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TEHRAN, Mar 29 2010 (IPS) - Iran continues to defy western pressure and assert its interests in the highly strategic and vital region of the Persian Gulf -which supplies 40 percent of the world’s energy resources- as well as the greater Middle East and Central Asia. Sino-Iranian relations, which have grown steadily stronger are entering a critical stage, and the West will have to address the emerging alliance between these two revisionist powers.

In recent years China stepped up its rhetoric as it wielded more political power -thanks to three decades of relentless economic growth and persistent military modernization- and openly challenged the century-old liberal international order led by the West. While China was at the forefront of calls for the restructuring of the global economic system -especially after the financial crisis- it showed little inclination to utilize its newly-gained clout for more security-oriented ends, such as reigning in Iran’s nuclear program.

Thanks to the increase in oil prices in recent years, Iran has been able to amass a whopping 100 billion dollars or so in sovereign wealth funds. The favourable oil market also enabled Iran to achieve one of the world’s highest annual GDP growth rates: over 6 percent for the last 5 years. In nominal terms, Iran is projected to be among the 25 largest economies in 2009-2010; it is currently the 17th largest economy in terms of purchasing power parity.

Unlike western countries, Beijing has been relatively uninvolved in the politics of the Middle East, but as China’s reliance on energy imports grows, there is little reason for it to remain silent on developments in the Persian Gulf. Last year saw significant developments in Iran-China relations: political ties deepened while economic transactions continued to surge. China signed energy investment deals with Iran worth more than 8 billion dollars.

If one visits Iran today, traces of the flourishing of Sino-Iranian relations are visible everywhere. Chinese contractors, engineers, and workers comprise the majority of visitors to the country, as anyone flying into Tehran’s Imam Khomeini International Airport will see.

The beginning of 2010 was even more significant for relations between the two countries. In January, Beijing sabotaged the P5+1 talks -United States, Russia, Britain, France, Germany plus China- by opposing any new sanctions and sending a low-level representative to the discussions, signalling its disagreement with any serious efforts to further isolate Iran. In the Munich conference in February, Chinese foreign minister Yang Jiechi explicitly articulated his country’s intention to block any additional sanctions against Iran and instead called for more diplomacy. A week later, the US and even Russia rebuked Iran after it announced plans to escalate its uranium enrichment process to 20 percent purity and above. China again stepped in and called for more diplomacy -meaning, it would tolerate no sanctions that could compromise its heavy investments in Iran.

The Iranian regime has not only survived US sanctions, isolation, and threats but has also managed to enhance its influence in the region. Tehran, with its vast influence and regional connections, is now arguably the main key to resolution of the region’s problems, from the civil wars unfolding in Iraq and Lebanon to the security challenge of the Persian Gulf. It is hard to imagine any of them being resolved without its cooperation if not blessing.

Iran is a vital international player beyond the Middle East, mainly because of its geostrategic position in the energy-rich Persian Gulf and Eurasia. It boasts the second largest natural gas reserves in the world and the third largest reserves of oil (second largest if Canadian reserves of unconventional oil are excluded), which make it a potential future energy superpower. To fulfil such a prospect, Iran has been actively searching for big energy companies to invest in the world’s largest gas project (South Pars).

Particularly during the past three years, China has been the major investor in Iran. Despite the sanctions already in place, trade between the countries grew by 35 percent in 2008, to USD 27 billion.

In addition, China has signed an estimated USD 120 billion worth of oil deals with Iran in the last five years to sustain the rapid growth of the world’s third-largest economy.

Iran, for its part, needs China to help vitalize its oil and natural gas industries, which have been hurt by existing economic sanctions against top companies that invest in Iran (Shell, BP, and Total).

The growing cooperation between Iran and China is not entirely opportunistic. Historically, the two countries have much in common: both have long resented western interference in their region and in their internal affairs while defending their revolutionary gains against growing pressure from both within and without.

The spectacular burgeoning of Sino-Iranian relations poses a clear challenge to the US and its superpower status in the world. The combined strength and influence of China and Iran has consistently exposed the limits of American power and the efforts to isolate Iran for defying western pressure over Tehran’s nuclear programme. While China is transforming itself into a superpower and a key player in the Asia-Pacific, Iran is becoming the major power in West Asia and the greater Middle East. It is increasingly evident that the US is still grappling with these seismic shifts in global politics and has yet to develop a coherent and comprehensive policy to manage if not contain the growing ties between these two ancient Asian powers. (END/COPYRIGHT IPS)

(*) Richard Heydarian, a graduate in political science from the University of the Philippines, writes on Middle Eastern affairs.

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