In a highly symbolic move, the Iranian Council of Ministers recently approved the opening of a Chinese consulate in Bandar Abbas, Iran’s main trading port and capital of the coastal province of Hormozgan. While Tehran currently has three consulates in China, this will be Beijing’s first in Iran.

This development is likely linked to the 25-year strategic pact Iran signed with China in March 2021. The deal – which includes economic, military and security cooperation – brings Tehran into Beijing’s megaproject, the Belt and Road Initiative (BRI). While the deal was signed nearly a year ago, it began the “implementation phase” earlier this month.

Concluding detailed discussions with his Chinese counterpart, Wang Yi, just days after the consulate was approved, Hossein Amir-Abdollahian said the implementation of the long-term partnership between China and Iran has now begun, adding that the Chinese consulate in Bandar Abbas would boost bilateral trade relations.

Highlighting a flaw in this statement, Sina Toosi, a senior research analyst at the NIA Council in Washington, told Al-Monitor: “While Iranian Foreign Minister Amir-Abdollahian said that the highly publicized 25-year partnership was moving into its implementation. phase, the deal still needs to be approved by the Iranian parliament. Its successful implementation safeguards the success of the Vienna negotiations, which China also wants to succeed and has its own concerns about the proliferation risk of Iran’s nuclear program.

Although no major BRI activity has been seen in Iran since the signing of the 25-year pact, the opening of this consulate is a significant development.

Discussing the importance of its location with Al-Monitor, a European diplomat stationed in Islamabad told Al-Monitor on condition of anonymity: “The choice of Bandar Abbas is indeed significant because it is the most important transport hub in a strategic area. Regarding the 25-year strategic partnership, this is indeed an important political message from Tehran to the West.

Highlighting Sino-Iranian ties, he said, “China has always been a strategic partner for Tehran, especially as a buyer of its crude oil and for its investments. Moreover, Beijing needs Iran to promote the BRI and its geopolitical interests, while the two countries need each other to contain US pressure in the region.

However, Washington’s economic sanctions against Tehran following the 2015 nuclear deal, officially known as the Joint Comprehensive Plan of Action (JCPOA), have made it difficult for Beijing to launch BRI-worthy projects. to be mentioned in Iran. The ongoing Vienna talks to revive the JCPOA are dragging on, and it sometimes seems like the patience of the Western lobby is running out.

On the other hand, Tehran has been insisting since November last year that the sanctions must be lifted “instantly” and without delay. For the first time since 2018, Iran has even shown itself willing to have direct talks with Washington. Amir-Abdollahian said, “If we reach a point in the negotiations where a good deal requires dialogue with the United States, we won’t ignore it.”

Still, although Beijing and Iran have a long-term strategic and economic partnership, much hinges on the JCPOA talks ending on a positive note. Apparently, Beijing could even use its influence as a strategic partner to bring Tehran to the nuclear deal to remove the sanctions hurdle.

Explaining the importance of reviving the JCPOA, Toosi said, “Iran is currently pursuing deeper relations with all major global power blocs, i.e. China, India, Russia and the United States. West (minus the United States). The keystone for Iran to realize the full benefits of this relationship is the successful restoration of the Iran nuclear deal and the relief of sanctions it entails.

If the Vienna talks fail, he warned that “secondary US sanctions will remain against Iran and that UN sanctions could also be imposed. Iranian officials talk about not tying their economic policies to the fate of nuclear negotiations, but the fact is that Iran will not be able to deepen its ties with its neighbors and world powers such as China, India and the Russia if US secondary sanctions are not lifted.”

Sanctions notwithstanding, this new consulate may bring some benefits to China.

First, it will facilitate the operations of Chinese companies working in the Chabahar Free Industrial Zone. There are plans in the future to establish joint industrial parks in Jask and Makran, so a gradual increase in the number of Chinese nationals living in Kerman, Sirjan, Rafsanjan and Bandar Abbas is expected.

Second, Beijing will have better access to important sites like Chabahar Port, Jask Port, Kish Island and Qeshm Island, all located in southern Iran.

The consulate would be helpful in building more trade ties as – despite ‘maximum pressure’ sanctions – China remained Iran’s top trading partner with the value of non-oil trade in March 2020-March 2021 at 18.715 billion of dollars. At the same time, investments are expected to grow in oil and gas, infrastructure and petrochemicals.

Third, in the long term, the port of Bandar Abbas can help Beijing complete its network of BRI projects in the region.

Mohammed-Hossein Malaek, a former Iranian envoy to Beijing, said the opening of the consulate is “a calculated decision” because China wants to lead the development of the Makran region, the coastal strip along the Iranian province of Sistan-Balochistan and from Pakistan’s Balochistan where “Beijing already has a 40-year, multi-billion dollar deal to develop the port of Gwadar.

Hypothetically, if China can develop both Gwadar and Bandar-Abbas, a “trade and energy corridor stretching from the Persian Gulf through Pakistan to western Xinjiang” could also emerge. In any case, the new consulate will be a useful acquisition for Beijing.

However, simply “heading east” may not be practical for Iran.

Debating whether it is better for Tehran to lean towards China, the European diplomat observed: “The Iranian business community is aware that Iran needs technologies in specific areas – for example, LNG. In some regions, only a few Western countries can provide the high technology needed to develop certain segments of Iran’s huge energy market. Decision-makers close to Khamenei (in most cases businessmen themselves) are well aware of this.

In his assessment, “There is no doubt that the dominant approach of the entire Iranian system remains Western-oriented. However, this approach may change, perhaps permanently, in the event that tension with the United States increases due to the breakdown of nuclear talks.

Even in Toosi’s view, “if the JCPOA is reinstated, Iran will also be in a much better position to develop balanced and competitive foreign relations with major world powers.” Iran has become more dependent on its economic relationship with China due to US sanctions. However, Iranian officials such as Ali Shamkhani, the Secretary of the Supreme National Security Council, speak of the need for Iran to ensure balanced and competitive foreign relations where Iran can derive maximum benefit.