The Mullahs and the Dragon

As Israel and Hamas slug it out in Gaza, the Biden administration is trying to deploy enough naval muscle to intimidate the Islamic Republic of Iran and its allies. It has been, however, reluctant to use this power. Iranian-backed militias in Syria and Iraq have bombarded U.S. forces in Syria nearly nonstop, but the White House has struck back with limited air raids, signaling its belief that escalating against Tehran’s proxies, let alone the clerical regime itself, would be counterproductive. Fear of a larger regional conflict, which could easily bring the United States into direct confrontation with Iran, may be deterring Washington more than the U.S. Navy is deterring Tehran. The White House and the Europeans who matter — the French, the Brits, and the Germans — also haven’t wanted to highlight Iran’s pivotal role in provoking this fight: Without Iranian-supplied cash and weaponry, the October 7 assault on the Jewish state might have been a lot smaller, or it might not have happened.

It’s an excellent guess that the Islamic Republic got bolder because it had acquired great-power patrons. With the Israel–Gaza War intensifying, Americans may lose focus on how Tehran is reshaping power politics in the Middle East through its alliances with Moscow and, perhaps more important, Beijing. Great-power patronage for the Islamic Republic is new — most in the U.S. foreign-policy community didn’t see it coming. Moscow’s partnership with Tehran is now explicit, and centered on arms sales and mutual loathing of the United States. Iranian relations with China are more complicated but commercially of far greater consequence. Already, China has greatly undermined the efficacy of U.S. sanctions against the clerical regime, and the partnership has helped to make Iran the dominant power in the Middle East.

To anticipate how these two revisionist states might intersect in the future, though, one must understand the history of Chinese–Iranian interplay. 

Communism aside, Iran’s triumphant revolutionaries should have found kindred spirits in China. Two ancient nations with long-standing grievances against the West had managed to achieve their independence from Western-supported governments after tumultuous upheaval. But Communist China had forged close ties with the Iranian monarchy. In August 1978, China’s leader, Hua Guofeng, even visited Tehran and expressed solidarity with the beleaguered shah, Mohammad Reza Pahlavi. Ruhollah Khomeini was not one to overlook such slights and denounced Beijing in terms usually reserved for the West: “Our youth must know that China and Russia, like the U.S. and Britain, feed on the blood of our people.” For the ayatollah, this was proof that “neither East nor West” was the only doctrine for the Islamic Republic, a revolutionary state aiming to forge a path as neither client nor ally of any great power.

No nation conducted shrewder diplomacy with the Islamic Republic than China, despite its former support for the shah’s regime. Hua privately expressed remorse for his ill-timed journey: “I apologize to Imam Khomeini for my visit to Iran during the regime of the deposed shah and I support the Islamic Republic of Iran,” declared the humbled Communist. Henceforth, Beijing’s Iran pronouncements highlighted anti-imperialism, third-world solidarity, and respect for Persian accomplishments. China needed allies in critical regions such as the Middle East. Iran’s vast oil reserves attracted Beijing’s attention. But as China started looking to America for commerce and investment, its dalliance with the Islamic Republic waned. Revolutionary Iran was too much a pariah state for a China eager to shed its militant, anti-Western legacy.

Hua’s apology may have done little to assuage Khomeini upon his hearing of it from the Pakistanis in 1979, but his younger disciples, future supreme leader Ali Khamenei and future president Akbar Hashemi Rafsanjani, were attracted to the Middle Kingdom. Mao’s China had managed to advance, in defiance of both the United States and the Soviet Union. Rafsanjani, in particular, was fascinated by the so-called post-Mao China model, by which an autocracy through state capitalism created economic prosperity on a scale that seemed a dreamscape for Iranian revolutionaries. Whether seen as a defiant state challenging Western hegemony or a dictatorship that had discovered the secrets of economic growth, China held a special place in the young clerics’ political imagination.

In the 1980s, Beijing continued to balance its contradictory ambitions. During the takeover of the U.S. Embassy in Tehran, it prodded the revolutionaries to accept the principle of diplomatic immunity but acknowledged their grievances against America. Beijing abstained from many critical U.N. votes that concerned Iran’s interests, displeasing both Washington and Tehran.

Iraq’s invasion of Iran put China in another quandary. As part of its economic-modernization plan, Beijing had opened important trade relations with the Sunni Arab bloc, which aligned with Saddam Hussein. These emerging ties precluded an alliance with the Islamic Republic. Yet Beijing feared that an isolated Iran would turn to the Soviet Union and further enhance the power of its rival. So China split the difference: It called for an end to the war while selling arms to both sides. Through barter arrangements that involved an exchange of oil for weapons, Iran obtained much-needed aircraft, missiles, and tanks. For the sake of appearances, Beijing sometimes used North Korea as the conduit for these purchases. During the war and well into the 1990s, Iran may have secured upward of 70 percent of its arms from China and North Korea, according to figures from the Middle East Economic Digest.

