The past few years have seen a steady flow of articles, reports, and media commentary on China and the Middle East. In both popular and academic discourse, there is a growing debate about whether or when China will play a larger role in the region, and what the implications are for regional and global politics.Footnote ¹ With some exceptions, most of these discussions remain within a framework of US economic, foreign policy, and national security concerns, under the assumption that China’s overriding goal is to replicate or counter American influence. In doing so, the conversations often rely upon the narrow view from Washington and reproduce the underlying logic of US foreign policy. Read through this lens, all Chinese initiatives are either a successful or failed attempt to counter US dominance, and without reference to the Chinese and local perspective, critical details are often lost or misread. This is especially pronounced in media coverage of Sino–Iranian relations, which are often framed as a threat to American interests and global security (often conflated), or as part of a multipolar alternative to a hegemonic world order. Although the political, military, and economic implications of China’s relationship with Iran and the wider region are unquestionably important, closer attention to local sources and perspectives can provide an alternative view that both enriches our understanding and tempers our expectations of China’s role in Iran and in the wider region. This dynamic is clearly visible in the discourse surrounding the Iran–China 25-year cooperation agreement, signed on March 27, 2021.

It is hard to overstate the intense reaction that the Iran–China 25-year cooperation agreement triggered in the United States. The New York Times claimed the deal was worth an eye-watering $400 billion in investment and called it a “sweeping economic and security agreement” that was “challenging U.S. pressure” and “could deepen China’s influence in the Middle East.”Footnote ² An op-ed in the Wall Street Journal by Keith Krach, then an official in the US State Department, and Brian H. Hook, the US Special Representative for Iran at the time, cast doubt on its feasibility, but characterized it as an agreement between “totalitarian twins” that would turn Iran into a “Chinese client state.”Footnote ³ In reality, the agreement simply formalized the comprehensive strategic partnership that was first proposed by Beijing in 2016 and primarily outlined aspirations for future cooperation, with no specific contracts, concrete proposals, or financial targets.Footnote ⁴ Despite occasional acknowledgment that the deal was more aspirational than actual, it was widely expected that a substantial deepening of Sino–Iranian political, military, and economic cooperation was underway, firmly integrating Iran into the Belt and Road Initiative.Footnote ⁵

The reaction in the Iranian media was palpably different. Although government-affiliated and conservative publications initially tended to praise the deal, many Iranian commentators were skeptical when rumors first emerged in June 2020, with some comparing it to the infamous 1828 Treaty of Turkmenchay. Sadegh Zibakalam of the University of Tehran compared it instead to the 1919 Anglo–Iranian Agreement, emphasizing that at that time Iran was “politically deadlocked, socially hopeless and economically bankrupt.”Footnote ⁶ Writing for the Tehran daily Hamshahri, politician and political analyst Nozar Shafi’i urged Iranians “not to fall into China’s debt trap diplomacy out of necessity,” and noted that Chinese projects were often designed with Chinese exports in mind, not the needs of the Iranian economy.Footnote ⁷ Mehdi Hoseini, a former official overseeing oil contracts, said that the Chinese could find countless excuses in the future to delay implementation. “It is somewhat doubtful that China wants to approve, implement and even invest in a contract under the conditions of sanctions.”Footnote ⁸ Former oil minister Mohammad Gharazi also warned that Iran’s development must not come at the cost of allowing China to monopolize Iranian oil and “falling into the pits that our competitors have dug for us.”Footnote ⁹

Since then, there have been few concrete developments that could qualify as implementation. The lack of progress led the late President Raisi to travel to Beijing in 2023 in an attempt to jump-start relations, where he explicitly acknowledged that “There is a gap between what has been done and what should be done, and more steps must be taken to compensate for this delay.”Footnote ¹⁰ Undoubtedly, he also was feeling pressure from voices like the prominent reformist website Entekhab, which sarcastically asked, after multiple press conferences with nothing to show, “How many times are you going to try to sell the public on the ‘implementation’ of this plan?”Footnote ¹¹ As recently as August 2025, Ayatollah Khamenei alluded to the continued need for “full implementation” on social media.Footnote ¹²

