It is important to note that buyers for Iran’s oil had significantly reduced and this was a major cause of concern for it.

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Apart from this, there are also talks about creating a China-Iranian Bank as it would help Iran evade from the sanctions of the USA. This is a matter of grave concern as an Iran with a new lifeline and continuous cash flow possesses potential to alter the current world order.

The deal has been attacked by Iraninan Opposition that dubbing it as “Selling Iran’s Sovereignty”. It is unclear whether China will be establishing a permanent military base in Iran or not. However, if those who are against the deal are to be believed, China will be placing 5000 security and military personnel on Iraninan Soil which will significantly change the military dynamics of the region.

Image Credits: News India Express

On the other hand the deal is obviously of significant benefit to China. This is because it helps China essentially take control over another country outside the US led alliance. Also, this deal would mean that China gains continuous access to oil to fuel it’s rapidly growing economy and at the same time, develops good relations with a country that also aspires to crucify the United States’ global dominance.

It would also provide China with a new participant in its silk road initiative. However, there is a downside as well: Iran has a mission called ‘bleeding of the Saudis’ which it aims to unfold through Houthi proxies in Yemen, primarily because Saudi Arabia is a premier Sunni power in the Middle East and also because it is an ally of the USA. China is Saudi Arabia’s largest trade partner and Israel’s second largest partner, both of whom, for obvious reasons, consider Iran their major geopolitical threat. As a result, openly supporting Iran in this manner can be an impediment for China to deepen its ties with Saudi Arabia.Therefore, China will have to find alternative foreign policy measures to resolve this issue.


Immediately following the news, the quickest reaction was from the Iraqi public and intellectuals who now face more threat than ever. They came out in the media asking the government to make public and enforce the “secret agreement” which Iraq had signed with China during the reign of Adel Abdul Mahdi. It is important to understand that these measures are great examples of how soft power comes into play in international relations. International commentators are of the view that after the China Iran deal, China could contribute to internal settlements in Iraq and also take initiatives to develop Iraqi-Arab peace settlements, something that the USA’s diplomatic model is heavily investing in, and hence, project China as a strong competitor in diplomacy terms in the Middle East.

The deal comes at a time when China and India are intensely fighting for regional dominance. This means that for India, this agreement is an obvious source of worry. It is also important to understand the geopolitical context in which the deal has been signed. India’s relations with Nepal are not as good as they have been in the past. China is also bettering its relations with Myanmar and has developed relatively stronger ties with Sri Lanka, the Hambantota port being a good example of the same. Neither is China-Pakistan camaraderie hidden from Indian diplomats. One of the significant harms this deal is going to have on India is the extremely crucial Chabahar port strategic project which gives India direct access to Afghanistan through Iran as this access was rejected by Pakistan. The project was already delayed due to US Sanctions on Iran after which India has to obtain a waiver from the United States. Now, with this deal being signed, and the blatantly uncomfortable situation India and China have, it is difficult to predict the fate of this project.

For the United States Of America, this deal is a cause of immense worry and is being dubbed as a ‘major soft power victory’ for China by several commentators. It is important to understand that the threat being faced by the US is not a loss of the Middle East, rather China gaining traction in the region. As the USA has already decided to diplomatically back out of the region and focus on other areas, the way the Dragon is pouncing on whatever the USA deems fit to leave is fast becoming a major cause of concern. For the USA this deal is troublesome because though it has other sources of oil, China remains heavily dependent on the Middle East for its oil consumption. As a result, securing a viable source of oil for its consumption is going to make China a more troublesome player in international politics as seen from the US viewpoint. Therefore, this deal is not a loss for the United States but a gain for China. Since the details and text of the deal are not yet public, the USA has not initiated a strong comment or response to it. However, it does not take a rocket scientist to understand that foreign policy strategists of the US are all over the deal to decipher a way forward.


To conclude, China, unlike the USA, is heavily dependent on the Middle East to satisfy its oil demands. Therefore its interaction with the region is only going to grow from now on. The Iran-China deal is one issue addressed by the Chinese foreign minister during his tour of the Middle East, besides the formation of a regional security plan with Saudi Arabia, a meeting in Istanbul with his Turkish counterpart, and an announcement that the UAE will produce two hundred million doses of China’s Sinopharm vaccine. Meanwhile, Chinese state-owned companies are expanding investments in Israel, Saudi Arabia, and the United Arab Emirates as part of the Belt and Road initiative. China has claimed that the deal is not going to affect its relations with Saudi Arabia or other middle Eastern countries. Also, the countries in this region will be under pressure from the USA not to engage with China and as a result the region might get entangled in a cold war with China and Russia on one side and USA and the other European allies on the other side.

At the end, it is important to note that all the concerns and possibilities of threat/clash/conflict mentioned above are just predictions and estimates that political scientists are making on the basis of whatever information is available at their disposal. The details of the deal are not public yet and most probably they would never be. It is therefore very difficult to ascertain the future of conflict in the region or possible future geopolitical situation.


By Yashovardhan Singh

Yashovardhan Singh is a 1st year economics honors student who likes to study political and economic theories. He spends his day reading books or watching sitcoms.

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