The Asian geo-strategic space is witnessing China’s growing proximity to the Islamic Republic of Iran, both in the political and economic realm. The string of official bilateral visits taking place between Beijing and Tehran in the recent past indicates the formation of a unique axis between the two nations. This axis is mutually beneficial with China eyeing Iran for all its ‘energy needs’ and Iran, in turn, using that ‘energy card’ to garner crucial Chinese support vis-à-vis its controversial nuclear pursuit.

China’s official press agency, Xinhua News has reported that Senior Chinese legislator and Vice-Chairperson of China’s Standing Committee of the National People’s Congress (NPC), Chen Zhili, visited Tehran in April 2011 and met with Iranian President, Mahmoud Ahmadinejad. The meeting is also being viewed in the backdrop of 2011 being the 40th year since establishment of diplomatic relations between China and Iran. Chen stated, “China is willing to seize this opportunity to further consolidate political mutual trust, enhance cooperation between the two sides’ legislative bodies, enrich connotation of bilateral ties and promote Sino-Iran relations to a new high.”

An earlier meeting between Li Changchun, member of the Standing Committee of the Political Bureau of the Central Committee of the Chinese Communist Party (CCP) in September 2010, in Teheran with the Speaker of the Iranian Majlis (parliament), Ali Larijani underscored the Sino-Iranian relationship when he stated during a meeting, “Iran welcomes China to continue its good momentum in overall development, and hopes to deepen mutually beneficial cooperation and open a new stage in bilateral relations.”

A significant announcement made recently regarding an extensive railway network stretching through Iran provides further insight into growing Chinese investments in Tehran. As reported by Iran’s Payvand News, the Iranian Construction and Development of Transportation Infrastructures Company stated in February 2011 that a railroad network extending 5,300 kms (3,293 miles) consisting of eight rail lines shall be constructed in collaboration with China. The deal, signed at 130 trillion rial (around $13 billion) includes: the Tehran-Mashhad line (over 900 kms), the Tehran-Qom-Esfahan line (410 kms), the Qazvin-Rasht-Anzali-Astara line (more than 370 kms), the Arak-Kermanshah-Khosravi line (569 kms), the Chabahar-Zahedan-Mashhad line (1,340 kms), the Gorgan-Bojnourd-Mashhad line (646 kms), the Tehran-Hamedan-Sanandaj line (408 kms), and the Sari-Rasht line (366 kms).

Chinese Premier Wen Jiabao has always stressed upon a desire to maintain high-level exchanges with Iran. Deep-rooted cooperation in trade and energy has resulted in direct bilateral trade touching $30 billion, according to Chairman of the Sino-Iranian Chamber of Commerce, Asadollah Asgaroladi. Additionally, China conducts $7 billion in terms of indirect trade with Iran annually through the United Arab Emirates.

The investment made by China in the expansion of Iranian rail network is an indicator of Chinese inroads in various sectors of the Iranian economy. Of these, ties in the energy segment have become a focal point of China’s relations with Iran. Tehran is Beijing’s third largest supplier of crude oil, providing it with roughly 12 per cent of its total annual oil consumption – nearly one million barrels per day. Earlier the China National Petroleum Corp (CNPC) signed a contract with National Iranian Oil Company (NIOC) for the development of Iran’s South Azadegan oilfield. The Chinese company is expected to buy a 70 per cent share of the whole project, slated to produce 260,000 barrels of crude oil per day with development cost totalling $2.5 billion. Significantly, this field that runs along the Iraqi border holds reserves estimated at approximately 42 billion barrels of oil – labelled as the world’s largest find in the past three decades. It should also be recalled that back in 2008, the CNPC signed a $1.76 billion deal with the NIOC to tap Iran’s North Azadegan oil field, which according to estimates will produce 75,000 barrels of oil a day by 2012.

In total, China has signed an estimated $120 billion worth of oil deals with Iran in the last five years to meet the requirements of its rapid growth pathway. The energy and trade links between Beijing and Tehran constitute the core of the relationship, impacting upon the wider geopolitical elements including the Chinese stance on Iran’s nuclear programme. Beijing seeks to secure global energy partners to fulfill its ever-growing demand for energy and Iran commands a very strong position in that regard.

While issuing a statement in March 2011, China expressed hope that the International Atomic Energy Agency (IAEA) would continue to take an objective and impartial position on the Iranian nuclear issue. According to Deputy Head of the Department of Arms Control of China’s Foreign Ministry, Li Song, “China hopes that the agency will adopt an objective and impartial stance on the nuclear issue in Iran ….  It is our hope that Iran will fully implement the relevant resolutions of the IAEA Board and the UN Security Council and strengthen its cooperation with the agency…” However, IAEA Director General, Yukiya Amano in his recent testimony has been unable to confirm that all nuclear material in Iran was meant strictly for peaceful civilian purposes – thus ensuring that the controversy revolving around Iranian nuclear pursuit is likely to continue unabated.

China’s ever-growing appetite for energy sources to suffice its growth requirements is well-established and this in turn is likely to impact upon its stance on Tehran’s nuclear issue. Given the heavy Chinese investments injected into Iran, Beijing resists implementation of any proposal that in turn would prove detrimental to its energy and economic ties with Iran. These are primary drivers nudging Beijing to press for diplomacy over stringent sanctions against Iran and the political leadership within China seems fully aware of this reality – thus highlighting the importance of the evident political give and take.

Dr Monika Chansoria is a Senior Fellow at the Centre for Land Warfare Studies (CLAWS)

(The views expressed in the article are that of the author and do not represent the views of the editorial committee or the centre for land warfare studies).