Clearly, there is a disconnect between the expectations and apprehensions in Western media and the limitations and frustrations reflected in Iranian sources. Scholars who have seriously studied the relationship, like Lucille Greer and Esfandyar Batmanghelidj, argue that Iran is “last among equals” in China’s Middle East calculus.Footnote ¹³ This gap between expectation and reality in Sino–Iranian relations has caused the “perception of Chinese leverage in Tehran—much like the perception of Chinese power and influence in the Middle East and North Africa—[to take] a hit,” leading some scholars like Jonathan Fulton to declare China to be a “paper tiger” in the region, one there to “trade and build, not lead.”Footnote ¹⁴ The conversation has largely remained within a US economic–foreign policy–national security framework, and the instinct has been to explain this as a weakness of Chinese diplomatic, economic, or military capacity, thereby reaffirming the centrality of American influence in the region: implicitly, the state that is there to lead, not just trade and build. The effect is a kind of feedback loop: anxiety about a rising China means even minor developments trigger unrealistic expectations, which are inevitably shattered by reality. This in turn fuels the narrative that China is more bark than bite, and assuages fears about the collapse of US hegemony or the “rules-based” international order––until the next development comes along, and the cycle repeats. This narrow framing does little to explain how such unrealistic expectations become embedded to begin with. To understand this process, it is necessary to move beyond the assumptions of the economic–foreign policy–national security framework. This can be done by de-centering the United States and its short-term concerns, applying a historical lens, and shifting the focus to local (that is, Iranian and Chinese) perspectives.

It was exactly this sensitivity to local sources and historical context that was missing from the Western media’s reaction to the 25-year agreement.Footnote ¹⁵ Throughout the 1980s and 1990s, Sino–Iranian relations remained limited even as China expanded its role in the Middle East as an economic power and small arms supplier. Beijing sold weapons to both sides in the Iran–Iraq War, although its contributions were vastly outstripped by the United States and Russia, which did the same.Footnote ¹⁶ When the war ended in 1988, Chinese companies played an essential role in reconstructing the Iranian economy, and won acclaim for successful projects like the Tehran Metro.Footnote ¹⁷ By the early 2000s, China had also become a net oil importer, although Iranian oil only accounted for 10 percent of its overall imports. Bilateral trade increased steadily, from just over $1 billion annually in the 1980s to nearly $3 billion by the early 2000s, peaking at $51.8 billion in 2014.Footnote ¹⁸ But despite this economic activity, Chinese investment in Iran remained low, primarily due to the impact of US sanctions. Xi Jinping first proposed what would become the 25-year agreement in 2016, only after the JCPOA was signed and sanctions relief on the horizon, and Chinese support for the JCPOA has been clear and consistent.Footnote ¹⁹ Following the collapse of the deal in 2018, trade took a substantial hit, dipping below $10 billion in 2019, before recovering somewhat in recent years.

The agreement was intended to address these issues, but little real progress has been made. Although China is an important trading partner to Iran, Chinese investment remains low, amounting to a paltry $185 million in 2023.Footnote ²⁰ Bilateral trade has seen a moderate increase to around $25.3 billion, but is still only half of its 2014 peak of $51.8 billion. During the same period, China invested more than $25 billion in neighboring Saudi Arabia, and trade with the states of the Gulf Cooperation Council (GCC) surged to $516 billion. A new consulate in Bandar Abbas and Iran’s accession to full membership in the Shanghai Cooperation Organization (SCO) have done little to stimulate investment or trade. Investment continues to be measured in the low millions, and although trade, especially oil, has been increasing, the deficit remains firmly in China’s favor. The most significant agreement signed since was for a $2 billion investment in Imam Khomeini airport, but this is closer to foreign aid than investment, and the project is years from materialization and has yet to break ground.Footnote ²¹

Notably missing are any major investments in the oil and gas industry, in part because of the failure of previous attempts at large-scale Chinese oil investment agreements. For example, China National Petroleum Corporation (CNPC) and the National Iranian Oil Company (NIOC) reached a $4.7 billion agreement in 2009 for CNPC to develop phase 11 of the South Pars gas field, but were repeatedly chastised by Iran for slow progress. Shortly after the United States ended its participation in the JCPOA in 2018, CNPC pulled out of the project completely. Despite sporadic reports that negotiations with China were ongoing, Iran completed phase 11 of the project independently with local companies in August 2023. A similar story played out in Yadavaran oil field between NIOC and China Petroleum and Chemical Corporation (Sinopec), which signed on in 2004 and exited in 2023, leading Hamid Hosseini, head of Iran’s Oil, Gas, and Petrolchemical Exporters Union, to remark that “Chinese companies which are state-owned, with extensive experience operating abroad, have not been working with Iran because of sanctions. Our cooperation is limited to small Chinese refineries and the Chinese private sector.”Footnote ²²

