Iran, China, and the Belt and Road Initiative (Part I)

I. Iran, China, and the Global Data Network

My goal in this essay is to investigate the role of Iran in China’s ‘Digital Silk Road’, which is the digital version of China’s Belt and Road Initiative (BRI). The story of Sino-Iranian tech cooperation must be investigated in the larger context of the geopolitical and geoeconomic roles that the two countries are playing or claiming to play. This is especially crucial since those roles are primarily geared to challenge the global and regional hegemony of the US, if not to replace it. In fact, the two countries’ self-defined roles are connected in such a manner that the Trump administration’s crackdown on Huawei, and its request for the extradition of Meng Wanzhou, the CFO of Huawei, from Canada to the US, was based on the allegation that Huawei’s ‘unofficial subsidiary’, Skycom, violated the Iran sanctions by doing business with Iran. The $1.2 billion fine that was levied on ZTE in 2018 was also due to its alleged selling of sensitive technology to Iran and North Korea.

It is first necessary to contextualize the topic in terms of the Sino-Iranian relations, Iranian leaders’ view of the emerging global order, and the place of China and Iran in this order. Iranian leadership, both on the conservative and the reformist fronts, view the contemporary world as one in ‘transition’ towards a ‘post-Western world’. In this view, Asia or ‘the East’ is rising, as ‘the West’ retreats. Along these lines, Javad Zarif, the Iranian Foreign Minister and university professor at Tehran University, has coauthored a book with the title ‘Transition in International Relations of post-Western World’ (2016). The country has accordingly developed a doctrine called ‘Pivoting to the East’.

Iranian foreign policy, including its cyber-related elements, is centered on this transitional, ‘East’-oriented worldview. In this emerging global order, Iranian elites view the rise of China (and other Asian powers such as India) as inevitable. This view dovetails comfortably with the Chinese elite view of the emerging global order. Xi Jinping views the present moment in terms of the world ‘facing a period of major change never seen in a century’. Along the same lines, Wang Yi, the Chinese Foreign Minister, has called for ‘a new type of international Relations’. The basic premise of the Sino-Iranian contemporary worldview can be summarized as follows: Western powers are no longer, or should no longer be, the sole actors who set the agenda for global politics and economics. In the new global order, China aims to be a global power and Iran a regional power.

The two actors have formed ‘a comprehensive strategic partnership’. It is important to note that the relationship between the two countries is a ‘partnership’ and not an ‘alliance’. As far as partnerships go, it is a multifaceted and deep-rooted one. The two countries have numerous ideological, material, historical, and policy affinities. Both push the discourse of being ancient continuous civilizations that have survived the test of time. Both emphasize that they never had a major confrontation with each other in their long history. More recently, the two countries have up-lifted their partnership to the strategic level through various means, particularly, the New Silk Road (aka Belt and Road Initiative – BRI), China’s geoeconomic initiative to reconfigure global economic geography. Iran plays a (potentially) integral role in the BRI due to the size of its economy and middle classes, energy re-sources, security partnership with China, relatively well-developed transport infrastructure, and the centrality of its geography. Iranian vision in the New Silk Road is to make itself a civilizational and economic crossroads at the inter-section of its multiple neighbouring regions and countries, such as Caspian Sea region, Central Asia, Russia, Persian Gulf region, the Indian Ocean, the Levant, and the Mediterranean region. To cut a long story short, Iran and China complete each other’s strategic needs in more ways than one.

It was due to such affinities and complementarities that the two countries have signed a strategic ‘25-year-roadmap’ or cooperation framework (with an estimated worth of US$400 billion), covering most of the major strategic areas of cooperation between the two sides. It involves the energy sector, multimodal infrastructure, investment in Iranian manufacturing base, creation of free economic zones, banking, industrial parks, and security and intelligence-sharing, and more relevant for the purposes of this particular report, cooperation in the field of ‘information technology and communication’.

Just as Iran has embraced the New Silk Road, it has also welcomed its offshoots such as the ‘Health Silk Road’ and the ‘Digital Silk Road’ (henceforth, DSR), the digital offshoot of New Silk Road, introduced ‘with a loose mandate’ in 2015. In more recent years, DSR has taken a more systematic shape through Chinese investments in information and telecommunications infrastructure of countries across the BRI geography. The stated aim is to create digital connectivity in a way that serves the interests of Chinese and recipient countries. This push intensified in the aftermath of the Trump administration’s attack against Chinese tech giants such as Huawei, ZTE, and others. Through the DSR, China aims to solidify its role in the global technology and also find new growth markets (mainly located in the Global South) for its tech players, some of which are banned from North American and several European markets. It is important to note that viewing Chinese DSR purely on its own term and just as a security and surveillance issue is myopic and will inevitably lead to myopic policy analysis and recommendations. A more comprehensive perspective is needed, which should view the DSR in the larger context of China’s increasingly influential role in global development. ‘The Digital Silk Road’, in other words, is a development issue’.

It is the aim of this report to examine Sino-Iranian digital technology cooperation. The analysis will unfold in the four following sections. Part 2 will discuss three events that serve as moments of awakening for Iranian elites (the Flame malware, the Stuxnet attack, and the use of social media in the 2009 political unrest in Iran). Part 3 will discuss the Iranian efforts, inspired by and in cooperation with China, to develop a national internet. Part 4 discusses the geopolitics of 5G development in Iran and the role of Ericson, Nokia, and Huawei in this dynamic. Part 5 concludes the report by discussing the prospects of a Sino-Iranian ‘united cyber front’.

