IRAN AND CHINA: EASTERN BLOC ON THE RISE
Commentary No : 2016 / 8
28.01.2016
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Özge Nur ÖĞÜTCÜ

Analyst, AVİM

Iran and China are two significant actors getting more and more active in the Eurasian region. On the bilateral level Iran and China are further developing their relations. Following the decision of the United Nations on lifting the sanctions on Iran, full membership to the Shanghai Cooperation Organization[1] (SCO) is again on the table. For the first time, one of the SCO observer countries Iran openly stated its interest to become SCO full member at President Rouhani’s visit to Kyrgyzstan in September 2015. He said“The permanent membership of Iran at the SCO would serve the benefits of the two sides,”adding that Iran is ready to join SCO.[2] Actually Iran’s wish to gain a full-member status in SCO goes a long way back. Iran has started membership activities in 2005 together with India and Pakistan[3] and applied for full membership in 2008.[4] According to the rules of the SCO, any country under UN Sanctions could not be a SCO full member.[5] Since now it is not the case for Iran anymore, the main obstacle towards starting the process has thus been overcome. In December 2015, SCO Secretary General Dmitry Mezentsev told the Russian Izvestia newspaper that “The conditions under which the country under the UN Security Council sanctions cannot obtain the status of a full member have been prescribed at the first stage of the SCO formation. The organization wishes success to Iran in the completion of work on Iran's nuclear program to implement as expeditiously as possible the necessary legal procedures for the sanctions’ lifting. I believe that after this, the organization will immediately return to Iran's application for a full member status”[6] Also an expert focusing on East Asian politics from De La Salle University in Manila Professor Richard Heydarian told Radio Sputnik that "The plan for Iran to become a full-fledged member and no longer just an observer in the SCO will be really pushed forward. As far as I'm concerned both China and Russia are on board for Iran to be part of the organization,"[7] giving an idea about the positive environment about Iran’s status after Chinese President Xi Jinping visited Iran.

Iran’s membership to SCO will certainly have an effect on the regional policies of the organization and of China’s regional works on promoting regional cooperation on the bilateral level. For the Silk Road project recently initiated by China, Iran with its historical, economic, strategic and geographical ties carries importance for China. Iran’s geographical location stands as a natural connector between Asian and European countries via Turkey. “With Iran at the end of the Asian road before it heads into Turkey and Europe, China is likely targeting to build numerous infrastructure facilities in Iran” said Jean-Francois Seznec, a non-resident senior fellow at the Atlantic Council.[8] Additionally, Iran’s soft power[9] deriving from its culture and historical heritage are among the main pillars of Iran’s power in the region today.

Economically, after UN lifting sanctions, Iran has a great potential as it has the world's second-largest natural gas reserve, fourth-largest crude oil reserve and The Strait of Hormuz is an important oil-export route from Iran and other Persian Gulf countries.[10] Also, Iran is among the countries with largest economy in the Middle East and North Africa region in terms of GDP, which were about US$549 billion in 2012[11] and $425.3 billion in 2014.[12]  Most probably because of the sanctions, Iran’s economic growth is estimated around -2% in 2013 by Statistical Centre of Iran.[13] But in the new era, we can expect these figures to change very drastically.                                                                    

Therefore, Iran might have an important added-value to SCO’s role and works. As China and other SCO members are in need of new energy resources and partners to cooperate, Iran can offer a great deal to the other member countries. Supporting this expectation, Iranian Deputy Foreign Minister Ebrahim Rahimpour told to Sputnik news agency that the SCO “will become stronger as an international institution if the organization accepts new members”. He added that Iran “want the SCO region to be strong and independent.”[14] Also explaining Iran’s motivation behind the SCO membership, Iranian Foreign Ministry spokesman Hossein Jaber Ansari said in a press conference on Monday that "The lifting of sanctions opens for Iran the opportunity to become a member of the Shanghai Cooperation Organisation and eliminates other limitations, which the Islamic Republic has been facing in the regional foreign policy"[15]underlining the abovementioned potential of the country. Iran's ambassador to Moscow, Mehdi Sanai, stated in an interview with a Russian newspaper in 2015 that "The conception of the SCO corresponds with Iran's point of view on the issues of the regional and world order. Iran in its foreign policy is governed by two fundamental principles” he added "Firstly, Iran doesn't accept the idea of a unipolar world. Secondly, Iran is against any interference by outside powers in the affairs of the region. Regional problems should be dealt with by countries of the corresponding region. The essence and structure of the SCO fully correspond to these principles"[16] giving an idea about a “possible” existence of a shared mind-set among the SCO member countries.