The lack of transparency in the negotiation process formed the basis for further criticism by the Iranian government. Where Western analysts were more likely to see a vague road map or strategic ambiguity, Iranians saw an attempt to obfuscate objectionable or illegal provisions. The most visible expression of this came from former president Mahmoud Ahmadinejad, who made headlines when he warned it was being “concluded secretly with foreign parties” and may be contrary to Iranian interests, echoing public concerns that the terms of the deal were not being officially published.Footnote ²³ The criticism of such a high-ranking former politician clearly touched a nerve, as several government officials made statements directly refuting his claims.Footnote ²⁴ Journalist Hamid Mohammadian called for the immediate publication of the contents of the agreement for public criticism, and expressed skepticism about China’s intent: “Neither China nor Russia have the least cultural, racial, historical, religious, [or] political commonalities with us, and therefore any kind of relationship they have with us is a function of their long-term and short-term interests. If we think otherwise, we have gone astray.”Footnote ²⁵

The opaque process and lack of trust fueled rampant rumors and speculation, especially on Iranian social media. These ranged from xenophobic “yellow panic” claims that Chinese workers would flood the streets of Tehran, to more specific claims that Iran would transfer territory to China or host Chinese troops, or that Chinese nuclear waste would be buried in the Iranian desert. These claims were amplified by media coverage in the West. Krach and Hook used the claims as evidence that the 25-year agreement would place Iran in a subservient position to China: “Speculation is swirling that the deal includes oil concessions to Chinese companies, basing rights for China’s military, and long-term leases of Iranian islands—all entirely believable given China’s long history of predatory, neo-imperial deals.”Footnote ²⁶ Another article in the energy industry publication Petroleum Economist claimed on the basis of anonymous sources that “5,000 Chinese security personnel” were to be sent to Iran to protect Chinese investments, and the island of Kish would be sold or leased to China. These claims are extremely dubious given the political sensitivities of Iran and the priorities of the Chinese state, which would undoubtedly be harmed by the backlash that such a step could cause. Unsurprisingly, no evidence for them has ever surfaced.

There is equally little evidence for the massive $400 billion figure, one of the most prominent and widely repeated details of the agreement. Jacopo Scita demonstrated early on that the dubious figure was originally proposed by the same thinly sourced Petroleum Economist article.Footnote ²⁷ The article, which has since been taken offline and is inaccessible, was written by Simon Watkins, a financial journalist and Forex trader, who presented the information as one that could cause “seismic shift in the global hydrocarbons sector.” However, the figure was implausible in the extreme, representing roughly 60 percent of China’s planned budget for Belt and Road Initiative investment for the entire world during that same period. The $400 billion figure cannot be found in any of the announcements or leaked drafts of the agreement that have since emerged, nor can any other specific numerical figures or financial commitments. Despite this, the mythical number has become fixed in the public imagination and remains widely referenced to this day without a shred of evidence, a cautionary tale, and a testament to how Sino–Iranian relations are often misread, distorted, exaggerated, and completely removed from local context.

The 25-year Iran–China strategic cooperation agreement is just one example of many; any major development in Sino–Iranian relations can trigger a similar discourse in the American media. Beijing made headlines in March 2023 when it unexpectedly announced it had mediated a long-stalled normalization agreement between Iran and Saudi Arabia, which would be signed in Beijing.Footnote ²⁸ The agreement was a striking diplomatic victory for China, but was driven more by local dynamics than Chinese global strategy. Jesse Marks has described how Beijing played the role of “facilitator,” supporting regional initiatives with “pre-established consensus that both parties wanted progress” that “required minimal effort from Chinese officials,” as well as minimal coercion and minimal risks to China’s credibility as a neutral actor.Footnote ²⁹ Still, the New York Times wrote that the deal was “among the topsiest and turviest of developments anyone could have imagined… . Alliances and rivalries that have governed diplomacy for generations have, for the moment at least, been upended,” while “leaving the US on the sidelines.” An op-ed in Foreign Policy argued that it emboldened the “ideological troika” of Iran, Russia, and China in their “attacks against Western interests worldwide.”Footnote ³⁰ To this troika, US politicians and commentators have now added North Korea, dubbing the group the “new axis of evil” without a shred of irony or self-awareness.Footnote ³¹

