The Optimal Model of Iran-China Interactions with an Emphasis on China's Political Structure

China's rapid economic progress in the current century has been recognized as one of the most significant global developments. The role of policy and economic policymaking in China was crucial for understanding the drivers of this progress. The main question of this study was how optimal economic relations between Iran and China can be formed, considering China's political structure and economic policies. The hypothesis of this paper emphasizes the necessity of involving Iran's governmental institutions in economic interactions with China to establish optimal relations. The findings highlighted the centralized, stable, and long-term vision of Chinese state-owned enterprises, alongside the elite-driven decision-making approach of the ruling party. Consequently, the involvement of centralized, stable, and long-term-oriented governmental institutions was proposed as a strategy for fostering optimal interactions between the two countries. In addition to the individual authority of party members based on their rank, the Central Committee of China, as the country's intellectual and elite institution, and the permanent members of the Politburo play the most significant roles in Iran-China interactions. The core idea of economic engagement with China lies in the alignment and similarity of the behavior of Iranian economic institutions, which, if realized, could leverage the "hunter" game model in bilateral interactions.

Introduction

The establishment of peaceful and stable relations between countries has been a critical concern for political elites since the concept of the state emerged. In recent years, particularly after the world wars and the rise of new values and norms, the importance of peace and security has intensified, with economic goals serving as a primary driver for addressing domestic challenges. For Iran, especially following the U.S. withdrawal from the JCPOA, relations with neighboring and Eastern countries have gained heightened significance in foreign policy. Even with a new U.S. administration, the return to JCPOA-era dynamics remains uncertain. Iran has pursued a "Look East" policy, exemplified by membership in the Eurasian Union and the 25-year cooperation agreement with China. The recent unveiling of this agreement underscores the need to understand interactions with China, identifying opportunities and challenges. Both Iran and China are among the few nations pursuing independent policies free from U.S. interference, manifesting in political and economic dimensions, prompting U.S. policy revisions such as severe sanctions on Iran and economic warfare against China.
     This article first reviews the research background on Iran-China relations and the impact of China's political structure. It then describes the research method and theoretical framework based on game theory and the "hunter" model. Subsequently, it analyzes China's political structure and power distribution, examining key institutions like the Central Committee, Politburo, and General Secretary of the Communist Party. The next section discusses the involvement of Iranian governmental companies in interactions with China, presenting findings emphasizing the role of Chinese state-owned enterprises and the need for long-term-oriented Iranian institutions. Finally, conclusions and recommendations focus on the optimal model for Iran-China economic and political interactions using the "hunter" game model.

Theoretical Framework

To analyze Iran-China relations and optimize interactions, examining perspectives from other countries, particularly the U.S. as a key international actor, is essential. In July 2010, a U.S. military-affiliated think tank held a roundtable on China-Iran relations, concluding that agreements remain superficial with limited intent for deepening. However, the authors argue Iran can emulate China's successful global trade experiences to foster deeper, sustainable cooperation. The "hunter game" model from game theory is employed to explain optimal economic relations. In this model, two hunters (Iran and China) face choices: hunting a rabbit alone for minimal gain or collaborating to hunt a deer for greater profit. Applied here, strategic cooperation focusing on long-term interests against U.S. influence yields substantial benefits.
     The model has three key principles: no dominant strategy (neither party maximizes profit alone); mutual awareness of collaboration benefits; and shared will for larger goals (deer hunting). Illustrated in Figure 1, it shows Nash equilibria where unilateral changes are undesirable. Current relations resemble short-term focus (rabbit hunting), leading to limited cooperation. Rules for application include: no dominant strategy amid declining U.S. liberal hegemony and China's need for global expansion; awareness of cooperation in security, energy, and transit; and final will driven by Iran's sanction mitigation needs and China's centennial goals. Geopolitically, Iran's energy transit role is strategic for China's Belt and Road Initiative (BRI), though relations remain asymmetric due to Iran's economic isolation.

Research Method

This study employs a library-based method with descriptive-analytical techniques, drawing on library resources and reputable think tank materials to examine China's political structure, power distribution, and the optimal Iran-China relations model through game theory.