In the mind of Khomeini, the aging philosopher king, regime survival depended on internal resources and the export of its revolution abroad. The ayatollah and his first (and last) deputy supreme leader, Hossein-Ali Montazeri, were both Islamic Trotskyites who saw the expansion of the revolution as integral to its success. Upon Khomeini’s death in 1989, his cagey successors were committed to preserving their ideological inheritance, but they saw the enormous war damage and the need to revive the economy and rebuild shattered military forces. To accomplish those goals, they had to reconsider their relationship with China, as they had no desire to reconcile with the “Great Satan” or give up their ambition to destroy Israel.

The end of the Cold War was bound to bring the Islamic Republic and China closer together. The quick collapse of the Soviet Union and its Eastern European satraps unsettled both nations. They feared that democratization would prove contagious. And then came Saddam Hussein’s impetuous invasion of Kuwait and quick expulsion therefrom by the United States. Neither Tehran nor Beijing expected America to succeed so fast. Both were shocked by its technological edge. Suddenly, America’s unipolar moment had arrived, and the global triumph of liberalism seemed sure to follow.

In June 1989, it appeared that China itself might succumb to people power. Hundreds of thousands of students demanding greater freedom gathered in Tiananmen Square and elsewhere throughout the country. The demonstrations were not confined to Beijing and had the support of elements of the working class and the peasantry. China’s leadership was initially divided, and its army hesitated to harm the protesters. Deng Xiaoping finally ordered a crackdown, to which the West responded with criticisms and sanctions. China suddenly needed friends. It found them in the Global South.

Despite Khamenei’s ascendance to the post of supreme leader, Rafsanjani was initially the man in charge. Neither leader was prepared to dispense with terrorism as an instrument of state or to call off plans to murder Iranian dissidents abroad. This limited Iran’s ability to secure Western investment at a time when it needed to revive its economy. Iran proved its reliability to Beijing by endorsing the Tiananmen massacre. But Rafsanjani wanted not just commercial ties but a strategic partnership. “China is one of the few countries in the world that can be a good friend to those in third world countries who are keen on independence,” he professed.

The Islamic Republic had to pay a price for its ties to China, and China’s sizeable Muslim population offered tantalizing opportunities. Initially, several religious foundations in Iran offered to finance mosque construction in China, but Beijing made clear that even limited forays in this area would jeopardize bilateral relations. As with the Chechen Muslims slaughtered by Russia, Iran studiously ignored the plight of Muslims in China. In a 1989 visit to the country, Khamenei even claimed that “the Muslims of China are satisfied with the policies of the Chinese government with regard to Muslims and the freedom of their faith.”

Iranian delegations now journeyed to China and purchased all sorts of items, including arms. Even more ominous were agreements on transferring nuclear technologies and China’s pledge to construct several atomic reactors in the Islamic Republic.

But Washington and Beijing were not prepared to give up on each other. Too many state visits to America and too many lucrative deals were at stake. Bill Clinton, who had long since jettisoned his campaign rhetoric about the butchers of Beijing, was eager to integrate China into the global economy. His administration granted China membership in the World Trade Organization and, more important, gave it “most favored nation” trading status in the U.S. market. At Clinton’s urging, China suspended nuclear cooperation with Iran and stopped its sale of advanced anti-ship cruise missiles. Beijing now kept Tehran at a distance. Military exchanges between the two sides became covert and limited.

In 2002, a dissident Iranian organization revealed that the Islamic Republic’s nuclear infrastructure was far greater than previously thought. The program was approaching the point of self-reliance, after which traditional counter-proliferation measures such as more-rigorous export controls would not measurably slow it down. In the aftermath of 9/11, the Bush White House was particularly alarmed about the likely proliferation of dangerous technologies in rogue states. But, overwhelmed with Iraq, the administration eventually turned Iran’s nuclear file over to the United Nations and the Western Europeans, who were scared that the “Texas cowboy” might bomb another country.

Iran’s clerical leaders, too, were frightened. America had toppled Hussein in three weeks — something that the Islamic Republic’s military men had assured them wouldn’t happen for months. The regime was also troubled by the country’s struggling economy, which was about to be hit with more sanctions. The mullahs needed help and turned back to China. Hassan Rouhani, then the chief nuclear negotiator with the Europeans and later the president of Iran, journeyed to Beijing to ask for protection. China’s foreign minister, Li Zhaoxing, disappointed him. “Don’t anticipate that we will stand against” Americans, he told the cleric. China voted for all the U.N. resolutions that helped tighten the economic noose around the Islamic Republic’s neck.

And then came Xi Jinping.

Xi’s China is not interested in even pretending to be a responsible stakeholder. China is now prepared to forfeit financial dividends for its nationalist ambitions, which, in their cultish crudeness and aggressive boldness, echo the rising fascists of the 1930s. Beijing is no longer coy about unifying Taiwan with the mainland by force or asserting its power in the South China Sea. Its costly Belt and Road Initiative is meant to knit together an expansive trade zone in Eurasia under Chinese guidance. And Beijing has become the destination of choice for a gallery of rogue states. The Islamic Republic may have found a great-power patron of greater utility than Vladimir Putin’s Russia.

