It has been a dramatic week for Iran-China watchers, as news emerged that Iran’s seizure of an international oil tanker bound for the US was in retaliation for US seizure of an Iranian oil tanker bound for China. Chinese netizens are up in arms as they say the issue points to the need to further develop China’s naval capabilities. At the same time, exports to Iran have spiked and plans are accelerating to carry out joint military operations. While this signals closer Sino-Iranian “strategic” relations in the short term, such policies risk angering average Iranians who complain about poor quality Chinese goods, and as small business owners face competition from larger Iranian companies with the capital to import them in large quantities.
Tanker Seizure Riles Chinese Internet
On April 28th, 2023, Iranian state television showed dramatic footage of the IRGC seizure of an oil tanker off the coast of Oman. It soon emerged that the decision was undertaken in response to the United States’ seizure of an Iranian vessel with oil bound for China the day before. The Chinese-owned, Turkish-operated tanker chartered by Chevron and bound for Houston is a perfect example of the murky and complex nature of international shipping, but the fact that the owner was Chinese has been emphasized by some Western commentators as spelling trouble for Sino-Iranian ties. But the response in the Chinese media tells a different story.
Take that, Sheriff of Nottingham!
Chinese commentators saw the incident as a modern-day Robin Hood story on the high seas. One reporter wrote that “the United States, which always robs other people’s oil, was finally robbed by others for once…After all, as far as Iran is concerned, since the United States can confiscate and sell looted Iranian oil, why can’t they confiscate and sell American oil?” The incident “exposed the hegemony of the United States” and “once again reminded us that China must be strong and…needs to play a more active role in resolving Middle East issues through dialogue and cooperation.” For some, the fact that the incident was in response to the US redirecting a Chinese-bound tanker days earlier was seen as a provocation and indication of the need to strengthen China’s naval projection capacity. “We have to think about this question: the actions of the US military have already threatened the energy sources of our country. Do we need to provide assistance for this trade route from the Persian Gulf to the South China Sea? What about full escort?”
The flag follows trade
The incident highlights growing Chinese desire to participate in the maritime security system to protect its own trade and investments, and prevent the US from using its self-appointed position as guarantor of global maritime security to harm Chinese interests. The recent announcement that Iran was ready to hold joint military exercises with China in order to push back against “unilateralism” and promote a “multipolar world,” while not directly related to the seizure of the tanker, can be understood in that same context.
Increase in Economic Ties
In recent months, there has been a noticeable increase in Chinese exports to Iran. This surge in trade comes amid growing efforts to improve the ability to import consumer products from China. Alaeddin Borujerdi, the chairman of the Iran-China Friendship Association, has said plans are being evaluated for Chinese investment in the southern railway system and creating a direct shipping line between Iran and China. There are also plans to increase the number of flights between the two countries, as demand increases substantially in part due to a surge in Chinese tourists bound for Iran. Exports totaled $1.5 billion, the highest monthly value since May 2018, largely driven by electrical equipment. Automobile imports have also started in earnest, and are being widely promoted by the government amid criticism of stagnation in Iran’s automobile industry and inability to meet domestic demand. Oil imports remained at zero, but reports indicate that unofficial oil imports remain strong.
But Who Wins?
While such developments might be seen as a positive step towards closer bilateral ties, there are also concerns that such policies could backfire and lead to discontent among the Iranian populace. Many Iranians have voiced complaints about the poor quality of Chinese goods that flood Iranian bazaars at cheap prices and compete with local products. This has led to widespread frustration and anger, as many Iranians feel that they are being taken advantage of by Chinese exporters. And with larger companies having the capital to import goods in large quantities, local businesses may struggle to compete. At the same time, large Iranian business owners stand to gain considerably. The situation illustrates the way in which Iran-China ties create both winners and losers, and carry risks and opportunities for the Iranian government, caught between the need to satisfy the demands of its economic elites and the growing discontent of the average citizen.
