Will the China-Iran deal change the Middle East?

As Beijing and Moscow fill the vacuum being left by the US, it remains to be seen if they will tame Tehran

Iranian Foreign Minister Mohammad Javad Zarif, right, and his Chinese counterpart Wang Yi, pose for photos at the start of their meeting in Tehran, Iran. AP

It should come as no surprise that China and Iran signed a 25-year agreement this week. It has been touted many times in recent years, although negotiations over the details have remained a secret. What is interesting, however, is the timing. It comes within 100 days of US President Joe Biden taking office and his desire to reconfigure America’s relations with both countries. Now, it seems Beijing and Tehran have moved past the era of fearing US sanctions following the departure of Mr Biden’s predecessor, Donald Trump.

The strategic agreement covers multiple areas, including politics, the economy and military and defence co-operation. China has also agreed to joint drills, port development in Iran and $450 billion worth of investment in energy, petrochemicals and other sectors.

President Biden has, in his own words, been “concerned about that for years”. But beyond being concerned for years, he may want to explain what he intends to do about the challenge posed by China and Iran, as well as by Russia, to his country, with all three countries having judged that the Biden administration will relinquish sanctions with a view to rid itself of the commitments and legacy of the previous Trump administration. President Biden must also engage Arab states’ positions vis-a-vis the China-Iran agreement, which has implications for the entire region.

There is co-ordination between Russia and China’s diplomatic efforts. Both powers are wary of the Biden administration and have favourable relations with Iran. Today, Tehran is also resentful of the Biden presidency, either for tactical reasons related to upcoming negotiations over returning to the 2015 nuclear deal, or as part of its strategic decision to strengthen its partnerships with China and Russia.

Interestingly, even as they prioritise their relations with Iran, China and Russia are also deepening co-operation with the Gulf states. Last month, Russian Foreign Minister Sergey Lavrov toured the region, as did Wang Yi, his Chinese counterpart. Mr Lavrov also visited Beijing to co-ordinate the two countries' strategies regarding relations with the US, the Gulf states and the Middle East amid the Biden administration's perceived downgrading of the region in its list of priorities.

Arab states will continue to maintain close ties with the US – ties that neither China nor Russia can match right now, unless a radical shift occurs in the balance of these relations. Yet their evolving ties with China and Russia, even if they are focused on the economy, have important implications that the US would do well to not downplay. Today, China and Russia are putting forward many initiatives in the Middle East, a region that was considered almost entirely in the American sphere of influence.

Following the China-Iran deal, Tehran is likely to receive an annual windfall of up to $20 billion. This will encourage the regime to pursue its domestic and regional projects with even more vigour, including strategic operations inside Syria, Iraq, Lebanon and Yemen. Regardless, China’s primary interest in the region is gaining a strategic position in the Middle East – not dissimilar from Russia’s foothold in Syria, courtesy of its relations of the Bashar Al Assad regime in Damascus.

Iran has effectively come under China’s security umbrella, with Beijing gaining a foothold in Iranian ports and in some Arab countries, such as Lebanon, where Iran has influence. But in the event of a direct war between Iran and Israel, will China be willing to help its ally? Or is there a Chinese-Russian deal that complements the agreement, bearing in mind that Moscow has sought to play the role of mediator between Iran and Israel, as well as between Syria and Israel?

US President Joe Biden has an opportunity to reset US strategy vis-a-vis Iran. AFP

Much like China aims to expand its influence globally through its “One Belt, One Road” initiative, its strategic pact with Iran will help increase its foothold in the region through Iran’s strategic location in the Gulf. But will China protect Iran militarily if Tehran were to escalate tensions in the Gulf waters, or if it continued to back Houthi attacks in the neighbourhood? Given advancements in China’s relations with the Gulf states, it will seek de-escalation.

These relations will, therefore, be important as these states seek to leverage Beijing’s partnership with Tehran to contain Iran’s incursions in the region. Only then will it even be possible for all the stakeholders to dream of a grand bargain between Iran and the US.

Arab states' evolving ties with China and Russia have important implications that the US would do well to not downplay

As of now, China and Russia share frosty relations with the US. Both powers see Iran as an important card to use against the Biden administration. Moscow, therefore, views the China-Iran pact as complementary to its own relations with Tehran. It also sees its attempted sponsorship of solutions to some of the conflicts in the region as a means to shore up its presence and negotiating hand – in a way that allows it to compete with Washington. It has bet big on Israel in this context, seeking to become a bridge between Israel, Iran and the Arab states.

At the annual conference of the Valdai Club, which plays a role in shaping Russian policy in the Middle East, Mr Lavrov presented a number of proposals. To some extent, these proposals build on the achievements of the Trump administration vis-a-vis the Abraham Accords, which have launched a new era of peace and co-operation between the Arab states and Israel. Moscow’s view is that the Biden administration is not ready to play a significant role in the Middle East, and that drafting a clear policy from Washington will take time, which creates an opportunity for Moscow to fill the vacuum through swift, bold action.

It aims to sponsor an accord between Iran and Israel, which has yet proved a far-fetched notion, but whether the China-Iran pact can move the needle remains to be seen.

Either Israel will begin to view Iran slightly differently, now that it has China’s backing – or mutual hostility will increase to match the rising tensions between their respective allies in Washington and Beijing. Within this context, US-China relations will also be interesting to watch.

Raghida Dergham is the founder and executive chairwoman of the Beirut Institute and a columnist for The National