Neither China Nor Iran Will Get What They Want From Their Relationship

THE DIPLOMAT

Behind the smiles from Iranian and Chinese leaders in Beijing this week, there may well be frustration. Iranian President Ebrahim Raisi visited the Chinese capital with the hope of shoring up his country’s international support and extracting economic advantages from his country’s relationship with China. Meanwhile, Chinese President Xi Jinping wanted to use the visit to push for a resolution to the ongoing negotiations over Iran’s nuclear program. Unfortunately for both, neither are unlikely to get what they want.

For Raisi, it was important to show that Iran is not the international pariah that many in the West presume. Iran is also struggling economically; in addition to coping with the sanctions that were reimposed on the country after then-U.S. President Donald Trump withdrew the United States from the Joint Comprehensive Plan of Action (JCPOA), Iran’s economy has been sluggish, despite the apparent end of the pandemic. Inflation is high, at 40 percent, while GDP growth has been slowing, from 4.7 percent in 2021 to 3 percent in 2022 and a projected 2 percent this year, according to the IMF.

Raisi may have hoped that the visit to China would unlock more funds and investment. In 2021, the two countries signed a 25-year cooperation agreement. Although media reports suggested (with no reputable sourcing) that the investments involved would be substantial, worth up to $400 billion, there is little sign that is happening. In 2022, Chinese firms accounted for only $185 million, or 3 percent of total investments. Indeed, in recent years Russia has become a bigger investor in Iran than China. Instead, Raisi had to make do with Iran and China signing more agreements, around 20 in total, including on trade and tourism.

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