Strategic implications of China-Iran deal

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By Muhammad Omar Iftikhar

The 25-year strategic deal between China and Iran will be viewed with great interest by key South Asian countries especially Pakistan and India. This USD $400 billion deal will see China and Iran collaborate in telecommunications, banking, infrastructure, and sharing military intelligence. The China-Iran nexus will possibly have positive impacts on the China-Pakistan Economic Corridor (CPEC). While India will be witnessing the China-Iran deal with caution, the US and its incoming President and his administration will also diligently observe how this relationship flourishes. China is not using its military might to exercise its influence over the world. It is using economic ambitions to build commercial ties with the world’s leading countries having geopolitical and geostrategic importance. The CPEC, China-Iran deal, and the Belt and Road Initiative (BRI) are key examples in this regard.

With the China-Iran deal, the Chabahar Port in Iran will have a renewed importance. It is quite possible that the Chabahar Port and Pakistan’s Gwadar Port will not strive for a one-on-one competition but will work in collaboration. Pakistan-Iran ties may also be bolstered now that Iran has signed a strategic deal with China. It is expected that under the China-Iran deal, China will buy Iran’s oil at a cheap price to help it fuel its growing industries. On the other hand, Iran will receive monetary backing from China. While China and Iran deal will have major effects on China’s ties with the US and India, there is another player – Russia. Recently, Russia-China ties may have become a bit sour. This happened when Russia sold arms to India. Furthermore, reports suggest that India desires Russia to become a part of the US-led Indo-Pacific Initiative. This may be done to counter China’s increasing economic impact in the region and over the West. It is also likely that Iran may be included in the CPEC that will add stimulus to the project while expanding its geographical outlook.