Iran, China forge relations
Countries defy US efforts to dominate by teaming up for military and trade partnership
IRAN and China have quietly drafted a sweeping economic and security partnership that would clear the way for billions of dollars of Chinese investments in energy and other sectors, undercutting the Trump administration’s efforts to isolate the Iranian government because of its nuclear and military ambitions.
The partnership, detailed in an 18-page proposed agreement obtained by The New York Times, would vastly expand Chinese presence in banking, telecommunications, ports, railways and dozens of other projects. In exchange, China would receive a regular – and, according to an Iranian official and an oil trader, heavily discounted – supply of Iranian oil over the next 25 years.
The document also describes deepening military co-operation, potentially giving China a foothold in a region that has been a strategic preoccupation of the US for decades. It calls for joint training and exercises, joint research and weapons development and intelligence sharing.
The partnership was approved by President Hassan Rouhani’s cabinet in June, Iran’s foreign minister, Mohammad Javad Zarif, said last week.
Iranian officials have publicly stated that there is a pending agreement with China, and one Iranian official, as well as several people who have discussed it with the Iranian government, confirmed that it is the document obtained by The Times, which is labelled “final version” and dated June 2020.
It has not yet been submitted to Iran’s parliament for approval or made public, stoking suspicions in Iran about how much the government is preparing to give away to China.
In Beijing, officials have not disclosed the terms of the agreement, and it is not clear whether Xi’s government has signed off or, if it has, when it might announce it.
If put into effect as detailed, the partnership would create new and potentially dangerous flashpoints in the deteriorating relationship between China and the US.
It represents a major blow to the Trump administration’s aggressive policy toward Iran since abandoning the nuclear deal reached in 2015 by President Barack Obama and the leaders of six other nations after two years of gruelling negotiations.
Renewed US sanctions have succeeded in suffocating the Iranian economy.
But Tehran’s desperation has pushed it into the arms of China. Iran has been one of the world’s largest oil producers, but its exports, Tehran’s largest source of revenue, have plunged since the Trump administration began imposing sanctions in 2018; China gets about 75% of its oil from abroad and is the world’s largest importer.
At a time when the US is reeling from a recession and the coronavirus, and increasingly isolated internationally, Beijing senses American weakness. The draft agreement with Iran shows that unlike most countries, China feels it is in a position to defy the US, powerful enough to withstand American penalties.
“Two ancient Asian cultures, two partners in the sectors of trade, economy, politics, culture and security with a similar outlook and many mutual bilateral and multilateral interests, will consider one another strategic partners,” the document says.
The Chinese investments in Iran, which two people who have been briefed on the deal said would total $400 billion (R6.69 trillion) over 25 years, could trigger still more punitive actions against Chinese companies, which have already been targeted by the administration in recent months.
“The US will continue to impose costs on Chinese companies that aid Iran, the world’s largest state sponsor of terrorism,” a State Department spokeswoman wrote in response to questions about the draft agreement.
“By allowing or encouraging Chinese companies to conduct sanctionable activities with the Iranian regime, the Chinese government is undermining its own stated goal of promoting stability and peace.”