China last week signed a $400 billion, 30-year investment deal with Iran. American sanctions against Iran are effectively nullified. China’s state press declared, “As it stands, this deal will totally upend the prevailing geopolitical landscape in the West Asian region that has for so long been subject to US hegemony.” As former Indian diplomat MK Bhadrakumar reports in Asia Times, Chinese state media declare that China will trade with Iran and other Central Asian currencies in its own currency, bypassing the dollar-based world banking system. U.S. leverage against Iran is gone. It was obvious for the past year that China might play the Iran card. I warned of this in August 2020.
The Biden administration now says it’s seeking Chinese help to revive the Iran nuclear deal. That sounds pathetic and defeatist, but the fact is that as long as China is willing to prop up Iran’s economy, there isn’t a damned thing we can do about it. This is payback for Washington’s attempts to stifle China’s dominance in 5G broadband by choking off the supply of high-end computer chips to China and similar measures. Trump and his team of China hawks, including Mike Pompeo and Peter Navarro, do not appear to have considered how China might outflank us. Now the Biden administration has been presented with a fait accompli and probably will come to terms with a Chinese diktat (supported by the Europeans and Russia).
After the dust settled on our economic war with China, U.S. imports from China are at a record, and China’s economy shows the world’s fastest growth.
On February 4, I warned that a “Pax Sinica” (like “Pax Americana” or “Pax Britannica,” except run by China) was taking shape in the Middle East. The original Asia Times report is behind the paywall. Here is the article in full:
A Pax Sinica takes shape in the Middle East
The emerging Sinocentric bloc of Turkey, Iran and Pakistan could leave America’s ally India isolated and weak
A “Pax Sinica” is emerging in the Middle East and Central Asia in plain sight, albeit unnoticed by American planners. The main brace of the strategic architecture is an emerging alliance between Pakistan, a Chinese economic dependency, and Turkey, which relies increasingly on China for financing and trade.
Chinese media reported the Turkish foreign minister’s visit to Pakistan January 12 to 13 as a key step towards such an alliance. And if Turkey and Pakistan ally, “Iran has no choice but to find a way to join the Turkish-Pakistan camp,” in the view of a Chinese military site reposted by NetEase.
I first raised the prospect of a “Pax Sinica” in the Middle East in 2013, and noted last year that a much-discussed (but so far only discussed) Sino-Iranian investment deal of up to $400 billion was “a move on a global game board in response to American efforts to hinder China’s breakout as a technological superpower.”
The Turkey-Pakistan rapprochement of the past several months adds a new dimension to China’s ambitions in the region.
While America focused on the peace agreements between Israel and the UAE, Bahrain and Sudan, China maneuvered among the only three Muslim states with significant military capacity and economic potential.
The Belt and Road Initiative will provide the economic foundation for Chinese hegemony from the Indian Ocean to the Black Sea. The emerging Sinocentric bloc of Turkey, Iran and Pakistan will leave America’s ally India isolated and weak, Chinese planners believe.
It’s geopolitics played on the principles of Go, whose object is to encircle and isolate the opposing pieces.
The “Abraham Accords” between Israel and several Arab states have symbolic importance, and expose the Arab-Israeli conflict as the least interesting fault line in Western Asia, as former Israeli ambassador Michael Oren wrote January 12.
They are the result of American weakness rather than strength; Trump’s declared intention to remove American boots from the region’s ground left the Gulf States to fend for themselves against Iran and Turkey.
The Gulf monarchies decided that Israel was less objectionable than Iranian Shi’ites or the Turkish-backed Muslim Brotherhood. But Israel and the Gulf States cannot quite fill the gap left by the strategic withdrawal from the United States. China means to fill it by working with Turkey, Iran and Pakistan.
The Gulf States, moreover, have scant economic potential beyond hydrocarbons and a laughable military. Iran boasts two of the world’s best electrical engineering schools and a formidable weapons development capacity, while Turkey has a dozen universities that train engineers to global standards.
Pakistan’s level of development is lower, but it has 220 million people and a huge talent pool from which to draw. The three countries plus Azerbaijan, a likely addition to the Chinese axis, have among them 400 million people, as many as the whole of the Arab world, but with far higher levels of economic development and education.
The fact that Iran and Turkey are historic enemies with three centuries of Ottoman-Persian war behind them beguiles American strategists, who see Turkey as a regional counterweight to Iran.
A rogue NATO member that riled the United States by purchasing Russian air defense systems, Turkey remains notionally part of the Western alliance. China understands that longstanding enemies sometimes make the best allies. Like France and Austria in the Seven Years War, or Russia and England in World War, Turkey and Iran will become allies because they are too dangerous to each other to remain enemies.
China changes everything in the region. As standalone enterprises, Turkey’s “neo-Ottoman ambitions” and Iran’s “Shi’ite Crescent” are history repeated as farce, in Karl Marx’s quip.