During Chinese President Xi Jinping’s visit to Iran, besides the talks on Iran’s membership application to SCO, bilateral relations between China and Iran were on the table. Hence, this visit should be seen as a step towards a new era for the regional formations. Both countries agreed to increase bilateral trade which is expected to be around $600 billion in 10 years and 17 cooperation agreements were also signed particularly on energy, trade, and industry, and so on reported Iran's Islamic Republic News Agency.[17] But the overall topics of the meetings were not limited to only those areas.[18]

Last but not least, close relations between Iran and China are not limited to SCO and bilateral levels. For instance, Iran has joinedthe China-led Asian Infrastructure Investment Bank (AIIB)[19]as one of the founding members in April 2015.[20] China-led institution (to be fully established) has 57 “prospective founding members” in total at the moment.[21] This strengthens Iran’s role and builds on involvement of Iran in “One Belt, One Road” – The New Silk Road initiative taken by China. Following this motivation, news reports that the development of the Silk Road and constructing a Silk Road in the sea were also some of the topics that were included in the 17 agreements signed between two parties.[22]

The Eastern-bloc, namely Russia and Iran, stated that they are against the unipolar world system which dominates the global policies – according to Iranian and Russian officials.[23] Iran’s Supreme Leader Ayatollah Ali Khamenei stated that - Iran has “never trusted the West” and wanted to increase ties with “more independent countries” – like China.[24]As we see Iran’s aspiration in being more active not only in regional but also in the global level in the post-Nuclear deal era, conflicts of interests might also occur since Iran is seeking new energy markets to actualize its potential.  China and Iran are developing closer relations because of their similar visions towards the potential and the future of the region. Also, with the new projects and increasing demand for energy, transportation routes and so on, China needs more partners and suppliers.

*Photo: http://media.president.ir/

[1] Shanghai Cooperation Organization is established in 1996 as “Shanghai Five” and adopted its current structure in 2001. Turkey is one of the Dialogue-Partners. For more info:http://www.sectsco.org/EN123/

[2] Iran-Daily, “Iran’s Ready for SCO Full Membership: President Rouhani”, 05.09.2015, Access: 25.01.2016, http://www.iran-daily.com/News/126202.html?catid=3&title=Iran-s-ready-for-SCO-full-membership--President-Rouhani

[3] Richard Weitz, “Iran and the SCO: New Opportunities, New Challenges”, 18.08.2015, Access: 25.01.2016,http://www.hudson.org/research/11539-iran-and-the-sco-new-opportunities-new-challenges

[4] Sputniknews, “China, Russia to Actively ‘Push Forward’ Iran’s SCO Membership”, 24.01.2016, Access: 25.01.2016,http://sputniknews.com/politics/20160124/1033641888/china-russia-iran-sco-membership.html

[5] Richard Weitz, “Iran and the SCO: New Opportunities, New Challenges”, 18.08.2015, Access: 25.01.2016,http://www.hudson.org/research/11539-iran-and-the-sco-new-opportunities-new-challenges

[6] [6] Irna.ir, “SCO to consider Iran’s membership bid after lifting of UN sanctions”, 29.12.2015, Access: 25.01.2016,http://www.irna.ir/en/News/81898792/

