China versus India: Who wins in the Checkers and Chess games in Iran?

Photo: For Representational Purposes Only.

(Editor’s Note: The views are that of the author’s. For the writer’s other interests, read the credit line at the end of the article.)

By Rajiv Prakash Saxena

With one stroke of a pen and $400 billion as long-term investment in Iran, China‘s military deal with Tehran under the secretive 25-year plan has reshaped the geopolitical map of both the Middle East and Near East regions of the world.

The China-Iran deal essentially ends what was billed as the apolitical ‘Belt and Road Initiative‘ (BRI) and confirms the United States Department of State‘s assessment that the initiative has acted as a colonial project for China.

Under the deal, China’s People’s Liberation Army – Air Force (PLA-AF) will have access to the Iranian air bases. In return, China will get Iranian oil 32 per cent cheaper. And that is a deal! Though made much of the deal by Iran, it has not yet been confirmed by China.

Chinese purchases of Iranian oil have decreased substantially in the past two years and the overall bilateral trade fell to $23 billion in 2019 compared to a peak of $35 billion. During Chinese President Xi Jinping‘s visit to Iran in Jan. 2016, an ambitious target of $600 billion trade in 10 years was announced. It has turned out to be mostly hype.

In the post-Cold War world, all geopolitical alignments had gone out of the window. This allowed Israel to break into the Near East and in the past 10 years, penetrated both China and India at the same time and termed its ties ‘marriage made in the heaven’, a juicy metaphor to both nations in true business upmanship and great style.

Whether or not Benjamin ‘Bibi’ Netanyahu makes it through internal Likud party politics or not, his strong pivot to India may have opened up an important new path in a world that appears increasingly to be moving towards a post-American hegemony.

While Chinese and American tensions continue to rise, and in a sense, define the breakdown of future alignments across the world, Israel’s growing alliance with India as well as its covert relationship with Sunni Arab states are just some of the alignments that appear to be developing.

In a sense, Israel and India are beginning to form a counter nucleus for an alliance that can offer another way forward. This alliance is based on those countries that have ascended as global influencers in the 2010’s.

Greece, Cyprus, eastern Europe, India, Israel and more are fast rising from the shadows of those countries and alliances that were built in the wake of World War II and the end of the Cold War.

Netanyahu has been the main pursuer of building alliance with most of these countries and it appears that the East Mediterranean energy and defence alliance with Cyprus and Greece, as well as strong anti-terror training and defence trade with eastern Europe and the Visegrad countries mean that Israel is uniquely situated to become a pivotal global leader regardless of who wins this year’s American elections or even if Bibi remains the Prime Minister.

Israel and India’s growing military and economic relationship is fast becoming the lynch-pin to all of the above. Will the road without real American support and China’s direct overture to Iran be bumpy? Yet, the relationships that have been built offer a real way to handle the transitionary flux towards a far different world order.

With Iran’s ascendancy in the region and threat to the Middle East balance of power, even Sunni states had begun to warm to Israel. Israel, it is rumoured, took to demolish the nuclear installations head on and became the darling of the Sunni world overnight, as the number of attacks on Iran nuclear installations, and its boats and ships, have increased of late in the recent weeks.

At least seven ships had caught fire at the Iranian port of Bushehr, the Tasnim News Agency reported a week back, in what appeared to be the latest in a series of unexplained incidents around nuclear and industrial installations since late June.

No casualties were reported, but plumes of dense black smoke billowed into the air, in a photograph of the incident published by the official Islamic Republic News Agency. State broadcaster Islamic Republic of Iran Broadcasting showed fire-fighters tackling clouds of smoke in a shipyard at the southern port on the Gulf, which was a cause of concern.

Iran’s elite Islamic Revolutionary Guard Corps (IRGC) certainly has a thing for subterranean facilities and repeatedly intimated that it has well-hidden missile stockpiles and launch sites, and even full-fledged underground factories. So far, no visual evidence of the IRGC navy-operated compounds has been made available.