Discussion and Findings

China's domestic politics feature an efficient authoritarian structure driving progress, exemplifying high-growth non-democratic governance. Unlike a malign dictatorship, it involves elite power distribution. Factors like admitting past errors, clear economic goals, shifting from class conflict to socialist modernization, and delegating to industrial entrepreneurs have ensured political stability and economic advancement. China uses economic progress for control while increasing authority amid protests. Joseph Nye notes China's lack of civil society, but compensation via a strong private sector. This "authoritarian modernization or state capitalism" model is globally accepted, with critics and supporters agreeing on top-down command, non-democratic policies, controlled management, and gradual reforms.
     Key institutions include: the Communist Party of China (CPC) with 89 million members overseeing land, jobs, and factories; other parties accepting CPC leadership. Leadership is diverse in ideology and preferences, emphasizing flexibility for internal and international adaptation (e.g., the 2017 constitutional change for Xi Jinping's extended term). Organizational patterns post-1978 include gradual reforms, equal rights, single-party rule with collective decisions, centralized government, entrepreneurial state over bureaucracy, tech surveillance, private enterprise growth, religious suppression, limited military role, and controlled open-door policy.
     Power distribution: General Secretary (e.g., Xi Jinping) heads the party and military commission, with non-explicit duties but international significance; decisions align with institutionalized processes. The Central Committee (State Council) is the top executive, with the Politburo Standing Committee as the most powerful decision-maker. The Politburo handles constitutional amendments. Secretariat coordinates Politburo sessions. The Central Military Commission directs the armed forces. The Discipline Inspection Commission oversees regulations. The Central Committee (205 members) provides policy studies and consultations. The National People's Congress, the highest authority, elects representatives indirectly and supervises institutions.
     Overall, China's structure balances internal equilibrium through elite circulation, rapid adaptation to challenges, and anti-corruption measures.
     Discussion on Entry of Governmental Companies into Interactions with China: Six analytical perspectives on Chinese politics aid economic-political channels: cultural political legitimacy, elite politics and power struggles, civil society and bottom-up change, bureaucratic bargaining, organizational learning, and integrated political-economic analysis. A combination is recommended for better relations, focusing on integrated analysis, learning, bargaining, elite recognition, and cultural legitimacy for the short-term, and civil society for the long-term.
     Findings-Entry of Governmental Companies as a Solution: China's economic transformation began in 1977 with Deng Xiaoping's policy emphasis, leading to free trade zones and foreign investment. Pre-1978, it was centrally planned; reforms (1978-1984) increased enterprise autonomy; 1984-1992 separated management from state ownership; 1992-2002 adopted modern corporate systems; 2003-2012 improved state asset management; post-2012 focused on broad reforms and anti-corruption. Currently, 500,000 foreign firms operate, contributing 45% to foreign trade and 55 million jobs.
     Key results: State-owned enterprises (SOEs) grew from 27 in 2000 to 102 in 2017; assets increased 11-fold (1997-2016); sales increased from $6,813.20 billion (1998) to $47,439.16 billion (2016). Government support is protective, with SOEs stabilizing during crises via employment and services. Budgets are soft, performance-based; financing via markets, stocks, government, and banks; average 40% state ownership.
     China's SOE support, managerial stability, and long-term vision differentiate its interactions. The optimal Iran-China model involves Iranian governance-linked (not government) companies for stability, avoiding short-term governmental shifts. Legal support, stable management, and long-term trade views are key. Global SOE success (e.g., Huawei's resilience) and Malaysia's development via Chinese investment exemplify this. Recent agreements reveal barriers like unaddressed Chinese defaults, unmanaged long-term contracts, and excluded non-governmental institutions due to governmental interests. Long-term planning is needed beyond 4-8-year governments.

Conclusion

This research examines the optimal Iran-China interaction model, emphasizing China's political structure. Key lines include analyzing China's centralized, stable system; SOEs' role in economic progress; and Iran's need for behavioral alignment for optimal interactions. The main question addresses forming optimal economic relations considering China's structure; the hypothesis stresses the entry of Iran's centralized, stable, long-term governmental institutions.
     Theoretical Findings: Using the "hunter game," strategic cooperation benefits both against U.S. hegemony, emphasizing mutual awareness, no dominant strategy, and shared will. China's authoritarian system with elite distribution, flexibility, and decision dynamism fosters stability and growth; the Central Committee and Politburo are vital for Iran relations.
     Empirical Findings: Chinese SOEs, with government support and long-term views, drove growth (sales/assets surges). Iran needs stable non-governmental institutions to counter managerial changes and short-termism. Barriers include unaddressed disputes and excluded institutions.
     Overall, China's flexible, pragmatic, elite-consensus system enables long-term planning; success stems from liberal global interactions, not pure authoritarianism. For Iran, similar models with stable institutions and hidden diplomacy under sanctions can strengthen ties, reducing U.S. effects. Recommendation: Use the "hunter" model, enhance governance-linked companies with legal support and stability for optimal economic-political interactions.
     Suggestions: The "hunter" model is initial; align Iranian institutions with China's preferences via SOE-like stability and long-term contracts, avoiding governmental short-termism for optimal relations.
Ethical Considerations
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Funding
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Conflict of interest
The authors declare no conflict of interest