[7]Sputniknews, “China, Russia to Actively ‘Push Forward’ Iran’s SCO Membership”, 24.01.2016, Access: 25.01.2016,http://sputniknews.com/politics/20160124/1033641888/china-russia-iran-sco-membership.html

[8] Huileng Tan, “China tilts to Iran as Xi caps visit with 17 accords”, 25.01.2016, Access: 25.01.2016,http://www.cnbc.com/2016/01/25/china-tilts-to-iran-as-xi-caps-visit-with-17-accords.html

[9] Soft Power shot definitation, Foreign Affairs,by Joseph S. Nye, Jr. Reviewed by G. John Ikenberry: Coined by Nye in the late 1980s, the term "soft power" -- the ability of a country to persuade others to do what it wants without force or coercion -- is now widely invoked in foreign policy debates. For more:https://www.foreignaffairs.com/reviews/capsule-review/2004-05-01/soft-power-means-success-world-politics

[10] US Energy Information Administration, Iran Country Report, 19.06.2015, Access: 25.01.2016,https://www.eia.gov/beta/international/analysis_includes/countries_long/Iran/iran.pdf

[11] Gas Exporting Countries Forum (GECF), Iran, Access: 25.01.2016,http://www.gecf.org/countries/iran

[12] World Bank database, Access: 25.01.2016,http://data.worldbank.org/country/iran-islamic-republic

[13] Statistical Centre of Iran, Main Indicators, Access: 25.01.2016,http://www.amar.org.ir/english/Main-Indicators

[14] Patrick Goodenough, “Nuke Deal Could Result in Iran Joining Eurasian Security Bloc Led by Russia and China”, CNSNews, 05.06.2015, Access: 25.01.2016,http://www.cnsnews.com/news/article/patrick-goodenough/nuke-deal-could-result-iran-joining-eurasian-security-bloc-led

[15] Eurasianet.org, “With Sanctions Lifted, Iran Ready For SCO”, 18.01.2016, Access: 25.01.2016,http://www.eurasianet.org/node/76871

[16] ibid

[17] Huileng Tan, “China tilts to Iran as Xi caps visit with 17 accords”, 25.01.2016, Access: 25.01.2016,http://www.cnbc.com/2016/01/25/china-tilts-to-iran-as-xi-caps-visit-with-17-accords.html

[18] For the detailed information, please see: “Joint statement between China and Iran on the Comprehensive Strategic Partnership (Full Text)”, 23.01.2016, Access: 26.01.2016,http://www.chinadaily.com.cn/world/2016xivisitmiddleeast/2016-01/23/content_23216249_4.htm

[19] For further info: Ali Murat Taşkent, “Turkey Became The 11th Largest Partner Of The New Asıan Infrastructure Investment Bank”, AVİM, 22.01.2016, Access: 26.01.2016,http://www.avim.org.tr/analiz/en/TURKEY-BECAME-THE-11th-LARGEST-PARTNER-OF-THE-NEW-ASIAN-INFRASTRUCTURE-INVESTMENT-BANK---Ali-Murat-TASKENT/4331

[20] Reuters, “China says Iran joins AIIB as founder member”, Access: 26.01.2016,http://www.reuters.com/article/us-asia-aiib-iran-idUSKBN0MZ08720150408

[21] Asian Infrastructure Investment Bank, Access: 26.01.2016, Members:http://www.aiib.org/html/pagemembers/

[22] IRNA, “Iran, China sign 17 cooperation agreements”, 23.01.2016, Access: 26.012016,http://www.irna.ir/en/News/81931797/

[23] Eurasianet.org, “With Sanctions Lifted, Iran Ready For SCO”, 18.01.2016, Access: 25.01.2016,http://www.eurasianet.org/node/76871

[24] Shannon Tiezzi, “China's Balancing Act in Iran”, The Diplomat, 26.01.2016, Access: 26.01.2016,http://thediplomat.com/2016/01/chinas-balancing-act-in-iran/


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