II. Iran and the Cyber World

To understand the role of Iran in cyberspace, it is important to know what put Iran on the global cyberspace map. There are three moments of awakening that happened towards the end of the 2000s, which jolted the Iranian political leadership into putting their cyber act together. The first event pertains to the political unrest in Iran in 2009. The Green Movement came into being in the aftermath of the disputed Iranian presidential election, which resulted in a controversial second term for the incumbent president, Ahmadinejad. The rival campaign of Mir-Hossein Mousavi effectively used social media in the pre-election campaign as well as during the post- election contestation of the results. This met with unprecedented violent crackdown by the country’s security forces. The protesters used social media networks such as Facebook, Twitter, and YouTube to organize protests and inform the international media of the goingson in the country. The revolution, for better or worse, came to be known as the Twitter Revolution by some Western media. This event and the widespread role of internet in it by protesters shook the Iranian political establishment to the core.

The second moment of awakening was the attack known as Stuxnet. This was the first publicly known case in the world where states used a cyberweapon against another state with kinetic consequences. The malware infiltrated and wreaked partial physical havoc on Iranian nuclear infrastructure. It was uncovered in 2010. Although neither confirmed or denied officially, the attack, codenamed “Operation Olympic Games”, was attributed to the US and Israel. This operation started during the Bush administration and was finalized during the Obama year, and ‘temporarily took out nearly 1,000 of the 5,000 centrifuges Iran had spinning at the time to purify uranium’. During that time, Iran was under a Western sanctions regime. In response to this attack, Iran carried out a cyberattack against ARAMCO, the Saudi oil company, which wiped out more than two thirds of the Saudi company’s IT infrastructure, bringing it close to collapse.

The third moment was the massive and highly sophisticated malware that came to be known as the Flame, which was used against computer systems running on Windows in Middle Eastern countries. The majority of infected systems were in Iran. The malware was detected first by the MAHER Center of the Iranian National Computer Emergency Response Team and Kaspersky Lab. The victims included Iranian governmental organizations and educational institutions. The malware could record the audio from devices, monitor keyboard activity, activate the Bluetooth system to infiltrate nearby Bluetooth-activated systems, and take regular screenshots. It is not clear how long the virus was active in Iran and the rest of the Middle East. All evidence points to the fact that this highly sophisticated malware was produced by a state actor and that the main (but not the sole) target was the Iranian political and scientific establishment.

III. Iran and Cyber Sovereignty: A Local Network Next to a Global One

These three events/processes drove home the unavoidable lesson that a systematic understanding and control of (national) cyberspace was indispensable to the very survival of the political establishment. This understanding was strategic and came from the top. In March 2012, the Iranian Supreme Leader, Ayatollah Khamenei, personally announced the establishment of the Supreme Council of Cyberspace (SCC), which shows how critical this issue is for the leadership. In this background, the so-called Iranian Cyber Army was formed, which is believed to be affiliated with the Iranian military-political establishment. In this context, the idea of the Iranian ‘national Internet’ or ‘National Information Network’ (NIN), which had been formulated and introduced by the Ministry of Information and Communication Technology in 2005, got a serious start in 2013 following these incidents. From 2013 to 2017, under the Rouhani administration, the cybersecurity budget went up by 1200%.

A significant part of Iranian domestic cyberspace policy has been aimed at controlling and surveilling the domestic political landscape, identifying political adversaries, and organizers of anti-government protests. For this type of surveillance technology, Iran is heavily reliant on its international partners such as China. Chinese companies have reportedly provided Iran with the technological means to surveil the Iranian population’s communications. ZTE, China’s second largest telecom equipment-maker, for instance, provided such ‘networking’ technology, in a 2010 deal, to the Telecommunications Company of Iran (TCI), which is government- controlled, and which has a near complete monopoly over landline telephone services in Iran. A considerable proportion of the Iranian internet traffic is supposed to go through its network. The technology was reported to be able to ‘to locate users, intercept their voice, text messaging ... emails, chat conversations or web access’.

As part of the strategic 25-year cooperation deal, cyber cooperation with the purpose of building the Iranian national internet has been mentioned as a clause in the leaked text of the deal. In this sense, one can see that Iran has practically adopted the Chinese discourse of ‘cyber sovereignty’ or ‘national internet’. Inspired by China, Iran is creating national apps and online platforms (such as Shad, used in online education) to make the country independent from Western digital technology as much as possible. Ultimately, Iranian leaders want to have a functioning closed intranet system for the day to day running of Iranian society, e-governance, and economy, next to being connected to the internet. Then they can shut the country off the global internet whenever they want while enhancing the digitization of society and economy. This vision is both inspired and facilitated by China, whose major tech player have been involved in this process in one way or another. ZTE, as discussed in the introduction, has been involved in Iran and has been fined for it. Alibaba has a strong presence in the country for instance in online ticket purchasing and hotel reservations, car rentals, and such through its Persian language website, which is connected to the Iranian banking system and online shopping.

N.B. Part 2 is due to be published on 19 February.