The land and territory that constituent Iran today is significance for China for both political and economic reasons. It is, therefore, Beijing has agreed to invest billions of dollars in its oil and transport sector, despite the threats of the US to impose the “secondary sanctions” on companies and countries that continue economic relations with Iran.
Importance of Iran for China is described as follows:
Pressure tactics against the US:
The good economic relations of China with Iran will act as a pressure tactic on the US to stop its trade war with Beijing. At present, the US has imposed stringent economic sanctions on Iran to bring it on its knee and force Tehran to abandon its nuclear ambitions and foreign policy objectives in the neighboring countries. However, Iran proved to be a tough opponent. As a result, the US imposed some harsh economic sanctions.
Under these circumstances, the partnership of China will not only provide Tehran with a much-needed economic respite, but also strengthen its tougher standing against Washington. Consequently, the pressure will be mounted on the US that may force it to soften its trade war against China to draw Beijing out from Iranian relations.
Another economic corridor besides CPEC:
The friendly relations will provide China with another strategic window, besides China Pakistan Economic Corridor, incase of any disruption of CPEC by India or internal terrorism. China is the largest trading nation of the world with total trade estimated at $4 trillion. It will not take a risk by relying on only one trading route for its economic activities. It was the reason that it started to construct CPEC to create a safe and alternate corridor, a part from its traditional passage from South China Sea. Hence, Beijing will also try hard to develop an alternative of CPEC incase of any emergency and only Iran provides such an opportunity to Beijing via its Chabahar port. However, peace in Afghanistan is fundamental pre-requite for this alternative route and China is moving fast to solve Afghan issue for this purpose as well.
Besides, the partnership of China with Iran will also kick India out of Tehran and reduce its dream to develop an alternate corridor via Iran to ashes. In order to scale down the influence of CPEC and counter the growing domination of China in Asia, India promoted its relations with Iran and wished to develop its Chabahar port to diminish the mastery of CPEC. However, after China’s drift towards Iran, New Delhi will find it hard to achieve its interest there.
Uninterrupted oil supply for China:
China is the fast growing industrial country. It has the world’s largest industrial output. In 2016, it is estimated that the country produced $4.566 trillion of industrial products. However, it needs oil to keep running its industries. Currently, it relies on American allies like Saudi Arabia and UAE for its oil import, which poses a grave threat to the largest trading nation. It wants secure and uninterrupted oil supply apart from American partners. The only country that can fulfill the oil requirement of China is Iran. It is, therefore, Tehran is very crucial for Beijing. Together with Russia, Iran can supply required oil to China obviating the need of Saudi Arabia.
Largest economic market for China:
Iran will provide another crucial economic market for China. It is known fact that the European countries were the largest trading partners of Iran before the economic sanctions of the US. These countries actually initiated nuclear negotiation of the US with Iran to get the sanctions lifted owing to their economic interests. When Obama successfully reached at an agreement with Iran in 2015, Hassan Rouhani, made its maiden foreign trip to these countries and signed billions of dollars investment with their companies. It manifests the importance of Iran for foreign investments.
However, China will get an opportunity to replace the European countries as the largest economic partner. Iran is rich in natural resources and Chinese oil giants will get a chance to explore more oil and gas of the country. Besides, Beijing will install some mega industries like automobiles and so on along the new corridors the same way it has agreed to do in Pakistan. The good relations will further increase the overall trade of China.
Extend of China’s BRI vision:
The new corridor from Iran will help China to extend its Belt Road Initiative (BRI) vision to different countries via land route. It can reach Eastern European countries and Middle East without setting foot on sea. Besides, It will integrate CPEC with Iran and further facilitate China to occupy more markets to sell its merchandise.
With the help of Iran, China can achieve regional peace. Iran enjoys good influence over regional countries like Iraq, Syria, Yemen and Afghanistan. It has capacity to defeat any terror group or force any regional power to make a compromise in power sharing. For instance, it aided Iraqi government in defeating ISIS. Political settlement in Syria, Afghanistan and Yemen is only possible with the help of Iran, as it enjoys significance influence over some groups in these countries. China wants peace in the region and its partnership with Iran and the platform of Shanghai cooperation Organization (SCO) can be effectively used to achieve regional peace.
Thus, Iran is crucial for China because it will help Beijing to push more pressure on the US, provide China another economic corridor besides CPEC, ensure uninterrupted oil supply, provide the largest economic market, extend its BRI vision and aid to bring regional peace.