by Mrs. Jun Qiao and Mr. Mingxuan Huang•Published on February 19, 2024

Photo’s Source: https://www.ankasam.org/energy-the-main-basis-of-china-iraq-relations/?lang=en; Chinese and Iraqi flags

Introduction

China and Iraq have close economic and trade cooperation. China is Iraq’s largest trading partner, and Iraq is China’s third largest trading partner among Arab countries. The fourth round of political consultations between Chinese and Iraqi foreign ministries was held on January 24, 2024. The meeting emphasizes that China is ready to strengthen the alignment between the Belt and Road Initiative and Iraq’s Route of Development, and Iraq is ready to be a good partner of China in Belt and Road cooperation and looks forward to deepening cooperation with China in various fields.

This article examines the evolving relationship between China and Iraq, tracing its historical roots and the political, economic, and humanitarian cooperation that characterizes their contemporary engagement. It begins with a historical overview of Sino-Iraqi ties, followed by an assessment of China’s investments and collaborations in Iraq in recent years. Then, it discusses Chinese humanitarian assistance provided during the Iraqi conflict, and concludes with an outlook on the future cooperation under the Belt and Road Initiative.

Historical Context

The diplomatic relations between the People’s Republic of China and the Republic of Iraq commenced in the 1950s, following the establishment of the Iraqi Republic in 1958. Both countries, geopolitically significant in their respective regions, developed a close alliance based on mutual support to external pressures. Thus, China provided political backing to Iraq’s struggle against aggression, while Iraq became a key ally in the Middle East for China’s rising global influence.

Political and Economic Cooperation

The current relationship between China and Iraq mainly centers on Iraq’s post-war reconstruction. In 2018, with the formation of a new Iraq government, Iraq resumed its reconstruction efforts that had been underway since 2003.

Therefore, in recent years, China and Iraq have deepened their political and economic cooperation. The Friendship and Cooperation Treaty signed in 2010 serves as a legal framework for the broadening relationship. The treaty outlines cooperation in various domains, including politics, economy, culture, and technology, and includes provisions for economic and technical assistance.

Unlike the complex relationship between Western countries and Iraq, Iraq and China had maintained a purely economic cooperative relationship with Iraq over the past 15 years, and China even forgave 80% of Iraq’s debt to China in 2010, which had led to a high degree of mutual trust between the Iraqi government and the Chinese government. In this economic context, in 2019 Iraq signed an oil-for-reconstruction agreement with China and applied for membership in the Asian Infrastructure Investment Bank in the same year, as well as in 2021 for membership in the Shanghai Cooperation Organization. Since the reconstruction of Iraq, the two sides have not only increased the number of cooperation projects, but also gradually expanded them through investments ranging from the oil sector to other areas, including electricity and transportation.

Overall, politically, China has consistently supported Iraq’s independence, sovereignty, and territorial integrity, opposing any form of external interference. China advocates for the resolution of Iraqi political differences through political means. Since China has become one of the largest investors in Iraq, Chinese enterprises actively participate in the reconstruction of the country. China has also provided substantial aid to Iraq for improving living conditions, rebuilding infrastructure, and capacity building.

Humanitarian Assistance

During the Iraqi conflict, the Chinese government and people extended significant humanitarian assistance to Iraq. The Chinese Red Cross provided emergency aid, including medical supplies, food, and tents, to assist Iraqi refugees. Additionally, China sent medical teams to Iraq to offer medical services to the Iraqi population.

Cooperation between China and Iraq under the Framework of the Belt and Road Initiative

Iraq is geographically an important node of the Silk Road Economic Belt and the 21st-Century Maritime Silk Road, and it is also one of the first Arab countries to join the Belt and Road Initiative, under which a large number of cooperation projects between China and Iraq have been carried out. In 2015 Iraqi Prime Minister al-Abadi was invited to visit China, establishing a strategic partnership with China and joining the Belt and Road Initiative. The cooperation between the two sides reflects the complementary nature of two sides’ economic sectors. On the one hand, the Iraqi economy is highly dependent on oil exports, oil revenues account for 85% of the Iraq government ‘s budget from 2015 to 2022 (World Bank, 2022), and willing to trade oil resources for infrastructure development; on the other hand, due to China’s high external dependence on crude oil and the fact that Iraq’s share of China’s crude oil imports is at around 10% from 2015 to 2018 ranked second or third among China’s crude oil importers (GACC), it needs to further cooperate with Iraq to maintaining a stable supply of oil.

After joining the Belt and Road Initiative in 2015, essentially the formation of the new government in 2018, China’s cooperation projects with Iraq began to increase rapidly and expand to other areas beyond crude oil trade and development. In 2019, the proportion of Chinese investment in Iraq soared to $887.09 million from $7.73 million in 2018 and remained at $324.76 million in 2022 (MOFCOM, 2023). The skyrocketed investment means that various types of Chinese companies have flooded into the Iraqi domestic market and have reached project contracts with the Iraqi government in other important fields except for oil production infrastructure. Taking the construction of electricity generation facilities for example, the grid connection of the Rumaila combined-cycle 730MW power plant constructed by the Power Construction Corporation of China was completed in 2021, while Chinese-built power plants have accounted for half of the country’s electricity supply until then (XinHua News, 2019).

Further Development of Relationship between China and Iraq

Considering that the relationship between China and the Iraq is mainly based on purely economic cooperation, the number of economic cooperation projects and the benefits they generate will affect the relationship between the two countries. Firstly, the instability within the Iraqi government still affects the confidence of Chinese enterprises to enter the Iraqi market, but with the geopolitical rapprochement between Saudi Arabia and Iran and the reduction of terrorist activities in the country from year to year, it can be expected that Chinese enterprises may further enter the Iraq market. Also, in the energy sector, Iraq has become a significant oil supplier to China. The future holds the potential for deeper collaboration in oil exploration, development, and processing. Iraq also hopes that Chinese companies will provide more investment and support in the fields of infrastructure construction, electricity, and transportation.

Still, with the advancement of the Belt and Road Initiative (BRI), the cooperative landscape between China and Iraq holds immense potential. As a BRI participating country, Iraq is eager to leverage Chinese capital, technology, and market advantages to expedite its national reconstruction and development.

Secondly, China’s infrastructure projects in areas other than industry have been carried out one after another, such as the Iraqi government’s clear intention to complete proposal to build 1,000 schools that China built with aid by the end of 2024 (INA, 2024), which may further expand the scope of economic cooperation between the two countries.

Nonetheless, in the realm of people-to-people exchanges, both countries have established cooperation in education, culture, and tourism. The future will see continued enhancement of personnel exchanges and deeper mutual understanding.

Finally, the spillover effect of the Middle East conflict has already had an impact on Iraq, and the common stand of China and Iraq to make peace as soon as possible will also further strengthen mutual trust between China and Iraq.

Conclusion

Around the reconstruction of Iraq, the two sides have established a good cooperative relationship through the complementarity of their respective economic sectors. And under the framework of the Belt and Road initiative, China’s investment in Iraq has gradually broadened from the oil sector to other fields and played a key role in Iraq’s reconstruction work. In these circumstances, the two countries have expanded their collaboration across various domains, yielding significant achievements. For the time being, with the gradual stabilization of Iraq, the expansion of China’s investment fields, and China’s and Iraq’s stance on pursuing peace in the current international events, there is still a lot of room for improvement in the bilateral relations between China and Iraq. However, the future of Sino-Iraqi relations is promising, with the potential for further deepening of political, economic, and cultural cooperation.

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