China-Iran: Bad news, but it could be worse for Israel - analysis

China would also receive a major discount on Iranian oil and become a near monopsony, as long as sanctions on Iran remain.

Iranian President Hassan Rouhani meets with Chinese Foreign Minister Wang Yi, in Tehran, Iran March 27, 2021. (photo credit: REUTERS)
Iranian President Hassan Rouhani meets with Chinese Foreign Minister Wang Yi, in Tehran, Iran March 27, 2021.
(photo credit: REUTERS)
When the details of a multibillion dollar, 25-year economic and security agreement between Iran and China leaked last summer, the headline in The Jerusalem Post was: “Proposed China-Iran deal is bad news for Israel.”
Now that Iranian Foreign Minister Javad Zarif and his Chinese counterpart Wang Yi signed an agreement in Tehran on Saturday, it still means nothing good as far as Israel is concerned.
What’s more important than the content of the agreement at this point is the message being sent in the timing – and that message is that Beijing and Tehran are thumbing their noses at the US.
As Carice Witte, executive director of SIGNAL, a think tank dealing with China-Israel relations, said on Monday, “this is 100% a statement to the US.”
As Dr. Shira Efron, special adviser with the RAND Corporation, explained, the way this agreement is being rolled out has much more to do with “Chinese calculations is-a-vis the US than their actual dependence and keen interest in Iran, per se.”
China had previously been more hesitant in its relations with Iran, in light of US sensitivities, but recent events led Beijing to throw caution to the wind.
Last week, the US, UK, EU and Canada sanctioned senior Chinese officials involved in the major human rights abuses against Uighur Muslims in Xinjiang, including mass internment, forced sterilization and more. That came days after Wang’s verbal sparring with US Secretary of State Antony Blinken in Alaska earlier this month. China responded to Western moves by sanctioning religious freedom advocates.
Beijing sees this as another way of standing up to the US, Witte explained.
Wang rapped the US for its policies toward his country and Iran in a statement from his meeting with Iranian President Hassan Rouhani on Saturday: “The US should reflect on the damage to regional peace and international stability caused by the withdrawal [from the 2015 nuclear deal between world powers and Iran], reflect on the losses it has caused to relevant countries, remove unilateral sanctions on Iran as soon as possible, and abolish long-arm jurisdictional measures against China.”
Israel is a very small part of the great powers competition between the US and China, which is now playing out in Iran, but Witte said Beijing is aware that Jerusalem will probably be making worried calls to Washington over this agreement.
Witte cited past conversations with Chinese scholars who said that their country’s leadership “had figured out some years prior that just as the US can use Taiwan to pressure China, China can use Israel to pressure the US.”
That could mean that Israel's careful position in the US-China jostling could be at risk. At the moment, the US is Israel's greatest strategic ally and the countries share values and interests, which means that Jerusalem remains much closer to Washington than Beijing. At the same time, Israel has a robust economic relationship and a partnership in innovation with China.
We've already seen the Trump administration pressure Israel to distance itself from China, with Jerusalem struggling to extricate itself from infrastructure deals with Beijing. Though the Biden administration has not yet had the bandwidth to pressure Israel in those areas - or perhaps is waiting for there to be a non-transitional government in Jerusalem - Israel can very easily find itself caught in the middle again.
If it has to, Israel will choose the US over China, but it may be hit hard by having to make that choice.

IRAN REMAINS under the “maximum pressure” sanctions implemented by the Trump administration since 2018, as US President Joe Biden seeks to return to the JCPOA, as the 2015 Iran nuclear deal is known. The Biden administration said it will only rejoin the JCPOA if Iran returns to compliance with it, and has thus far held the line in the face of Iranian defiance.
Rouhani stayed on-message, repeating what he and other Iranian officials have been saying for weeks: that they will not return to the JCPOA unless the US removes sanctions first.
“There should be no prerequisites for the US to resume implementation of the agreement and should take action first,” Rouhani said.
Efron argued that “Iran and China are demonstrating their leverage and impatience” in response to the Biden administration continuing to keep Trump-era sanctions on Iran intact.
When it comes to Iran sanctions – which as far as Israel is concerned is the US’ main source of leverage that can bring about concessions from Tehran – the message of this agreement is that China views them as soon-to-be irrelevant.
Yes, China has thus far exercised caution – for example, it has not sold arms to Iran since the UN embargo was lifted last October – but they apparently think the sanctions are on their way out.
Still, Witte said, that when it comes to Israel’s concerns about Iran, she is certain that China does not want Iran to become a nuclear power.
Any China-Iran deal bolsters Iran and weakens the US position in its planned negotiations on the nuclear agreement, which is bad news for Israel.

BUT in terms of the deal’s apparent content, it could be worse.
The Chinese Foreign Ministry also made clear in its message from the Wang-Rouhani meeting that it believes US unilateral sanctions violate international law and are even immoral.
Neither China nor Iran has released details of the agreement, simply stating that it is a “comprehensive strategic partnership”; that the sides seek to “deepen mutually beneficial cooperation in various fields”; and that Iran would like China’s help in tackling the coronavirus pandemic. One of the few details in the Chinese Foreign Ministry’s statement on the agreement is that the countries will “advance anti-terrorism cooperation.”
The version of the agreement leaked to The New York Times in July called for greater military cooperation between the countries, including weapons sales, intelligence sharing, and joint exercises, training and research. This is the part of greatest concern for Israel.
Witte posited, however, that the document published last year “put too much responsibility on China for any wayward activities that Iran might participate in,” and as such, those sections were likely to have been amended.
The leaked agreement also involved $400 billion of Chinese investments in Iran in a broad range of fields, including ports and railways, areas in which China also has a foothold in Israel. There is some concern over Chinese companies operating in both Israel and Iran being a security risk.
China would also receive a major discount on Iranian oil and become a near monopoly, as long as sanctions on Iran remain.

IT IS unclear, however, how much of this deal will actually be implemented. In fact, Reza Zabib, head of the East Asia department in Iran’s Foreign Ministry, said that the reason the details of the agreement weren’t published is that it is non-binding.
“Historically, China signs these [memoranda of understanding] and many times only a small percentage of the money actually comes to be invested,” Witte explained.
Efron said Israel can take comfort in that China takes a more “holistic regional approach to the Middle East, and so it has similar deal frameworks with both Saudi Arabia and the UAE, Iran’s adversaries.” In fact, Wang visited Riyadh and met with Saudi Crown Prince Mohammed bin Salman right before heading to Tehran. Moreover, Beijing sells more weapons to Iran’s rivals in the region than it does to Iran.
In addition, China and Israel do not have a defense relationship due to past US interventions, but the countries do have a strong economic partnership, including a free trade agreement.
All of this taken together indicates that China is not trying to take Iran’s side in the region, even if Beijing seems to be favoring Tehran more than before.