Are China’s growing ties with Gulf states coming at Iran’s expense?

Having signed a 25-year comprehensive strategic partnership agreement with Iran almost two years ago, China is due to discuss additional economic cooperation. But for the most part, the arrangements remain vague as geopolitical tensions rise.  

Arriving in Saudi Arabia last month, Chinese President Xi Jinping attended a series of meetings with the leadership of the Gulf states and pledged to create a “collective security framework” to stabilize the region. Following Xi's summit with Arab leaders, a joint communique was also issued which undermined Beijing’s strategic partner, Iran, by showing solidarity with some regional countries demands from Tehran. 

In the past, Beijing has maintained a safe distance from conflicts in the Middle East, but the joint statement clearly expressed support for the UAE's territorial claims.

"The leaders affirmed their support for all peaceful efforts, including the initiative and endeavors of the United Arab Emirates to reach a peaceful solution to the issue of the three islands — Greater Tunb, Lesser Tunb and Abu Musa — through bilateral negotiations in accordance with the rules of international law, and to resolve this issue in accordance with international legitimacy," the statement read. 

Located in the Strait of Hormuz, the three islands have been administered by Iran since 1971, right after the British withdrew from the region that is now the UAE. Consequently, they are also claimed by Abu Dhabi as part of its territory and this has been a long-standing issue with Tehran.

Understandably, Beijing’s involvement in the spat drew criticism from Iran. Chang Hua, the Chinese envoy to Tehran, was summoned to hear Iran’s “strong dissatisfaction" few days after the summit. The Iranian envoy to China, Mohammad Keshavarzzadeh, also lodged a protesting note to Beijing.

Adding to the China-UAE cooperation was their joint sponsoring of a United Nations Security Council meeting last week to discuss Israel's far-right minister Itamar Ben Gvir contentious visit to a holy site in Jerusalem. 

At the UNSC meeting called for by UAE & China, I called on all parties concerned to exercise restraint to prevent escalation of tensions in East Jerusalem. Israel, in particular, should stop provocation and unilateral actions vis-a-vis the historic status quo of the holy sites. pic.twitter.com/xEw5bvis1Z

— Zhang Jun (@ChinaAmbUN) January 5, 2023

Nevertheless, against this Gulf-China bromance, Tehran's foreign policy has limited options. 

For the first time, China has tried to please one strategic partner at the expense of the other and diverged from its balancing act between the Gulf monarchies and Iran.  

Hamidreza Azizi, a visiting fellow at SWP Berlin, told Al-Monitor that China’s position regarding the three islands is impacting the Iran-China relations in unprecedented ways.

“Beijing and Moscow know that Iran has no alternative. ... This was a watershed moment between Tehran and Beijing, a turning point from a strategic partnership to some sort of reliant role with China," he said. 

A few signs of better relations exist. The first shipping line linking China to Iran’s Chabahar Port was inaugurated this month, when a container ship docked in the southern Iranian port. Shortly before, China opened its first consulate general in the port city of Bandar Abbas, which is also the capital of Iran’s Hormozgan Province.

1st direct shipping line from China to Chabahar launched: Tehran (ISNA) - Managing Director of the Chabahar Free Trade-Industrial Zone, Amir Moghaddam announced that the first ocean liner from China docked at Chabahar port. https://t.co/enqBiW0zV0 pic.twitter.com/brKFvltnwM

— Tehran Bazaar (@TehranBazaar) December 31, 2022

But for various reasons, Beijing has also launched its Plan B. One reason is that the GCC states are not under sanctions and remain a stable market for investment. The failure of negotiations to revive the Joint Comprehensive Plan of Action (JCPOA) has hurt Iran. 

“With the JCPOA in limbo, the future is uncertain for Iran, and the implementation of the 25-year deal is next to impossible. We will probably see international sanctions on Iran and as a result, Chinese companies would try to avoid secondary sanctions," Azizi said. 

And now, the Iranian government is being blamed for not being able to ensure Beijing’s support on a matter of sovereignty. As the Iranian Reformist paper, Shargh Daily, warned last month that “if China and Russia become Iran’s strategic intermediaries with the world, we will be reduced to passive players in international relations.” 

Azizi noted that due to the widespread protests in Iran, investment confidence is weakened in Tehran.

“The prospects for stability are not bright for investment and Iran is getting out of the Chinese radar for doing business. As the Gulf countries have a balanced foreign policy, they are more interesting options for trade and business," he said. 

Iran could have moved away from its “Look East” policy if it had better relations with the West, but there is little space left to maneuver. 

A European diplomat posted in Islamabad, speaking to Al-Monitor on condition of anonymity, said Xi's visit to Saudi Arabia "did not go unnoticed in Tehran.”

He added that the reaction of Kamal Karrazi, the former Iranian foreign minister and head of the Supreme Council on Foreign Relations, confirmed the displeasure  "deep irritation" among Iranian leadership at a time when the Iranian side "was focused on strengthening relations with Beijing in the context of the ‘look east’ policy.” 

Karrazi last month said that China’s position on the territorial integrity of Iran as it relates to the islands was a mistake, comparing it to the Taiwan issue. "It was as if we take a similar position on Taiwan, which is part of China," he said. 

It seems Tehran and China are likely to drag their relationship without breaking up. 

“Iran has no interest in undermining this approach, especially in the context of its international isolation," the diplomat said. And, he added, favorable Chinese media coverage of the consulate-general in Bandar Abbas "indicates willingness to overcome the aforementioned misunderstandings.” 

Predictably, trying to salvage the situation, Chinese Vice-Premier Hu Chunhua visited the UAE and Iran after Xi's visit to Saudi Arabia. In Tehran, Hu discussed ways to enhance the 25-year comprehensive strategic partnership. 

Nevertheless, during his meeting with Hu, Iranian President Ebrahim Raisi did express “dissatisfaction” and demanded “compensation” for the recent position taken by China.