Iran: Growing Dependent on China

15 January 2013, 16:22

U.W.: Mr. Heydarian, in one of your articles you wrote: "During the 1979 Iranian revolution, the main battle cry of millions of protesters against the Pahlavi regime was a fiercely nationalistic chant, "Neither East nor West; only the Islamic Republic". That is a strong and unequivocal statement of self-determination and national independence, capturing one of the founding principles of the Islamic Republic of Iran (IRI)". Does the rapprochement we see today between Iran with China infringe on these principles? Has this increasing trend in Iranian foreign policy, the so-called "look East policy", further accelerated in the past decade? Cognizant of the country's growing dependence on China, are pragmatists and nationalists in Iran beginning to realize the downside of their feisty relations with the West?

The mainstream media has often portrayed the Iranian revolution as a fundamentalist uprising against a Western-friendly secular monarchy. What this single-dimensional narrative misses is the fiercely nationalistic undertones of the 1979 revolution, which was primarily about regaining the country’s independence and dignity. It was a genuine democratic, popular uprising against a corrupt, unaccountable autocratic system, perceived as servile and subservient to the interests of external powers, especially the US. After all, the revolution called for the establishment of an Islamic ‘republic’, with the revolutionary constitution guaranteeing civil liberties, individual rights, and universal suffrage for the election of top executive and legislative leaders.

Contrary to what critics claim, the Iranian revolution was not a rejection of modernization per se, but instead a more nuanced opposition to foreign interference (whether from Western powers or Eastern powers) in the affairs of the country.

UW: Was this the first phase of a “clash of civilizations” between the West and Islam?

It was not the first phase of a ‘clash of civilizations’ between Islam and the West, but rather a trans-ideological clash – since the communists, socialists, and liberals also played a critical revolutionary role together with the Islamists. It was a rejection of ‘westoxification’ (Gharbzadegi): an uncritical absorption/piracy of all features of Western societies, including its social maladies, anomie, and hyper-materialism.  In this sense, the Iranian revolution – prefacing the emergence of the current regime – was a nationalistic, popular-democratic uprising to one, regain Iran’s independence from any form of foreign influence; two, restore Iran’s cultural authenticity; and three, introduce social justice and equity. This was the spirit of the revolution, captured by the slogan, “Neither East nor West, only the Islamic Republic.”

In the last three decades, Iran’s foreign policy has been geared towards strengthening ties with other developing countries, partly to compensate for its deteriorating relations with the West, which has been a source of capital, technology, and strategic support for more than a century. The ‘look East policy’ was not about substituting the US — and its primacy in Iran’s affairs — with a new set of characters, namely Russia and China. In Tehran’s calculation, it always enjoyed some measure of mutual-respect and balance in its bilateral relations vis-à-vis non-Western countries, no matter how powerful and influential they were. So, it found little fault in deepening ties with influential states outside the West.

With developing countries ranging from Brazil and Turkey to South Korea and Indonesia emerging as economic and strategic powerhouses in their respective regions, Iran found a good opportunity to reduce the impact of its deteriorating ties with the West — including leading industrial powers of Germany, France, Italy, Spain, and the UK in Europe — over the nuclear issue. However, it is China, with its booming economy, insatiable energy needs, and rising global profile, that has emerged as Iran’s most important external ally in recent years, especially after the dramatic deterioration of Iranian-EU ties over Tehran’s nuclear program. As a result, China has become Iran’s biggest trade, investment, and energy partner. Given China’s membership in the UN Security Council as well as its growing political and military capabilities, Iran has also seen Beijing — along with Russia — as a major strategic partner.

UW: Is Iran growing more dependent on China?

The recent imposition of debilitating Western sanctions against Iran’s financial, energy, and trading sectors has accelerated and deepened this trend. What we are increasingly witnessing today is not only growing Iranian dependence on China to offset the impact of Western punitive measures and stave-off a military attack by Israel or the West, but also worrying imbalance in bilateral affairs: Beijing has begun dominating Iran’s consumer markets, major infrastructural projects, and energy deals. China is also exploiting Iran’s growing isolation by pushing for more flexible payment schemes, barter deals (oil-for-junk contracts) and discounts on oil purchases. Meanwhile we have hardly seen any major Chinese move to significantly ameliorate Iran’s declining oil exports as Iran suffers from the introduction of the EU oil ban and US pressure on the biggest Asian economies to reduce Iranian crude purchases or to resolve the ongoing diplomatic deadlock over the nuclear issue. So, there is somehow a feeling that Iran is now becoming too dependent on an external power which is too self-interested.

