This article first appeared in The Edge Financial Daily, on January 27, 2016.

CHINESE President Xi Jinping covered a lot of ground in his first swing through the Middle East, announcing US$55 billion (RM236.5 billion) in aid and giving a speech to the Arab League in which he vowed not to seek proxies, a thinly veiled jab at US history in the region.

Xi’s most interesting stop was in Iran, where he planted a flag for Chinese business and cast his country as a more accommodating alternative to the West. As the first major world leader to visit Tehran since US and European sanctions were lifted, Xi sought to present China’s commitment as long term, agreeing last Saturday to a pact pledging economic cooperation for the next quarter century. The two sides also signed a strategic partnership that covers military and security cooperation.

Such moves provide some of the clearest evidence yet of Xi’s willingness to revise China’s traditional policy of non-interference and use its economic clout to build geopolitical influence. Besides offering a chance to lessen dependence on Saudi oil, Iran offers a potential partner in China’s efforts to challenge the international order.

Not only did Xi use the trip to formally elevate ties with Iran, he tried to show that China was in it for the long haul. China becomes Iran’s biggest trading partner and top source of capital and investment while sanctions kept out Western rivals.

* China gave Iran a 25-year strategic cooperation plan, committing to increase two-way trade to US$600 billion over the next decade. Flows between the two countries stood at some US$54 billion in 2014, before the plunge in oil prices.

* Xi and Iranian counterpart Hassan Rouhani emphasised two millennia of history between their two cultures. That shared history helps build a case for Xi’s signature plan to build a “New Silk Road” of highways, railways, ports and pipelines across the present day Middle East.

* Iranian Supreme Leader Ayatollah Ali Khamenei reciprocated, thanking China for its “enduring support” and assuring Xi that “Iranians had never trusted the West.”
“Ties between the two sides were solid, but abnormal in the sense that they were largely a result of Western sanctions,” said Li Guofu, who overseas Middle Eastern affairs at the government-run China Institute of International Studies in Beijing. “Now, as Iran returns to the international community, China would like to lock the relationship in a sustainable long-term framework and on a permanent level.”

The agreement most likely to catch the eye of Pentagon planners is China and Iran’s pledge to increase security ties, promising a stronger bond between the US’s big strategic rival and one of its fiercest critics in the Middle East.

* The two sides agreed to increase military exchanges and coordination. That expands on ties fostered during the sanction era.

* They also promised greater collaboration fighting terrorism and cybercrime, including training, technology and intelligence-sharing.

* China supported Iran’s application for full membership in the Shanghai Cooperation Organization, a China-led regional security framework.

“For China, Iran is first among equals in the Middle East due to its anti-American stance. Iran is the only country in the region where the US lacks a foothold,” said Ali Vaez, an Istanbul-based senior Iran analyst with the International Crisis Group. “That is a critical point in China’s long-term geopolitical calculus.”
Xi tried to avoid alarming Iran’s chief regional rival, Saudi Arabia, which is also China’s largest supplier of foreign oil.

* In a speech at Arab League headquarters in Cairo, Xi said China was not seeking “proxies” and would not try to fill any “vacuums.”

* The president visited Riyadh first and pledged to stay out of the region’s sectarian feuds and follow a policy of “constructive engagement.”

* China upgraded relations with both Saudi Arabia and Iran to the same “comprehensive strategic partnership,” although the Saudi partnership was largely economic and limited security exchanges to antiterrorism cooperation.

“Frankly, it is doubtful how long China can sustain this approach as it gets more involved in the region,” said Michael Singh, managing director at the Washington Institute for Near East Policy and a former regional adviser to the National Security Council. “Its partners are likely to increasingly demand that Beijing take their side in the region’s conflicts.” — Bloomberg