But, as this brief snapshot of Sino–Iranian relations has demonstrated, the relations are a far cry from how they are depicted in mainstream US foreign policy and media narratives. China can hardly be said to be forming any kind of axis with Iran, but neither can it be said that it is a paper tiger with more bark than bite. Rather, its relationship with Iran is more contentious, conservative, and ad hoc than US foreign policy discourse or enthusiastic Sino–Iranian joint diplomatic statements might suggest. Chinese officials and companies have little incentive to include Iran as part of their regional strategy, due to the high risk of instability (internal or external), the relative attractiveness of neighboring Gulf states, and above all, the threat of US sanctions. For these reasons, investment has remained limited, and the investments that have been made have either failed to materialize or have been more geared toward China’s needs than Iranian priorities. This has led to a measure of public discontent with the Iranian government’s emphasis on relations with China, especially in recent years, and a persistent perception that China is a fair-weather friend and unreliable partner. Iranian officials are therefore forced to play a delicate balancing act between their need for Chinese support and public frustration at their failure to attract it at the desired levels.

The contrast between Iran’s failure and the GCC’s success in attracting Chinese investment is indicative of a larger point: that ultimately, what determines whether a country is firmly integrated into the Belt and Road Initiative is not whether they are ideologically aligned with China or to what extent they are willing to embrace an alternative, multipolar world order, but rather the degree to which their economies are already integrated into the existing global order and trade networks; in other words, it depends on the continuation of the world economic order, albeit with a larger slice carved out for China.Footnote ³² For all the discussion of a multipolar alternative to American hegemony, the order that China is offering in Iran is not a radical departure from the global system as maintained by the United States. From this perspective, it is obvious that Iran, due to its isolation and weaker financial, technological, and legal institutions compared to its competitors, is far from the ideal Chinese partner in the region, and in many ways may be a liability.

China’s response to the post–October 7th conflict between Iran and Israel exemplifies this dynamic. After an initially cautious response to the violence, China has been unequivocal in its diplomatic support for the Palestinians. Although it has condemned the attacks on civilians carried out by both sides, it refrained from openly condemning Hamas and considers the root cause of the violence to be the unfulfilled aspirations for a two-state solution. It was equally clear in its condemnation of Israeli strikes on Iranian officials in Syria and Hamas official Ismail Haniyeh in Tehran in 2024, which it considered an aggressive escalation of the conflict, and supported Iran’s right to “defend its sovereignty, security, and national dignity.”Footnote ³³ It condemned the American and Israeli strikes on Iran in 2025 as well, calling them a “serious violation” of the norms of international relations and a “dangerous precedent … with potentially catastrophic consequences.”Footnote ³⁴ But despite these forceful statements, China was on the sidelines during the Twelve-Day War in 2025, with little ability to influence the situation. It presented itself primarily as a supporter of international law and called for greater coordination with the United Nations to bring an end to the conflict through diplomatic statements, in contrast to the West, which uses more forceful and aggressive means. The only direct action it took was the evacuation of around 3,125 Chinese citizens.

Although it was not surprising that China was not willing to involve itself militarily, the incident highlights the limitations of China’s relationship with Iran, both in capability and political will. Although Iranians have little choice but to turn to China, which purchases 90 percent of Iranian oil, due to its economic and political isolation, China’s options are not so limited. Although Iran may desire greater investment, the barriers have so far remained too large to bridge the gap between Iran’s needs and China’s appetite for risk. Cultivating Iran as a political ally through a modest amount of investment is worthwhile, and trade comes at a low cost, but anything more will likely remain off the table for the foreseeable future. The full evacuation of all Chinese nationals from the country, the persistence of sanctions despite decades of negotiations, and the repeated hostilities between Iran and Israel can only have deepened the perception of Chinese businessmen and political leaders that investment in Iran can carry serious financial and political risks.

Iranians are aware of these challenges, but their voices, arguments, and perceptions are rarely part of the conversation. Within the US economic–foreign policy–national security framework, these perspectives and priorities are often rendered invisible or play only a minor role in explaining regional dynamics. In reality, such perspectives are critical to understanding international relations and their connections to local and regional dynamics, and provide a good antidote to the hyperbole and hysteria that typically characterize popular discourse on Sino–Iranian relations.