As I have reported in detail, the two countries are the remains of multi-ethnic empires reduced to the condition of mediocre nation-states. The ethnic Turkish population and the ethnic Persian population of Iran have some of the world’s lowest fertility rates, and stand to shrink drastically as a proportion of overall population, undermining the political balance in both countries.
Both are subject to chronic economic crises as populist governments with imperial tastes and indigent resources overspend on military adventures and subsidies.
Now China has offered the Turks and Iranians a grand bargain: Abandon your imperial pretensions, and ally with China, which can provide you with infrastructure, technology and financing to restore your ailing economies. Pride as well as practicality make the little imperialists of Ankara and Tehran reluctant to take China’s offer.
The Chinese don’t leave anything on the table (and sometimes take the table, too). But the strategic withdrawal of America from the region and their pressing economic problems leave them little choice. America doesn’t need Middle Eastern oil, but Asia does.
Like Don Corleone, Beijing keeps its friends close and its enemies closer. Turkey traditionally posed as the protector of China’s Uighurs, the Turkic people who form the majority of China’s Xinjiang Province.
China has suppressed Uighur aspirations for independence ruthlessly, with methods that Turkish President Erdogan denounced as “genocide” in 2009. Former Secretary of State Mike Pompeo also called China’s treatment of the Uighurs “genocide” in 2020, while Turkish security forces rounded up Uighur exiles.
China signed an extradition treaty with Turkey in December that remains under consideration by Turkey’s parliament; if ratified, it would require Turkey to deport Uighurs back to China.
One cannot be more Catholic than the Pope or more Muslim than the Caliph, and Erdogan’s indifference to the Turkic inhabitants of a territory he sometimes calls “East Turkestan” vitiates the West’s complaints about human rights abuses in Xinjiang.
This stance reflects Erdogan’s weakness as well as his aspirations. Turkey’s currency collapsed last year and still trades at half its 2016 level against the US dollar, and the country nearly went broke.
As Uwe Parpart and I reported last August, Erdogan provided cheap credit to the country’s middle class, supporting a boom in the prices of homes that represent the vast majority of Turkish household assets. That dodge nearly crashed along with Turkey’s currency; Erdogan was forced to fire his finance minister (also his son-in-law), tighten monetary policy, and seek help from China.
During 2020, Turkey’s central bank drew on a $400 million swap line with the People’s Bank of China, and for the first time ever Turkish importers paid for Chinese goods in RMB. It sold a 48% stake in its Kumport container terminal to a Chinese company, and sold the Yavuz Sultan Selim Bridge for $688 million to a Chinese group.
More important to Turkey in the long term is China’s Belt and Road Initiative, which has built direct rail links between Turkey and China and promises to link Turkey to China’s economic growth.
Turkey’s Transportation Minister Adil Karaismailoglu Jan. 29 presided over a ceremony at the Ankara rail station to dispatch Turkey’s first export freight trains to Russia and China. The China route runs from Turkey’s easternmost city Kars to the Georgian capital Tbilisi and then to Azerbeijan’s capital Baku.
A number of rail or sea/rail combinations are under consideration linking Turkey to Central Asia and thence to East Asia.
With this background, Turkey’s rapprochement with Pakistan is the key to China’s regional strategy. The Chinese military news service “Southern Military Situation” posted the following item on the NetEase news channel January 30. Among things it claims in passing that Pakistan will use its nuclear weapons to defend Turkey:
According to reports from Turkey, the “Turkish World” seeks friendship with Pakistan. Turkish Foreign Minister Kavsuglu visited Pakistan. The two sides discussed a “road map” consisting of 71 points: Turkey and Pakistan will develop cooperation in the defense industry. In addition to bilateral meetings in the form of Turkey-Pakistan, a tripartite meeting of foreign ministers of Turkey, Azerbaijan and Pakistan will also be held in Pakistan…
There is a clear reconciliation between Turkey and Pakistan. Azerbaijan is participating in the Turkey-Pakistan plan, which is therefore increasingly being drawn into Turkish strategy and is moving away from Russia. The Turkish side pointed out: “These relations have driven Azerbaijan further and further away from Russia. With the emergence of the Nakhichivan’s corridor along the Iranian border, Turkey has gained access to the Caspian Sea. After successful negotiations in Islamabad, Turkey be able to bypass Suez [through a combination of rail and roll on-roll off shipping]. Turkey is considering building a railway to Central Asia and China in Pakistan.”
In addition, “Pakistan’s nuclear weapons will support Turkey.”
… With the participation of Azerbaijan, the Turkish-Pakistan reconciliation poses a direct threat not only to the United States, but also to India… Since US sanctions have not been lifted, Iran has no choice but to find a way to join the Turkish-Pakistan camp.