The mood on the streets as well as the halls of power is changing: Iranian liberals are concerned with China’s assistance in providing censorship technology; Iranian industrialists are angry at the flooding of their home market with cheap, subsidized Chinese goods; Iranian consumers are fed-up with China’s sub-quality products; Iranian voters are concerned with China’s growing influence; and, Iranian leaders are disappointed with China’s unwillingness to honour its earlier investment pledges, settle its debts in foreign currencies, and increase total crude imports.

In short, Iran may have gained independence from the West, but China is beginning to fill its shoes, albeit in a more benign manner. No wonder, many Iranian leaders are beginning to re-examine their earlier expectations, while exploring ways to arrive at some mutually-acceptable compromise with the West over the nuclear issue. There are hopes for bilateral talks between Iran and the US to revive efforts at breaking the nuclear deadlock, whereby Iran will agree to further enrichment curbs and transparency in exchange for a reversal of sanctions, improved diplomatic-financial ties, and an unequivocal recognition of its peaceful enrichment rights, based on the Non-Proliferation Treaty.

Let’s bear in mind: Iranian foreign policy is not about alignments, but primarily the preservation of national integrity and independence — more so, with Iran’s current chairmanship of the Non-Aligned Movement.

UW: Can Iran, which possesses alternative sources of legitimacy, a divergent political system, and a different ideological constitution, follow China’s lead/model?

Iran and China are similar in many ways. They are both the leading revisionist forces in their respective regions, and also heirs to empires that dominated the two extremes of Asia. They are both critical of America’s hegemony in Asia, so it is no wonder the US identifies them as principle ‘strategic competitors’ to Washington’s global leadership in the new century. They are both products of a nationalist revolution, based on a distinct ideology which combines traditions as well as universal notions of revolution and justice. They also face similar strategic anxieties, surrounded by US allies and bases, which have formed a ‘string of pearls’. They both basically want a post-Western international order, where they are left to their own devices. Their objectives intersect almost perfectly: Iran needs capital and technology, while China needs secure and large-scale hydrocarbon suppliers. But, these similarities are quite superficial, especially when one looks at their divergent internal systems and situations. This is why Iran can’t really copy the Chinese model of state-led, autocratic capitalism. While China is a booming export-oriented market-economy, under the auspices of a developmental-autocratic state, Iran is an inward-looking, import-substitution economy, where oil revenues constitute the bread and butter of the state.

While China’s economy is heavily integrated into global chains of production, debilitating Western sanctions have increasingly isolated Iran. While China enjoys institutionalized bilateral strategic ties with the US, Iran is constantly under the threat of invasion by Washington and Tel Aviv. As a member of the UNSC and the world’s second largest economy, China is a de facto status quo power, while Iran is yet to be integrated into the essentially US-led order in the Persian Gulf. In China, a single political party, the Chinese Communist Party, dominates the entire system, where leadership transition is accomplished through consociational ‘selection’.

In contrast, Iran’s political system is much more ‘dynamic’, and there have been competitive elections for top political leaders as well as fierce rivalries between conservatives and reformists. Of course, the other issue is size: China is more than 15 times bigger in terms of population, with very different geographic, demographic, and economic characteristics. Popular nationalism – in China over the South China Sea disputes and in Iran over the nuclear program – is strong in both countries, but Iran is still rooted in its religious traditions, where the clerics continue to have strong spiritual as well as socio-political influence. So, I suppose the only place where Iran can learn from China is in terms of how to preserve the current political order while introducing rapid economic liberalization — although China is also beginning to feel growing democratic pressure with the rise of a new powerful middle class that has emerged after Deng Xiaoping’s ‘open door’ policy.

UW: Is Iran planning to go China’s way?

Over all, I don’t see Iran going China’s way. If Iran improves its external relations with the West and resolves the nuclear conundrum, resulting in the reversal of the current ‘national security mode’, I can see Iran going the Turkish way and/or somehow along the reformist wave of the preceding decade: more domestic political reforms, resurgence by liberal-reformist factions, balanced relations with both the East and the West, revival of republicanism, and greater economic dynamism. Iran’s domestic issues are inseparable from its ongoing confrontation with the West over the nuclear issue. The Chinese leadership, which oversees a nuclear-armed state, does not face similar external threats like Iran, so it is primarily focused on ensuring domestic social stability. Regime survival has a more domestic dimension in China, despite growing tensions in the wake of the US presence and festering maritime disputes, while the Iranian regime is facing threats on multiple fronts. Thus, the two regimes face a very different spread of threats, vulnerabilities, assets, and challenges, necessitating divergent political strategies and models to adopt, evolve, and survive.


Richard Javad Heydarian is a Manila-based foreign affairs analyst focusing on economics and international security. Besides being a foreign affairs consultant in the Philippine legislature, he has been a regular contributor to the Asia Times, Huffington Post, IPS News, and Russia Today. He is the author of the upcoming book, "The Economics of the Arab Spring: How Globalization Failed the Arab World"  (2013).

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