The JCPOA is in Peril, Yet Remains China’s Best Security Option in the Gulf

Main Image Credit Vested interest: China's Xi Jinping with Iranian Supreme Leader Ali Khamenei in 2016. Image: / Wikimedia Commons / CC BY 4.0

Despite changes in the region and globally over the past decade, China’s interests are still best served by a revival of the Iranian nuclear deal.

In 2013, according to Professor John Garver – arguably the most prominent expert on Sino-Iranian relations in the West – China changed its approach to the nuclear negotiations between Iran and the five permanent members of the UN Security Council (plus Germany). Moving from being a bystander to ‘actively mediating’ between Tehran and Washington, Beijing’s shift reflected the renewed awareness that a settlement of the Iranian nuclear question would serve some relevant Chinese strategic interests.

The mediation between Iran and the US, Garver notes, responded to China’s main interest of avoiding a full-scale war that would have been detrimental to the global economic outlook. Nonetheless, a war involving Iran would have had a disruptive impact on Beijing’s energy security and the development of the Belt and Road Initiative, while exacerbating its domestic security concerns regarding terrorism and refugees. This was enough for Beijing to take a more active role, although not a leadership one.

Today, China continues to act in the Vienna Talks more like a supporting character than a leading actor. The current stalling in the talks has further confirmed that Beijing does not have the will – nor perhaps the diplomatic ability – to lead the negotiations to return to the JCPOA. The reason is quite self-evident. The Iranian nuclear issue is a second-tier priority for Beijing – even more so at a time in which more concerning events are unfolding globally. However, a diplomatic solution to the Iranian nuclear question is still the best solution to China’s economic and security interests in the Gulf. Arguably, the security benefits are even more pronounced than a decade ago.

The economic argument is the most immediate one. Despite Beijing being Tehran’s largest trading partner, the potential of Sino-Iranian economic relations is largely unexpressed, mainly suffering from the impact of sanctions and international isolation. Notably, the recently signed Sino-Iranian Comprehensive Strategic Partnership, which has a robust economic component at its core, was initially announced in 2016, in the immediate aftermath of the JCPOA implementation. Chinese investments in Iran peaked in the following two years, before declining sharply after the US withdrawal from the nuclear deal in 2018.

The disruption to regional stability that the complete collapse of the JCPOA would likely prompt risks causing a severe headache for Beijing

From the broader perspective of China’s relationship with the Gulf, Beijing’s economic and financial footprint has grown significantly in the last decade, adding layers of engagement beyond the historical backbone of energy trade. In 2020, Beijing replaced the EU as the largest trading partner of the Gulf Cooperation Council bloc, while the UAE alone hosts more than 200,000 of the 550,000 Chinese expatriates who are estimated to live in the Middle East. For China, therefore, the importance of regional stability goes hand-in-hand with the consolidation and expansion of its ties with the Gulf.

Ultimately, the potential economic benefits generated by the JCPOA are intimately related to its intertwined security functions: keeping the Iranian nuclear programme under international scrutiny, minimising the risk of proliferation, and avoiding the risk that an uncontrolled Iranian nuclear programme will lead to a military response.

The interests behind China’s decision to adopt a more active stance in the nuclear negotiations in 2013 still resonate. Energy security sits at the top, with Beijing remaining highly dependent on energy imports transiting through the Strait of Hormuz. Yet, China has been able to navigate reasonably well through the tensions that emerged in the Gulf post-2018. Nonetheless, the missile attacks on oil tankers in the Gulf of Oman and Aramco facilities in Saudi Arabia have shown that an escalation involving Iran will undoubtedly have severe direct repercussions on the top Middle Eastern energy route.

Secondly, the disruption to regional stability that the complete collapse of the JCPOA would likely prompt risks causing a severe headache for Beijing. The 2011 Libyan crisis resulted in China needing to evacuate more than 30,000 citizens, provoking a shift in Beijing’s thinking about protecting its overseas interests. Given China’s current engagement with the Gulf, an escalation in the region would have an even larger effect, placing unprecedented diplomatic and military pressure on Beijing.

The collapse of the JCPOA risks bringing Beijing’s presence in the Gulf into uncharted territory, especially given how Chinese penetration of the region has grown in the past decade

Lastly, the potential resurgence of domestic Islamist terrorism is a primary concern of Chinese authorities. Recently, Qian Feng, director of the Research Department of the National Institute of Strategic Studies at Tsinghua University, argued that ‘terrorism, which was once covered up by the great power competition and the Covid-19 pandemic, is on the verge of a resurgence’. Hence, cooperation between China and Central Asian countries and Iran could assume greater importance. On the contrary, a full-scale war involving Iran could potentially spark extremism and chaos in an area in which Afghanistan is already a source of significant concern.

Yet, a natural objection to the security value of the JCPOA would be that China has been able to secure and expand its economic relationship with the Arab kingdoms of the Gulf and Iran itself, even after Donald Trump withdrew the US from the Iran Deal. In other words, the status quo during which Chinese engagement with the Gulf blossomed was one in which the JCPOA was being dismantled. Although understandable, such an argument misses an important nuance: the agreement was damaged, but still alive, in a sense defining the parameters within which the US and Iran acted to leverage one another.

Therefore, the collapse of the JCPOA risks bringing Beijing’s presence in the Gulf into uncharted territory, especially given how Chinese penetration of the region has grown in the past decade. For this reason, the Iran Deal is still China’s best security option in the Gulf.

The views expressed in this Commentary are the author’s, and do not represent those of RUSI or any other institution.

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Jacopo Scita

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