Iran’s President Raisi paid a high-profile visit to China and was officially welcomed by his Chinese counterpart Xi Jinping on February 14. The Iranian president is making his first state visit to China in 20 years. High-ranking delegations from Tehran and Beijing inked 20 agreements during a three-day visit to further their collaboration in various infrastructural, economic, and security areas.

China has been Iran’s top trading partner and the largest oil importer in recent years, with a total trade volume of more than US$25 billion, despite US efforts to harm Iran’s economy.

The strategic 25-year pact, which was signed in 2021 but hasn’t lived up to Iran’s economic aspirations, seems to be the major item on President Raisi’s agenda, in addition to the freshly signed contracts. In their discussion with Xi, Raisi clarified that strengthening bilateral ties and preserving regional stability depends on China and Iran implementing their 25-year strategic partnership. President Xi, for his part, emphasized the importance of putting into effect the strategic agreement between the two nations, stressing that his nation vehemently opposes foreign forces meddling in Iranian internal issues as well as the damaging actions done by Western nations. China has been Iran’s top trading partner and the largest oil importer in recent years, with a total trade volume of more than US$25 billion, despite US efforts to harm Iran’s economy. However, any optimistic view of the collaboration between Iran and China is still constrained by several obstacles and unknowns.

Although China is crucial in breaching Iran’s sanctions, it is nearly impossible to fulfill the big economic projects of the 25-year accord with China without the renewal of the JCPOA—commonly known as the Iran nuclear deal. China may assist in breaking through this deadlock and creating space for lifting sanctions by participating more actively in the JCPOA renewal talks. The South China Morning Post reports that the Raisi-Xi meetings focus heavily on the Iran nuclear accord. In this context, Chinese President Xi Jinping assured his Iranian counterpart that China would keep contributing positively to the talks to resurrect the nuclear agreement.

China is crucial in breaching Iran’s sanctions; it is nearly impossible to fulfill the big economic projects of the 25-year accord with China without the renewal of the JCPOA—commonly known as the Iran nuclear deal.

However, reviving the nuclear accord is not China’s strategic decision to side with Iran against the West; rather, this decision is more driven by China’s growing anxiety over an Iranian nuclear capability. China is concerned about Iran’s nuclear development and fears that Japan and South Korea may become nuclear. Furthermore, China believes the JCPOA problem is more of a conflict between Iran and the West. China’s stance on the Iran nuclear deal is largely motivated by the potential financial gains from reviving the JCPOA, including the ability to undertake significant trade and energy agreements with Iran. As a result, if the JCPOA is not renewed, the escalating hostility in the Persian Gulf between Iran and its Arab adversaries might harm China’s economic and energy interests. The Persian Gulf area meets about 30% of China’s energy requirements.

As long as Iran does not attain nuclear threshold status, the “no war, no peace” hypothesis seems to have been the Chinese government’s desired outcome in the Iran-US impasse. A sanctioned Iran with constrained nuclear programs has brought China enormous economic gains over the last several years. Unverified information about the 25-year strategic cooperation pact between Iran and China claims that Beijing purchases Iranian oil and gas at a 30 percent discount with a two-year repayment deadline. Another reason is that China may use the Chinese Yuan to pay off its oil debt. Two-thirds of the price of oil and gas will be paid in cash, and one-third in the form of products and services or exchange of oil for commodities, which is another economic concession made to China. China will undoubtedly lose these benefits if the JCPOA is restored.

China’s stance on the Iran nuclear deal is largely motivated by the potential financial gains from reviving the JCPOA, including the ability to undertake significant trade and energy agreements with Iran. As a result, if the JCPOA is not renewed, the escalating hostility in the Persian Gulf between Iran and its Arab adversaries might harm China’s economic and energy interests.

Since assuming office, the Raisi government has prioritized Iran’s strategy of “Pivot to East,” promising to strengthen Iran’s relations with Asian nations, China, and Russia, especially as its friction with the West increased. However, this strategy lost its effectiveness and credibility in Iran’s foreign policy when China joined the GCC in its campaign against Iran during Xi’s recent visit to Riyadh. However, by choosing Arab monarchies in the Persian Gulf over Iran, China has made it clear to Iran’s leadership that it does not share this viewpoint. In contrast to Tehran’s expectations, Beijing is not seeking just strategic friends in the Middle East to help them counterbalance the US. China has always hesitated to contest US dominance in the area, instead choosing to stand against any destabilizers to maintain oil supplies.

As a result, China has already revealed with its Iranian and Arab counterparts a detailed proposal to start a security arrangement in the Middle East. At least in the official domain, it seems that the Chinese government has not established the proper justification for adopting this strategy and has not made any conspicuous efforts to do so. It seems that the Chinese will have the opportunity to negotiate with the Iranian official about the requirements of their security measures for Raisi’s visit to Beijing.

Iranian participation in China’s security arrangement would pave the way for further economic cooperation between Tehran and Beijing.

China’s interests would be gravely endangered if a regional conflict occurred due to the rise in tension between Iran and its competitors in the area, according to the Chinese. De-escalation is thus one of China’s top interests in the area, so it seems to sense that they would embrace the chance to persuade the Iranian president to take Beijing’s security strategy seriously. Iranian participation in China’s security arrangement would pave the way for further economic cooperation between Tehran and Beijing. Otherwise, it is improbable that Raisi’s trip to Beijing will result in a noteworthy economic accomplishment.

In order to circumvent US-led economic sanctions and escape from international isolation, Iran’s Raisi needs China’s cooperation, which may compel him to follow Chinese directives in terms of his foreign policy, particularly with regard to the nuclear negotiations and events in the Persian Gulf.

The Asian order is waiting for a new strategic birth for Iran, a process that has speed up over the last ten years but is still fraught with many unknowns. Iran struggles to develop a workable grand strategy to decide its alliance with the rising new Asian order and strengthen bilateral ties with China. Contrary to many of its neighbors, Iran does not yet have a clear strategic vision for shaping its alliance with the rising Asian countries. This has much to do with the Islamic Republic’s forty-year failure to implement a workable “neighborhood strategy” and “pivot to the east” independent of a longstanding anti-Western foreign policy. China has not yet shown a significant affinity for Iranian Anti-Western sentiment, despite the impression it has given Iranian officials.

Raisi’s trip to China comes at a time when Iran’s nuclear negotiations are still at a stalemate, drone sales to Russia during the Ukraine War are facing more international condemnation, and internal economic unhappiness is worsening, leaving Iran with less viable strategic options. In these conditions, China may profit from several levers to compel Tehran to conform to its wishes

The theoretical strategic worth of the Iran-China alliance has increased, but in reality, they are still in a rut. Iranian authorities tend to be cautious when describing their collaboration with China, given the evolving Chinese stance in the Persian Gulf and the absence of any effective leverage to modify its regional actions. Raisi’s trip to China comes at a time when Iran’s nuclear negotiations are still at a stalemate, drone sales to Russia during the Ukraine War are facing more international condemnation, and internal economic unhappiness is worsening, leaving Iran with less viable strategic options. In these conditions, China may profit from several levers to compel Tehran to conform to its wishes. In order to circumvent US-led economic sanctions and escape from international isolation, Iran’s Raisi needs China’s cooperation, which may compel him to follow Chinese directives in terms of his foreign policy, particularly with regard to the nuclear negotiations and events in the Persian Gulf. Putting all of one’s foreign affairs eggs in one basket would make Tehran more dependent on Beijing, despite growing domestic opposition.