THE emergence of China as the world’s new economic and technological power is posing a threat to the hegemony of the United States, leading to political shifts in the international arena. Earlier this year, Pakistan’s two neighbouring countries, China and Iran, signed a 25-year landmark deal, called the Strategic Cooperation Pact, to enhance interaction in a range of fields amid continued US sanctions over the latter.

The New York Times had published the leaked 18-page agreement last year, which revealed that China will be investing hundreds of billions of dollars for development in various sectors of Iran, including energy, ports, railways, cyber security and transportation. Besides, a joint venture for weapon design and development is also part of the deal. A joint bank will also be established that will help the Iranian economy. In return, China stands to receive heavily discounted Iranian oil and gas for the duration of the pact.

This deal will have far-reaching implications, particularly on India-Iran and US-Iran relations, while Pakistan will have to take a serious look at its own diplomatic engagements.

India had agreed to invest heavily in port and railway infrastructure of Iran. Its main aim in building the Chabahar Port in Iran was to establish an alternative route to Afghanistan, bypassing Pakistan.

It also agreed to build Chabahar-Zahedan railway which cannot be materialised until US lifts its sanctions on Iran. The new US administration, led by Joe Biden, appears little interested in relaxing the sanctions, which is a setback for India and has helped China gain a firm foothold in Iran.

Pakistan, as the third party, will gain the most from this strategic partnership between Iran and China as it reduces India’s involvement in Iran. Moreover, the deal would improve the relations between Tehran and Islamabad and will be mutually beneficial.

Gwadar and Chabahar can be declared sister ports to increase the trade influx. Pakistan and Iran earlier in the year signed a memorandum of understanding (MoU) to establish ‘border markets’ that will not only enhance bilateral trade, but will also provide economic opportunities and sustenance to the local people on both sides of the border.

The two countries are also trying to find different ways, including a free trade agreement, to boost bilateral trade.

In addition, CPEC can witness a westward expansion, and will have the potential to facilitate trade among Pakistan, Turkey, Iran, Azerbaijan and China. In short, it is a win-win situation for Pakistan.

US President Joe Biden, during his election campaign, had talked of returning to the Joint Comprehensive Plan of Action (JCPOA), an agreement signed between Iran and several world powers in 2015. Iran is now demanding the lifting of sanctions before agreeing to any new deal with the West.

The Beijing-Tehran partnership is a shock to the US, while Iran is now and looking forward to better days ahead through smart diplomatic moves. Iran’s strategic partnership with China is a blessing for several countries, while some others are not quite happy.

Omar Shahkar
Islamabad

Published in Dawn, June 18th, 2021