Dr. Mohammad Salami‏‏

Over the decades, the Middle East has experienced various social, economic, and political crises, but the war between Israel and Hamas since October 7 has brought the situation to a head. This war was met with a wave of support throughout the region for Palestinians and has increased political pressure to end the war.Regional involvement in the political, economic, and social fallout of this war has also meant that the war’s effects are felt beyond the region. Chaos and insecurity have spread to the entire international community.Escalating tensions between the "Axis of Resistance" and the West have taken the form of Houthi attacks on commercial ships in the Red Sea, as well as more than <a href="https://www.npr.org/2024/01/24/1226533568/us-iraq-militia-sites-missiles-yemen" rel="noopener noreferrer" target="_blank">150 attacks</a> by Iraqi and Syrian militias on US bases and border attacks between Lebanon and Israel. The US has repeatedly <a href="https://www.aa.com.tr/en/world/us-opens-door-to-sustained-response-to-attack-that-killed-3-troops-in-jordan/3122507" rel="noopener noreferrer" target="_blank">blamed</a> Iran for the latter’s financial and moral support of the Axis of Resistance.In this situation, the world now needs a mediator more than ever to reduce tensions in the Middle East and prevent the crisis from spilling over to other regions. China has been mentioned more than once in the last two weeks, but will Beijing welcome this role?China has many interests in reducing tensions in the Middle East. The Middle East is one of the most significant regions for Chinese trade and is an integral part of its Belt and Road Initiative (BRI). Since 2020, the Middle East has <a href="https://gjia.georgetown.edu/2023/06/02/chinas-increasing-role-in-the-middle-east-implications-for-regional-and-international-dynamics/" rel="noopener noreferrer" target="_blank">surpass</a>ed the EU in trade with China. Any insecurity in the Middle East endangers China’s investments in this region. In 2022, Middle Eastern countries will receive about 23 percent of China’s BRI funding, up from 16.5 percent last year.In addition, the security of the Red Sea is essential for Beijing. Sixty percent of China-EU trade <a href="https://unherd.com/2024/02/china-is-winning-the-battle-for-the-red-sea/" rel="noopener noreferrer" target="_blank">passes through</a> the Suez Canal. Insecurity in the Red Sea has made trade more time-consuming and increased the costs of transportation and shipping insurance. By 25 January of this year, the average cost of shipping a 40-foot container from Shanghai to Genoa spiked to $6,365, an increase of 464 percent from two months earlier. Also, China has invested in Egyptian and Saudi ports on the Red Sea. Chinese state shipping giant COSCO now owns 20 percent of the stakes of the East Port Said container terminal on the Suez Canal.China has played a relatively active role in negotiating a ceasefire and is trying to show that it can be an ally to the Arab world in ending the war. In a last-ditch effort on 21 November&nbsp;2023, Chinese leader Xi Jinping <a href="https://www.mfa.gov.cn/eng/zxxx_662805/202311/t20231121_11184750.html" rel="noopener noreferrer" target="_blank">proposed</a> a two-state, three-way solution at a virtual BRICS meeting. However, for many reasons, China is not willing to directly use its power to alleviate tensions in the Middle East or leverage its influence on Tehran.On 15 November 2023, President Joe Biden met with Xi Jinping in San Francisco and <a href="https://thesoufancenter.org/intelbrief-2023-december-4/" rel="noopener noreferrer" target="_blank">urged</a> him to push Iran to rein in its regional allies. On 26 January 2024, Reuters <a href="https://www.reuters.com/world/middle-east/china-presses-iran-rein-houthi-attacks-red-sea-sources-say-2024-01-26/" rel="noopener noreferrer" target="_blank">claimed</a> that Beijing had pressured Iranian officials to halt Houthi attacks in the Red Sea by threatening to cut back bilateral trade if the attacks did not stop. However, about a month has now passed, and Houthi attacks have continued.China is more concerned about its economic than political interests in the Middle East. It is focused only on obtaining guarantees to protect its direct interests in the Red Sea and the Middle East, and does not want to get into international policing. On the other hand, China does not want to go along with Western sanctions and accusations against Iran and put Tehran under more pressure because Beijing has more extensive economic ties with Iran than the West does.From 2013 to 2022, China was Iran’s most important <a href="https://iranprimer.usip.org/blog/2023/jun/28/iran-china-trade-lifeline" rel="noopener noreferrer" target="_blank">trading partner</a>. China has <a href="https://farsnews.ir/news/14020913000475/%D8%A7%D8%B1%D8%B2%D8%A2%D9%88%D8%B1%DB%8C-30-%D9%85%DB%8C%D9%84%DB%8C%D8%A7%D8%B1%D8%AF-%D8%AF%D9%84%D8%A7%D8%B1%DB%8C-%D8%A7%DB%8C%D8%B1%D8%A7%D9%86-%D8%A7%D8%B2-%D8%B5%D8%A7%D8%AF%D8%B1%D8%A7%D8%AA-%D9%86%D9%81%D8%AA-%D8%A8%D9%87-%DA%86%DB%8C%D9%86" rel="noopener noreferrer" target="_blank">bought</a> about 30 billion dollars of Iranian oil annually, and Iran and China signed a 25-year comprehensive cooperation agreement in March 2021. According to this agreement, China is supposed to <a href="https://gjia.georgetown.edu/2023/06/02/chinas-increasing-role-in-the-middle-east-implications-for-regional-and-international-dynamics/" rel="noopener