In 1979, both Iran and China underwent revolutionary transformations. In China, Deng Xiaoping inaugurated formal diplomatic relations with the United States, repudiating the Maoist Cultural Revolution that had devastated the country. In Iran, Shah Mohammad Reza Pahlavi was replaced by an Islamist regime committed to opposing the United States and exporting its revolutionary ideology. One of these upheavals has led to China’s unprecedented wealth and power, while the other has left Iran mired in economic stagnation.
On Aug. 5, Ebrahim Raisi will be inaugurated as Iran’s eighth president since the revolution. The Biden administration has been eager to reenter the Iran nuclear deal before the hard-liner takes office. But they needn’t worry: Should the administration choose to uphold the pressure until Iran returns to nuclear compliance, Raisi may well sign on to the old Joint Comprehensive Plan of Action. He would need sanctions relief to address the regime’s existential economic crisis.
Raisi is expected to prioritize economic growth and seek to share the dividends with Iranians to regain legitimacy for the regime. If he succeeds, such a scenario would be akin to China’s model of authoritarian prosperity. But it won’t happen. Iran’s historical experience, the regime’s Islamist revolutionary nature, and the structure of the Iranian economy dictate that the regime would never adopt the “China model” of development.
The notion of a China model for Iran is nothing new. Iranian leaders and reform-minded analysts have bandied about the term for decades. But until now, even an Iranian version of the China model—offering prosperity and limited economic liberalization to buy off a politically restive populace—has been elusive for Tehran’s rulers. Still, their faith springs eternal, and new economic ties with Beijing have spurred hope that with sanctions relief from U.S. President Joe Biden, all the necessary ingredients will come together.
Their thinking is as follows: Iran’s economy has suffered because the world has victimized the Islamic Republic for its legitimate nuclear program and its policy to help its neighbors and co-religionists against foreign aggression. Grouped together under the rubric of “resistance,” Tehran’s leaders have sought to portray their own economic mismanagement as the product of outside forces.
Here’s the problem. China’s economic reforms in 1979 started as a grassroots endeavor forced on the party-state due to the failure of the command economy. In Iran, the state relies much more on resource exports than citizen participation in the economy to stay financially afloat.
China’s economic liberalization in 1979 followed Mao Zedong’s disastrous Cultural Revolution (1966-1976). The command economy coupled with political chaos only produced trauma. But by the early 1970s, resourceful peasants in southeastern China had spontaneously started market activities without the blessings of the state. The makings of an economy independent of the state were already there.
In the aftermath of the Cultural Revolution, Mao’s successor Deng understood that if the party-state could not stop the market, it should finesse it to its interests. Deng also realized that for the Chinese Communist Party (CCP) to maintain its political monopoly, it would have to deliver genuine economic growth. The CCP thus purged dogmatic Maoists and initiated a bottom-up economic liberalization, gradually abandoning the command economy. A major achievement of the CCP was to allow Chinese citizens to enjoy a high degree of economic freedom and share the dividends of state-directed economic growth.
In the last four decades, Deng and his successors have based the CCP’s legitimacy on rapid economic growth and tangible improvement in living standards. To the party’s credit, its ability to deliver on its economic promises has generated significant popular support, despite the bottleneck the model of development has reached in recent years and deteriorating political freedom in the country.
Iran, by contrast, has been ruled by a rigid Islamist revolutionary clerical regime since 1979. The clerical regime seized power during Iran’s equivalent of the Tocqueville paradox: the shah’s inability to manage growing popular frustration amid otherwise generally improving social and economic conditions.
The post-shah regime after 1979 based its legitimacy on religion, hypersensitivity to sovereignty, and a bloated sense of Iranian power. Neither political freedom nor economic growth for the Iranian populace factored much into its calculations, either in the sense of an escape valve to diminish domestic economic pressure or as part of a China-style compact of Gucci bags in exchange for political quiescence.
The Iranian leadership justifies its God-sanctioned rule in terms of religious salvation, even if it fails economically. It views its legitimacy as inherent under Islam, rather than earned, which is built in to the very concept of continuous Islamist and revolutionary rule. As a result, genuine Chinese-style market authoritarianism is unappealing to Tehran’s mullahs, and equally so to the government’s military praetorians in the Islamic Revolutionary Guard Corps. The regime is convinced that maintaining the loyalty of a coterie of elites and brutally suppressing any defiance while keeping a basic semblance of a welfare state for the bottom strata of the society is the secret formula for the regime’s longevity.
Amid China’s economic takeoff in the early 1990s, Deng put forward a 24-Character Strategy with regard to China’s role in the post-Cold War global order. He assured Chinese and foreigners alike that there would be a stable policy environment in China for economic development. In Iran, however, although the regime entertains the idea of mimicking the China model more seriously, a permanent state of revolution will prevent the model from working.
Iran’s ongoing Islamic revolution and the regime’s intrinsic hostility toward the West, especially the United States, are fundamentally at odds with the stable domestic and foreign-policy environment required for steady economic growth beyond exporting natural resources.
In short, neither Raisi nor Xi Jinping nor Iran’s friends in the Biden administration are going to help Iran achieve a China-model transformation. The economic growth that may be a product of lessened sanctions or new contracts with Chinese companies will not be focused on securing legitimacy for the powers that be in Tehran. That’s because neither Ayatollah Ali Khamenei nor his handpicked president believes they must seek legitimacy from the Iranian people, nor is there any evidence of a desire to deliver an economic dividend to them.
Instead, any influx of cash to Iran will be used as it has always been—to co-opt elites through power and wealth, strengthen the regime, secure its power, and advance its regional agenda, such as supporting its proxies like Hezbollah and financing Iran’s missile program. This “Iran model” will always trump the China model, no matter how appealing the idea of importing Deng’s reforms to Tehran may be for Iranian leaders.
Forced by historical circumstances, the Chinese Communists consolidated the party-state by abandoning a political revolution to embrace an economic one and gave the populace economic dividends in exchange for quiescence. Iran’s leaders have never believed that they need popular legitimacy to rule. To stay in power, Tehran’s clerics will never enrich the Iranian people, lest they begin to demand more rights.