The Persian Gulf has seen an increase in foreign military since last summer, following a series of maritime incidents, including mysterious attacks on oil tankers. The likes of the US and the United Kingdom were quick to blame Iran for these incidents, but Tehran denied the allegations, pointing to the lack of evidence.

Washington, in particular, deployed additional forces to the area to ensure ‘safe’ navigation. Concern about the Coronavirus has naturally pushed security-related developments out of the headlines. But that doesn’t mean the clandestine campaign related to Iran has at all abated during the past week.

Only one event, the explosion at the centrifuge production facility at Natanz at the beginning of the month, has been attributed by foreign media to Israel with certainty. Israeli spokespeople, including Netanyahu, Defence Minister Benny Gantz and Intelligence Affairs Minister Eli Cohen, have declined to comment on the claims.

But the ever-expanding chain of events, even if not connected by a single thread, is upping the internal pressure on the Iranian regime and perhaps prodding it to act in response. Sources say the damage to the Natanz facility was immense under mysterious circumstances.

Nikki Haley, Donald J. Trump‘s former ambassador to the United Nations, has expressed frustration over the impending partnership between Iran and China. “The partnership … would vastly expand Chinese presence in banking, telecommunications, ports, railways and dozens of other projects.”

Iranian Foreign Minister Mohammad Javad Zarif has said that China presented its draft for partnership with Iran back in the Iranian month of Esfand (February 20 to March 19) based on Iran’s draft.

“In the month of Esfand, the Chinese presented their draft based on a draft we had prepared and we are currently examining and finalising these two drafts so as to reach an agreement.” He noted that during his video conference with his Chinese counterpart 10 days ago, he expressed Iran’s readiness for holding talks and finalising the draft document.

When the two sides reach an agreement and finalise the text of the document, it will be presented to the Islamic Parliament of Iran to be approved legally. In the Raisina Dialogue held at New Delhi in January 2020, Iranian Foreign Minister gave a scintillating Iran’s vision. Yours truly had the honour to chat with him and understand his thoughts.

He tried his level best to have such investments from India too. Such is my hunch. He also came to India during 2019 elections and had met late Sushma Swaraj, then India’s Minister of External Affairs.

It appears that India may also have been given a draft. These reports are being encouraged by Iran to suggest that it has powerful friends and that the US has been unable to isolate it.

That is how it projected the trilateral Iran-China-Russia naval exercise that was held in the Gulf of Oman in June, calling it a “new triangle of power”. China attaches importance to its relations with Iran, which is a key source of energy supplies, a significant component of its ambitious BRI, and a potentially lucrative market for its project exports and manufactures.

However, like India, it has also, in parallel, cultivated closer relations with Saudi Arabia and the United Arab Emirates (UAE), which are currently bigger suppliers of oil and gas to China than Iran is.

Just weeks after the trilateral naval exercise, the bi-annual China-Arab States Cooperation Forum met in Jordan earlier this month with ringing declarations of China-Arab friendship. China has also emerged as a major arms supplier to the Arab states and has conducted naval exercises with Saudi Arabia and the UAE

China’s deal with Iran essentially means that Israel can no longer play neutral. The same goes for India and for sure, we were outsmarted hands down. China’s infusion of cash and technology makes Iran that much closer to regional hegemony, of course, under the thumb of the Chinese Communist Party in Beijing.

China has great experience in both drilling on shore and offshore and will provide necessary technology to Iran to build, design, fabricate and launch offshore platforms using specialised software developed by an European Union nation, where I also did my six-month sabbatical and interacted with some Chinese.

India and Israel will only grow closer together and both will need to rely heavily on the US to help counter both China and Iran. Most importantly, Chinese investments in Israeli companies will no doubt be curtailed by the Netanyahu government for the time being, but the silent coup was a great news the world over.

New World Order shaping with the ‘Mullah‘ and ‘Marxist‘ coming together with Leftist sympathisers, and on the other hand, it is the US, India, Australia, Japan, Israel, United Kingdom, France and Germany.

