Iran Looks East While Seeking Space For Nuclear Concessions
A phone call Friday between Iranian foreign minister Hossein Amir-Abdollahian and his Chinese counterpart Wang Yi emphasized shared views on Iran’s nuclear program, Tehran’s looming membership of the Shanghai Cooperation Organization, the supply of Chinese Covid-19 vaccines, and establishing a broad-based government in Afghanistan, the official news agency IRNA reported.
Along with Russia and Europe, China has called on both United States and Iran to accept the terms of Iran’s 2015 nuclear agreement with world powers, from which the US withdrew in 2018 while imposing ‘maximum pressure’ sanctions that sent the Iranian economy into two years of deep recession.
With Europe failing to counteract US sanctions, and European energy companies leaving Iranian contracts, Tehran ‘looked east’ in expanding cooperation with China especially.
Tehran’s expansion since 2019 of its nuclear program beyond the 2015 deal, in response to both US sanctions and attacks on its atomic sites widely blamed on Israel, has alarmed the deal’s European signatories France, Germany, and the United Kingdom.
But China and Russia, while concerned over Iran’s nuclear steps, have put them in the context of what Moscow last month called “the lack of specific practical results of efforts to restore the…'nuclear deal,' while the unilateral US sanctions against Iran and third countries…continue to be effective."
Raisi gaining space
In an analysis published Friday, Bloomberg cited diplomats and analysts sensing that Raisi’s new government believed it was gaining “space…to expand the list of concessions” it wants from the US to return to the 2015 agreement, the JCPOA (Joint Comprehensive Plan of Action).
“Three years after former President Donald Trump imposed his ‘maximum pressure’ policy,” Bloomberg noted, “Iran has enriched uranium close to weapons grade while its economy is showing some signs of stabilizing with the help of Beijing and Moscow, even as crucial oil exports remain heavily sanctioned.”
It is not clear what Bloomberg meant by Russian help, since Moscow has not provided Iran any financial assistance or trade concessions in the past three years. Bilateral trade between the two countries was around a very modest $2 billion sum in 2019. China has been more cooperative, buying Iranian oil but has not made any investments.
The IMF projects Iran’s economic growth at 2.5 percent for 2021, following 1.5 percent in 2020, after sharp contraction in 2018 and 2019. But so far this year, signs have shown a worsening economic situation with the rial losing more value, inflation specially in food prices reaching triple-digit numbers as well as labor and social unrest.
Talks in Vienna since April on reviving the JCPOA, between Iran and the deal’s remaining signatories and indirectly the US, were suspended for Iran’s June presidential election and the transition in Tehran. With no date set for the talks’ resumption, informal contacts are expected on the side-lines of the general conference later this month of the International Atomic Energy Agency (IAEA), which monitors Iran’s nuclear program.
Iran’s main market
As IRNA’s account of the Amir-Abdollahian-Wang phone call noted, cooperation with China is crucial for Iran. With other Asian buyers ending purchases of Iranian oil and freezing billions of Iran’s funds in the face of US ‘maximum pressure,’ China buys the vast bulk of Tehran’s crude exports. China is easily Iran’s main market, taking around 30 percent of all exports.
Tehran in March signed a 25-year strategic cooperation agreement with China, which Bejing sees as part of the Belt and Road initiative, its $4-trillion infrastructure plan it plans to reach 60 percent of global population.
Iran has since 2005 been an observer at the Shanghai Cooperation Organization, which has expanded trade and investment, and issued bonds in their own currencies, helping reduce use of the dollar in Russia-China trade from 90 percent in 2015 to 46 percent.
In shorter-term cooperation, Iran has received 20 million doses of the Chinese Covid vaccine Sinopharm, the Iranian media has reported, with John Hopkins university giving a figure of 27 million doses administered in total and 10 percent of Iranians fully vaccinated. But Supreme Leader Ali Khamenei has indirectly blamed Chinese companies for reneging on their promises and underdelivering vaccines. This was an attempt on his part to deflect growing public outrage at the high rate of infections and deaths since early July.
New Afghan government
Over Afghanistan, China and Russia both share Iran’s perception that the Taliban should be coaxed into accepting an inclusive government in Kabul. Despite the Taliban recently calling China “a trustworthy friend,” Beijing is not ready to recognize Afghanistan’s new rulers.
Wang recently told US secretary of state Antony Blinken that the world should “positively guide” the Taliban in the wake of the US military withdrawal. Wang said the US should “concrete action to help Afghanistan fight terrorism and stop violence, rather than playing double standards or fighting terrorism selectively.”