The Islamic Republic of Iran has approached China’s rise and the ongoing systemic shift in the global political economy from Euro-Atlantic towards Asia with optimism. While it celebrates the fraying of the post-Cold War US-led liberal international order that brought US military interventions in the Middle East and decades long isolation of Iran, it’s ‘Look to the East’ policy, first introduced under President Mahmoud Ahmadinejad (2005-2013), prioritises deepening of long-term bilateral and multilateral partnerships with major non-Western powers. More recently, the ‘Asian orientation’ in Iran’s foreign policy and economic diplomacy has received a boost following the unilateral US withdrawal from the Joint Comprehensive Plan of Action (JCPOA) or Iran nuclear agreement in May 2018 and the onset of conservative presidency of Ebrahim Raisi in August 2021.

Unsurprisingly, the developments in Iran-China relations, especially in the wake of Iran and China signing a 25-year strategic cooperation agreement in March 2021, have been securitised not only by analysts and officials in Washington but also observers elsewhere. China’s continued purchase of Iranian oil in defiance of the US sanctions and growing defence cooperation with Iran is seen not only as “undercutting the effectiveness of the US sanctions” against Iran, but aimed at challenging the US leadership in the Middle East. As Vienna talks sought to revive Iran nuclear deal remain stalled, the US Senate passed with super-majority a ‘motion-to-instruct’ sponsored by Republican senator Ted Cruz, seeking a report from the government on terrorism-related sanctions on Iran saying that such sanctions are necessary for limiting cooperation between China and Iran. On 25 May, the US Department of Treasury announced a new round of sanctions targeting what it labelled as an ‘international oil smuggling and money laundering network’ being run by the IRGC officials including former IRGC general and Iran’s Transport and Urban Development minister Rostam Qasemi. It also designated Hong Kong-based energy company China Hokum Energy Limited to purchase Iranian oil from the IRGC.

This paper elucidates the geoeconomic and geopolitical drivers of Iran’s pursuit of long-term strategic cooperation with China. In doing so, it seeks to demonstrate that notwithstanding the narrative of growing Iranian dependence on China, Iran’s China outreach is framed as a subset of a broader Iranian geoeconomic strategy in the region. It also argues that while seeking a long-term partnership with China, as envisaged by 25-year strategic cooperation agreement, Iran is committed to pursuing diversity in partnerships to maximise the opportunities for raising Iran’s geoeconomic standing in the region. Strikingly, President Raisi at the SCO summit in September 2021 argued that key infrastructure projects of the “One Belt-One Road Initiative, the Eurasian Economic Union and the North-South Corridor are not competitors, but complement each other. Iran is the link between the above three infrastructure projects. While, India-Iran relations remain impeded by unilateral US sanctions, Iran’s relations with China and Russia have maintained an upward trajectory, not least for their symbolic value in presenting a united stance against the US unilateralism. This paper, however, limits itself to a discussion of the growing Iran-China partnership in context of Iran’s regional geoeconomic strategy and briefly elaborates on the growing defence cooperation between Iran and China.