China-Iran strategic partnership-what it really means?

President Trump's aggressive policy against Iran  pushed it towards China

It is not surprising that Iran has announced to strike strategic partnership pact with China. The aggressive policy of Trump administration to isolate Iran and to implement  regime change strategy has pushed more Iran towards China. Iran is desperately looking for long term investment and oil supply agreement. China could offer both. The 25 years partnership pact would have regional repercussions. There will be close military and economic relationship between the two countries. 

The recent reports about the China-Iran deal have hit the headlines across the world. Some might have been flabbergasted by them but for others, especially those watching the developments in the region closely, this was inevitable. Talk about the deal was not new; it surfaced for the first time when the Chinese President Xi Jinping visited Tehran in 2016. 
The huge chinese investment will give breathing space to the Iranian regime which is suffocating under American sanctions. Chinese investment will help  Iran to build modern infrastructure and to develop oil and gas sectors. 
Iran was looking towards European powers to strike investment deals but American sanctions and unilateral pull out from Obama era nuclear deal spoil this efforts. European powers did oppose the sanctions and American decision to withdraw from nuclear deal but showed reluctance to invest in Iran. That attitude of  European powers forced the Iran to tightly embrace China.  

Irani foreign minister Javid Zareef told the parliament that “With confidence and conviction, we are negotiating a 25-year strategic accord with China,” Iran’s top trading partner. China is also a key market for Iranian crude exports, which however have been dampened by US sanctions imposed after Washington’s 2018 withdrawal from a nuclear deal with Tehran.The 25 years partnership pact would have regional repercussions. 

An accord with China has been a hot topic on Iranian social media since populist ex-president Mahmud Ahmadinejad last month denounced negotiations underway with a foreign country. But Zareef, who came under fire over the 2015 nuclear accord which Iranian conservatives had opposed, insisted there was “nothing secret” about the China deal. The nation would be informed “when an accord has been concluded”, he said, adding it had already been made public in January 2016 when Chinese President Xi Jinping visited Tehran.
                                                           

Irani foreign minister Javad Zarif told the parliament that “With confidence and conviction, we are negotiating a 25-year strategic accord with China,” Iran’s top trading partner. China is also a key market for Iranian crude exports, which however have been dampened by US sanctions imposed after Washington’s 2018 withdrawal from a nuclear deal with Tehran.

An accord with China has been a hot topic on Iranian social media since populist ex-president Mahmud Ahmadinejad last month denounced negotiations underway with a foreign country. But Javad Zarif, who came under fire over the 2015 nuclear accord which Iranian conservatives had opposed, insisted there was “nothing secret” about the China deal. The nation would be informed “when an accord has been concluded”, he said, adding it had already been made public in January 2016 when Chinese President Xi Jinping visited Tehran.

Chinese President Xi Jinping’s visit to Tehran in January 2016 laid the foundations for the Iran-China comprehensive strategic partnership agreement. The two countries are now said to be in the final stages of negotiating an economic and security partnership that has military implications. This would create new and potentially dangerous flashpoints in the balance of power in the Middle East and would contribute to the ongoing deterioration of China-US relations.

In recent years, the People’s Republic of China and the Islamic Republic of Iran have expressed a common desire to  formulise the strategic partnership (which has not yet entered into force) by cooperating in such areas as trade, energy, and production capacity. Their willingness to work together arises from historical ties tracing back to the ancient Silk Road, as well as from complementary economic and political interests. A strategic partnership between Tehran and Beijing constitutes a win for both sets of national interests.

The partnership encompasses five main aspects: politics; executive cooperation; human and cultural concerns; judiciary, security, and defense; and regional and international concerns. The sides agreed to develop a roadmap for the partnership for the next 25 years and to increase trade to $600 billion over the next 10 years. None of the programs discussed in the documents is fully operational as yet.

In May 2018, President Trump announced that the US was withdrawing from the JCPOA. This set in motion the re-imposition of secondary sanctions on Iran that resumed in full in November of that year. While Washington’s moves complicated the China-Iran comprehensive strategic partnership somewhat, Beijing said it would maintain normal economic and trade exchanges with Tehran despite Trump’s actions.

In February 2019, President Xi hosted an Iranian delegation that included Tehran’s FM Javad Zarif, the oil minister, and Parliament Speaker Ali Larijani. Xi spoke to Larijani about the enduring friendship between the two countries and said Beijing’s determination to develop their comprehensive strategic partnership remained unchanged despite changes in the global and regional arenas. In May 2019, during a meeting with Zarif in Beijing, Chinese State Councilor and FM Wang Yi said China “supports the Iranian side to safeguard its legitimate rights and interests.”

Over the past few days, reports have emerged of a 25-year strategic partnership deal involving China and Iran being hammered out between the two sides; the deal is said to cover both economic and military aspects.

Moreover, relations between the US and China seem to be going into a deep freeze, with some talking of a new ‘cold war’ between Washington and Beijing. The US has ordered the Chinese consulate in Houston to close in order to “protect American intellectual property”, with China slamming the move as “outrageous”. Moreover, on a recent trip to the UK, US Secretary of State Mike Pompeo called for building a “global coalition” against the China. 

In August 2019, Zarif presented a road map to his Chinese counterpart that would update the China-Iran comprehensive strategic partnership via a 25-year deal involving a $400 billion Chinese investment in Iran. Most of the key specifics of this arrangement were not released to the public, even though they represent a potentially material shift in the global balance of the oil and gas sector.

The central pillar of the new plan is that China will invest $280 billion in Iran’s oil, gas, and petrochemicals sectors. This amount might be front-loaded in the first five-year period of the deal with the understanding that further amounts will be made available in every subsequent five-year period, subject to both parties’ agreement. There will be another $120 billion Chinese investment in upgrading Iran’s transport and manufacturing infrastructure, which again might be front-loaded and then added to in each subsequent five-year period.

More importantly, the agreement will deepen Chinese-Iranian military cooperation through joint training and exercises, joint research and weapons development, and intelligence sharing to fight terrorism, drug and human trafficking, and cross-border crime. Additionally, China will be able to buy any oil, gas, and petrochemicals products at a minimum guaranteed rate of 12% to the six-month rolling low price of comparable benchmark products, plus another 6-8% of that metric for risk-adjusted compensation.
                                                               Khalid Bhatti