China’s Great Game in Iran

Since the early 2000s, China has become Iran’s top trading partner and oil customer; cooperation extends to arm sales and geostrategic balancing against the United States. Chinese planners have identified Iran as one of the most important countries in connecting Asia to Europe through its Belt and Road Initiative. Belt and Road is the flagship foreign-policy initiative of Chinese President Xi Jinping’s tenure. The ultimate goal of the initiative is to restructure the system of global trading rules and investment practices into one that is more favorable to China. It also aims both to project of soft power and to establish the foundations for China’s hegemony in Eurasia.

Much of the vision for Iranian-Chinese cooperation was laid out in Xi’s January 2016 state visit to Tehran. The two states agreed to expand trade to $600 billion over a 10-year period while also building stronger cooperation as part of a 25-year plan. In addition to trade, China is a leading investor in the Iranian market. About 100 major Chinese companies invest in Iran’s key economic sectors, especially energy and transportation. For example, the China National Nuclear Corporation is redesigning Iran’s Arak IR-40 heavy water reactor to address nonproliferation requirements as part of the 2015 Iran nuclear deal.

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