Turkey’s Erdogan vociferously supported Pakistan’s claims against India in Kashmir last year, comparing the “struggle of Kashmiris” to the Ottoman Empire’s fight against the Allies during World War I.
But Indian-Turkish relations deteriorated after the leak of Indian intelligence reports claiming that Turkey was secretly agitating among India’s Muslim majority, and had become “the hub of anti-India activities” alongside Pakistan.
One report alleged that “fronts for the Turkish government or the outfits it supports – some of them directly linked to Erdogan and his family – appeared to have made deeper inroads in India than assessed earlier,” via “Turkish state media, educational institutes and the nonprofit sector, or NGOs,” the Hindustan Times reported last year.
Another indication of Turkey’s expanding power and collaboration with Iran, Chinese commentators say, is the January 4, 2021, lifting of Saudi Arabia’s blockade against Qatar, Turkey’s main ally in the Gulf.
Dong Bing, a researcher at China’s Institute of Contemporary International Relations wrote January 11: “The resumption of diplomatic relations is more of a unilateral concession by Saudi Arabia. At the beginning of the severance of diplomatic relations, the Saudi camp…proposed to shut down [the Qatar news service] Al Jazeera, close the Iranian Embassy in Qatar, expel Iranian Islamic Revolutionary Guards, close the Turkish military base in Qatar, and cut off Qatar connection with the Muslim Brotherhood …
“Turkey and Iran took the opportunity to provide aid to Qatar and expand their economic, trade and military cooperation, which led Qatar closer to Turkey and Iran. Since then, the Gulf Coordinating Council has fallen apart, divisions in the Arab world have intensified, the regional influence of Iran and Turkey has continued to expand, and the Arab sector has been further eroded in regional affairs.”
Turkey has considerable leverage over Saudi Arabia. Chinese observers note that Turkey might intervene in Yemen on the side of the Houthi rebels whom Saudi and UAE military forces have been fighting for the past several years.
Iran has supported the Houthis and probably provided them with missiles capable of striking Saudi cities. “After Libya, will Turkey defeat the UAE in Yemen?” asks one commentary. Turkey and the UAE backed opposing sides in the Libyan civil war, and Turkey came out on top.
UAE media, the Chinese analyst notes, “has been particularly vicious in the past three months, accusing Turkey of establishing a presence in Yemen, especially in supporting the Al-Isra Party with links to the Muslim Brotherhood.
The allegations against Ankara include Egypt’s growing concerns, such as alleged Turkish military operations in the southern coastal area under the guise of humanitarian assistance, and “Qatar-Turkish conspiracy” to establish militia recruitment camps.”
The Chinese report adds: “Of course, Turkey has the largest overseas military base and the largest embassy in Mogadishu, the capital of Somalia. Therefore, it is logically possible for Turkey to launch a Libya-like operation in Yemen against UAE-supported forces …
“At the same time, the complicated relationship between Turkey and Iran, the ally of Yemen’s Houthi ally Iran, must also be considered. Iran recently expressed support for the Libyan government supported by Turkey, while Ankara expressed opposition to US sanctions against Tehran.”
Once again, Chinese commentators note favorable collusion between Turkey and Iran against America’s allies in the Persian Gulf.
Meanwhile, Chinese analysts predict that the Biden Administration will fail to resuscitate the Iran nuclear deal. Wang Jian, the Director of International Institute of Shanghai Academy of Social Sciences, wrote in his year-end outlook: “Due to the deterioration of Iran’s internal and external environment, Iran’s domestic resolve is on the rise. The hardliners won the parliamentary elections in early 2020, and the assassination [of General Suleimani] forced [Supreme Leader] Khamenei and the military to retaliate, which will restrict Rouhani and his subsequent government from negotiating with the United States.
“In the 2021 Iranian general election, the hardliners are likely to make a comeback. Once the hardliners come to power, the possibility of renewing the Iran nuclear agreement is unlikely, even if the United States and Iran return to the negotiating table.”
China’s prospective alignment with Turkey, Iran and Pakistan would accomplish several objectives.
First, it would lock 400 million people into China’s Eurasian infrastructure program and technology outreach;
Second, it would establish a contiguous territory of friendly countries stretching from the Indian Ocean to the Mediterranean;
Third, it would isolate America’s allies (Israel and the Arab Gulf states) and weaken a prospective ally, India;
Fourth, it would help contain internal problems within China itself, prominently including the Uighur separatists in Xinjiang; and
Fifth, it would wrong-foot the United States and give China strategic leverage against American attempts to contain it.
In general, China has no interest in war (although it may not mind a bid of bloodletting on the Indian subcontinent, which would have no economic ramifications). The last thing China wants is a war in the Persian Gulf, from which it is the world’s biggest oil importer. But it may be more difficult than China anticipates to restrain its restive, power-hungry clients.