noreferrer" target="_blank">invest</a> 400 billion dollars in Iran, equivalent to 10 percent of the total budget of the BRI. In addition, this agreement includes the joint development of the Chabahar Port and a new oil terminal near Jask Port, south of the Strait of Hormuz. The port has traditionally been under a long-term contract with India, so this new development is exciting for both China and Iran.Despite US oil sanctions, China <a href="https://energy.economictimes.indiatimes.com/news/oil-and-gas/abundant-cheap-iranian-oil-supply-to-cap-russian-prices-in-china/103061643" rel="noopener noreferrer" target="_blank">imported</a> about 1.2 million barrels of oil per day from Iran in August 2023. Iran’s cheap oil is very important for "teapot" refineries, as smaller, independent refineries in China are called. These refineries <a href="https://ca.finance.yahoo.com/news/irans-oil-trade-china-reportedly-011421837.html#:~:text=Overall%2C%20Iranian%20crude%20now%20makes,of%20money%20in%20the%20process." rel="noopener noreferrer" target="_blank">get</a> 90 percent of their oil from Iran. In December 2022, Iran was <a href="https://www.iranintl.com/en/202212249285" rel="noopener noreferrer" target="_blank">selling</a> its oil at a 46 percent discount for $37 per barrel, while the market price of oil was around $79.25 per barrel.Iran is a member of the Shanghai Cooperation Organization and BRICS, so pressure on Tehran affects organizational diplomacy between China and Iran. The Russian ambassador to Iran <a href="https://www.irna.ir/news/85383192/%D8%B3%D9%81%DB%8C%D8%B1-%D8%B1%D9%88%D8%B3%DB%8C%D9%87-%D8%AF%D8%B1-%D8%AA%D9%87%D8%B1%D8%A7%D9%86-%D8%A7%DB%8C%D8%B1%D8%A7%D9%86-%D8%A8%D9%87-%D8%A7%D8%B5%D9%88%D9%84-%D8%A8%D8%B1%DB%8C%DA%A9%D8%B3-%D8%A8%D8%A7%D9%88%D8%B1-%D8%AF%D8%A7%D8%B1%D8%AF" rel="noopener noreferrer" target="_blank">announced</a> in a TV interview that Iran believes in the principles of BRICS. He probably was not wrong, since Tehran is deeply committed to the de-dollarization process. Iran is an unwavering ally in challenging the world order. Especially since Argentina has <a href="https://www.bbc.com/news/world-latin-america-67842992" rel="noopener noreferrer" target="_blank">refused</a> to join BRICS and Saudi Arabia has not yet officially <a href="https://www.reuters.com/world/saudi-arabia-has-not-yet-joined-brics-saudi-official-source-2024-02-01/" rel="noopener noreferrer" target="_blank">joined</a>, it would not be rational for China to alienate Tehran.On the other hand, China knows very well that it has lost some of its leverage over Iran. In the last three years, the volume of Chinese investment in Iran has decreased. China <a href="https://www.mei.edu/publications/obstacles-and-opportunities-closer-iranian-chinese-economic-cooperation" rel="noopener noreferrer" target="_blank">invested</a> $618 million USD in projects in Iran from 2018 to 2022, mainly in the construction sector. Meanwhile, China invested $22.5 billion in Saudi Arabia, $13 billion in Iraq, $4.6 billion in Kuwait, $1.8 billion in Qatar, $19.3 billion in the United Arab Emirates, and $2.5 billion in Oman. Even China’s investment in Bahrain was more than twice its investment in Iran.China is aware that putting pressure on Iran will have the opposite of the desired result. In the last few years, the Iranian people and non-governmental elites have been critical of their country’s adoption of the "<a href="https://www.ispionline.it/en/publication/iran-looking-east-shifting-balance-power-tehrans-foreign-policy-30863" rel="noopener noreferrer" target="_blank">Look to the East</a>" policy and the Iran-China agreement. Some are very <a href="https://www.iranintl.com/en/202201163943" rel="noopener noreferrer" target="_blank">pessimistic</a> about this agreement and believe that their officials essentially sold their country to China. Beijing’s involvement in disputes over three islands in the Strait of Hormuz, which are the subject of a four-decade dispute between Iran and the Gulf Cooperation Council, has also <a href="https://www.aljazeera.com/news/2022/12/11/iran-summons-china-envoy-over-disputed-islands-with" rel="noopener noreferrer" target="_blank">angered</a> Iranian critics.The Iranian government could reconsider its relations with China due to internal pressures and ties with other countries. For instance, in 2022, Russia <a href="https://iranprimer.usip.org/blog/2023/jun/28/iran-china-trade-lifeline" rel="noopener noreferrer" target="_blank">overto</a>ok China to become the largest investor in the Islamic Republic of Iran. Moscow invested $2.76 billion in Tehran during the Iranian fiscal year (from mid-March 2022 to mid-March 2023). China, in comparison, invested only $131 million in Iran the same year.Finally, China has historically been a marginal and extremely conservative actor. Beijing emphasizes neutrality and serves as a moral compass for Arab countries and the Global South in general. It will therefore devote all its energy in the current war to discrediting the US in the eyes of its Arab allies. For this reason, if China has to pressure Iran, it will try to use that as its key bargaining chip in further negotiations with Washington. However, China will refrain from pressuring Iran as long as it can and will enjoy watching the West and the US get stuck in this war.

Is China Trying to Alleviate Tensions between Iran and the West?