The fence sitter, who can really swing fortunes, is Vladimir Putin of the Russian Federation. Yes, the new alliance on the block to challenge Chinese hegemony, now has got rogue states like Pakistan, North Korea, Iran (which was called the Axis of Evil), Syria and Turkey and a few African nations. China is using the debt trap diplomacy to build an alliance. Eventually, Russia will join the alliance led by the US.

While the proposed deal offers many long-term benefits to Iran and China, it also carries big political risks. Within Xenophobic Iran, there is strong political opposition to handing over the economic keys of the proud nation to a foreign power.

Results of the Chinese investments in Pakistan, Sri Lanka, Somalia and Kenya showed drastic results: these nations lost their sovereignty. Tehran knows that Beijing will be ruthless in taking advantage of Iran’s current weakness and economic vulnerability, and its political untouchability in the world.

Although the heat being turned up by the Trump administration is getting to the regime, Tehran knows the dangers of jumping from the frying pan into the fire. Sacrificing Iran’s strategic autonomy will be too much of a price for the Chinese economic lifeline.

Iran is also aware that the proposed deal with China will accentuate the confrontation with the US. Beijing also knows Iran is not pliable as Pakistan or North Korea or Kenya or Somalia or Sri Lanka, and will not simply accept China’s harsh terms for the bailout.

China is also aware that pushing ahead with the Iran deal at this juncture will add another element to the deepening political contestation with the US. Having teased out the prospects for a historic agreement, Tehran and Beijing are likely to wait till the outcome of the US presidential elections in November.

Iran and China hope that Trump’s defeat will encourage Washington to reconsider its current hostility towards Tehran and Beijing. If Trump gets re-elected, Tehran and Beijing might decide there is no option but to take some risks.

In the interim, the proposed deal helps the Joe Biden campaign argue that Trump has foolishly pushed Iran into China’s lap.

India continues to harbour good relations with Iran. It has not given up hope. India is the only foreign country that is currently participating in a major development project in Iran despite the US sanctions.

The Chabahar Port development project, in southeastern Iran, is the anchor for the expansion of economic relations between the two nations. India is still doing Chabahar. India was the first country that put in place a banking mechanism to be able to trade with Iran in national currencies.

This Rupee-Rial channel is being facilitated by the Central Bank of Iran and the Reserve Bank of India. It has helped the traders in both countries for the exchange of commodities. UCO Bank is also the Indian partner in this mechanism and India has a set of six banks on the Iranian side that are designated by the CBI and trade is going on through these banks.

Currently, India mostly exports agricultural items like tea, rice and some spare car parts to Iran, and in return, Iran also exports to India. India is grateful that Iran has trusted it with the first phase of developing Shahid Beheshti port in Chabahar.

Indian partners are using Iranian facilities in the port but we have placed orders for the necessary equipment from China, Italy, Finland, and Germany and hope that the first delivery will be in October.

India considers Iran as a pivot for its economic interactions with Central Asia, with eastern Europe through Azerbaijan and with Commonwealth of Independent States countries. For this, the region have two transport corridors. One is Chabahar, as the gateway to Central Asia, and the other is Bandar Abbas.

India has also partnered with Afghanistan to transit goods through this port. Iran, India, and Afghanistan have signed a trilateral agreement based on which India uses Chabahar port as a launch pad to supply goods, and equipment to the country and vice versa.

The project has not been handed over to China — at least not yet — so the ‘India loses, China wins‘ narrative is premature. India should not arrive at hasty conclusions and damage its relations with Iran, which remains strategically important.

Of particular concern is a reported reference in the 25-year strategic plan of China constructing a new port at Jask at the mouth of the Strait of Hormuz. This may be linked to oil and gas fields inland through pipelines and allowing shipments even if the narrow Hormuz Strait was closed.

India has not given hope, while Iran dithers, and waits for the Iranian Parliament to give its opinion on the China-Iran deal!

(The writer was a technocrat in the Government of India and a thought leader on eCommerce, eProcurement, eSign, DSCs and Internet Security. A graduate of UBC, Vancouver, Canada, he has written eight books and done United Nations assignments.)

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