The American “maximum pressure” campaign has clearly had a major impact on Iran, but a massive influx of Chinese investments will go a long way towards undoing it.
With
Iran and China working on a multibillion-dollar 25-year economic and security
deal, Israel has many reasons to be concerned and even alarmed.
The
proposed agreement, leaked to The New York Times, which reported on it on
Saturday, would lead to a closer military relationship between Tehran and
Beijing, including joint military exercises, research and weapons development
and intelligence sharing. It would also increase Chinese investments in Iranian
banking, telecommunications and transportation, such as airports and railways.
China would reportedly get a discounted supply of Iranian oil in return.
The
document describes the countries as “two ancient Asian countries... with a
similar outlook” that “will consider one another strategic partners.”
Neither
side has publicly confirmed that the document is genuine, that they have signed
it or that there is any such agreement. When asked about a deal with Iran last
week, Chinese Foreign Ministry spokesman Zhao Lijian said: “China and Iran
enjoy traditional friendship, and the two sides have been in communication on
the development of bilateral relations. We stand ready to work with Iran to
steadily advance practical cooperation.”
Meanwhile,
there is public debate in Iran about whether the agreement could be a debt
trap, with former president Mahmoud Ahmadinejad speaking out against it. The
agreement has been in the works for a long time – Chinese leader Xi Jinping
first proposed it on a visit to Tehran in 2016 – and the timing for the recent
progress likely has to do with Iran being especially economically weak these
days.
According
to Carice Witte, executive director of SIGNAL, a think tank focused on
China-Israel relations: “This is indicative of the Chinese approach, [to]
identify where there is a vulnerability and then patiently look for ways to
capitalize on it.”
China
has much to gain from the deal besides a discount on gas when energy prices are
plummeting anyway. The agreement fits into China’s Belt and Road Initiative to
build infrastructure across the world, while bringing Iran into its orbit of
influence. It also would bolster China’s new digital currency e-RMB as a way to
bypass American systems and reduce the power of the dollar – another way in
which the deal could hurt Israel if it comes to fruition.
Plus,
China would gain power and influence in Iran, a diplomatic card it can play
with respect to the US and garner greater leverage in the Gulf.
For
Israel, the potential for damage from such an agreement is clear.
AS WITTE
said, “Any dollar going into the Iranian system is one that can likely be spent
against Israel.”
This is
especially clear when it comes to the bolstering of Iran’s military through
cooperation with China. Any of the new resources directed to the Islamic
Republic’s army can potentially – and likely will – be turned on Israel.
Another
part of the deal may be a massive sale of weapons to Iran. A recent Pentagon
report said China seeks to sell Iran attack helicopters, fighter jets, tanks
and more once the UN arms embargo expires in October.
While
Israelis and Israel supporters may find it hard to believe, the Chinese
government truly does not think Iran is a danger to Israel, Witte said.
“China’s
perception is that Iran doesn’t mean what it says about destroying Israel,” she
said. “China does not see Iran as an existential threat to Israel and that Iran
is only saying [it wants to destroy Israel] to be taken seriously by the
world’s power centers.”
Israel
and the US have been pushing UN Security Council members to extend the arms
embargo on Iran that began under the Joint Comprehensive Plan of Action
(JCPOA), the 2015 nuclear agreement between Iran and world powers. Israel and
the US have cited Tehran’s violations of that deal and continued attempts to build
up its nuclear program, for which the International Atomic Energy Agency has
repeatedly rapped Iran in recent weeks, as well as its sponsorship of terrorism
and warfare through proxies around the Middle East.
But
Chinese Ambassador to the UN Zhang Jun last week said his country opposes US
attempts to activate the JCPOA’s “snapback sanctions” mechanism.
The
return of US sanctions in 2018 has led to a major economic crisis in Iran and
subsequent political instability. This empowered hard-liners to say Iran never
should have made a deal involving the US in the first place. They won a
decisive majority of Iran’s parliament in an election this year.
But it
also has led to protesters taking to the streets this year, protesting a
government that uses its money to pay for wars in other countries instead of
helping its own people. Experts say the regime is as unpopular as it has ever
been since the Islamic Revolution.
The US
“maximum pressure” campaign has clearly had a major impact on Iran, but a
massive influx of Chinese investments will go a long way toward undoing it,
effectively relieving the pressure.
Another
concern is regarding Chinese companies’ involvement in infrastructure projects
in Israel and Iran. This is already taking place, but the 25-year agreement
would deepen those ties.
A
Jerusalem Post investigation last month found that three of the six
international groups bidding on the tender to build two lines of the Tel Aviv
light rail include Chinese-owned companies that also worked on railway projects
in Iran. These state-owned companies include China Railway Engineering
Corporation, China Harbour Engineering Company, China Communications
Construction Company and its China Railway Construction Corporation.
A report
by the RAND research institute this year warned that due to China’s close ties
with Iran, the Chinese government could have companies share insights on Israel
with Tehran to gain favor and influence. In addition, China could use the
companies operating in Israel and Iran for political leverage on Israel, such
as in 2013, when it conditioned a Beijing visit by Prime Minister Benjamin
Netanyahu on his stopping defense officials from testifying in a New York
federal lawsuit against the Bank of China for laundering Iranian money for
Hamas and Palestinian Islamic Jihad.
The US
is waiting to see what actual agreement emerges, and it will continue to take
action against any Chinese company breaking sanctions, a State Department
source said. For example, the US is pursuing criminal charges against Chinese
telecom company Huawei’s CFO Meng Wanzhou for attempting to avoid US sanctions
by hiding investments in Iran.
The
Prime Minister’s Office declined to comment on this matter, but it is likely
eyeing the China-Iran agreement with concern.