The rise of Xi followed the decline of American hegemony. The aging men of the Politburo had once feared that the end of the Cold War would cause Washington to focus on its rival in East Asia. But the Middle East had intruded. After 9/11, the United States became bogged down, spiritually more than militarily, in Iraq and Afghanistan. Neither the Bush nor the Obama administration ever confronted Iran’s clerical regime over its lethal anti-American actions in either theater. In Iraq, Iranian support and guidance to Shiite militias sapped American willpower.

The mullahs had once more slipped the noose. In 2015, their nuclear perseverance and obstinacy even compelled Barack Obama to sign an agreement accepting Iran’s status as a nuclear-threshold state, i.e., a state that can assemble a weapon in short order. The Islamic Republic had finally become a worthy partner for a China eager to flex.

Then in 2016, in a show of deference to the prickly Persians, Xi went to Tehran to cement the alliance. Both Xi and Khamenei took turns denouncing the West and trumpeting their new partnership. The cleric intoned, “Iran is the most reliable country in the region for energy since its energy policies will never be affected by foreigners.” In response, Xi stressed, “We decided to turn our mutual relations into… strategic relations.” Even after Donald Trump jettisoned Obama’s nuclear deal and piled on sanctions, the trade between China and Iran was largely unaffected, as China had no intention of adhering to America’s prohibitions.

“Turning east” is the new buzz phrase in Iran’s corridors of power. In 2020, the Islamic Republic announced that it had signed a 25-year agreement with China. The agreement essentially reduced Iran to a vassal state. China wouldn’t just receive oil at discount rates but would penetrate all aspects of Iran’s economy: petrochemicals, infrastructure, telecommunications, and the banking sector. A regime born in a revolution that promised autonomy and dignity had become a junior partner to a rising superpower, selling its resources on the cheap.

Great-power patronage is not without its rewards. Iran has an easier path to the bomb now that trade with China shelters its economy from sanctions, while Russia is a generous provider of military hardware and, quite likely, nuclear technologies (if Iranian physicists and nuclear engineers even need the help). The notion that Khamenei will concede his nuclear assets for sanctions relief has no audience in Iran today. Even the Biden administration has seemingly learned this lesson. Under the guise of releasing dual nationals from captivity, it was silling to transfer $6 billion to the mullahs (the White House has apparently refrozen these funds because of October 7). The hostages are accidental to an arrangement whose essential purpose is to entice Tehran not to test a nuclear device during a presidential-election year. The problem with bribery, of course, is that one must keep paying.

Nor can Americans comfort themselves with the notion that, no matter what differences we have with China, Beijing wouldn’t wish to see an Iranian bomb that could further destabilize the Middle East. Xi had no problem with Russia’s invasion of Ukraine, which risked unsettling Europe, China’s main trading partner. An Iranian bomb could even expedite America’s exit from a region that its political class still bemoans as the land of “forever wars.”

The Islamic Republic does have to accommodate China’s sensibilities. It is inconceivable that Iran would attack Saudi oil facilities today as it did in 2019, since this could cause a spike in petroleum prices and damage China’s economy. Indeed, the Iranian–Saudi normalization agreement that was crafted through Chinese mediation holds little for the clerical oligarchs. Beijing can showcase its ability to mediate thorny disputes in a critical region. The impetuous Saudi leader, Crown Prince Mohammed bin Salman, gets a path out of the treasury-bleeding Yemen war that he instigated and a check on bad Iranian behavior that could demolish his grandiose visions.

The mullahs come out of this arrangement, however, largely empty-handed. Khamenei had blamed Riyadh, among others, for the women/life/freedom movement that aimed to topple his regime last year. He’d promised retaliation for Saudi misconduct. He’s certainly gotten some satisfaction from the Hamas onslaught against Israel, which has derailed, and may have wrecked, Saudi–Israeli–American diplomacy to normalize relations between Riyadh and Jerusalem.

An atomic bomb is the theocracy’s trump card. Once in possession of the ultimate weapon, Iran can renegotiate the terms of its compact with China on a more equal footing. It can be less sensitive to China’s mandates and even more assertive in projecting its power. It can rekindle its animosity with Saudi Arabia. (The Iranian-allied Houthis in Yemen, who truly loathe the Saudis, will likely be thrilled to start shooting missiles again.) A bomb may allow Tehran to extract its own tribute from its weaker neighbors — the United Arab Emirates often already bends over backward — and menace Israel with greater impunity. But for now, Khamenei seems to have learned an important lesson from Deng, who told subordinates that a rising power should conceal its intentions while building up its capabilities.

Washington ought to look at October 7 as an example of how easily Iran can change Middle Eastern conversations and expectations. It wasn’t just another eruption of the Palestinian–Israeli imbroglio. If the Biden administration chooses to think small, as so far it has, it will be likely to run a dispiriting, ever-weakening defense that can only undermine American resolve to play the great game in the Middle East. Before October 7, most in Washington’s foreign-policy establishment wanted to retrench in the region, seeing it as far less consequential than Europe or Asia. They may still want to. Beijing and Tehran, along with Moscow, have other plans.

Mr. Gerecht, a former Iranian-targets officer in the Central Intelligence Agency, is a resident scholar at the Foundation for Defense of Democracies. Mr. Takeyh is a senior fellow at the Council on Foreign Relations.