BEIJING (Dispatches) -- Iran and China have 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 Islamic Republic, The New York Times said.
The paper claimed on Sunday to have obtained details of an 18-page proposed agreement that would vastly expand Chinese presence in banking, telecommunications, ports, railways and dozens of other projects. In exchange, China would receive a regular supply of Iranian oil over the next 25 years, it said.
The document also describes deepening military cooperation in a region that has been a strategic preoccupation of the United States for decades. It calls for joint training and exercises, joint research and weapons development and intelligence sharing — all to fight "the lopsided battle with terrorism, drug and human trafficking and cross-border crimes,” the report said.
The partnership — first proposed by China’s leader, Xi Jinping, during a visit to Iran in 2016 — was approved by President Hassan Rouhani’s cabinet in June, Foreign Minister Muhammad Javad Zarif said last week.
Iranian officials have publicly stated that there is a pending agreement with China. It has not yet been submitted to Iran’s parliament for approval or made public. Zarif said last week the agreement would be submitted to Parliament for final approval.
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, The New York Times said.
"If put into effect as detailed, the partnership would create new and potentially dangerous flash points in the deteriorating relationship between China and the United States,” the paper said.
"It represents a major blow to the Trump administration’s aggressive policy toward Iran since abandoning the nuclear deal reached in 2015 by President Obama and the leaders of six other nations after two years of grueling negotiations,” it added.
Renewed American sanctions, including the threat to cut off access to the international banking system for any company that does business in Iran, have prompted Tehran to turn to China, which has the technology and appetite for oil that Iran needs. Iran has been one of the world’s largest oil producers, but its exports have plunged since the Trump administration
began imposing sanctions in 2018; China gets about 75 percent of its oil from abroad and is the world’s largest importer, at more than 10 million barrels a day last year.
"At a time when the United States is reeling from 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 United States, powerful enough to withstand American penalties, as it has in the trade war waged by President Trump,” the Times said.
"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 allegedly says in its opening sentence.
The Chinese investments in Iran, which two people who have been briefed on the deal said would total $400 billion over 25 years, could trigger still more punitive actions against Chinese companies, which have already been targeted by the administration in recent months.
According to the American paper, the expansion of military assistance, training and intelligence-sharing will also be viewed with alarm in Washington. American warships already tangle regularly with Iranian forces in the crowded waters of the Persian Gulf and challenge China’s internationally disputed claim to much of the South China Sea, and the Pentagon’s national security strategy has declared China an adversary.
When reports of a long-term investment agreement with Iran surfaced last September, China’s foreign ministry dismissed the question out of hand. Asked about it again last week, a spokesman, Zhao Lijian, left open the possibility that a deal was in the works.
"China and Iran enjoy traditional friendship, and the two sides have been in communication on the development of bilateral relations,” he said. "We stand ready to work with Iran to steadily advance practical cooperation.”
The projects — nearly 100 are cited in the draft agreement — are very much in keeping with Xi’s "Belt and Road Initiative,” a vast aid and investment program, the report said.
The projects, including airports, high-speed railways and subways, would touch the lives of millions of Iranians. China would develop free-trade zones in Maku, in northwestern Iran; in Abadan, where the Shatt al-Arab river flows into the Persian Gulf, and on the Persian Gulf island of Qeshm.
The agreement also includes proposals for China to build the infrastructure for a 5G telecommunications network and to offer the new Chinese Global Positioning System, Beidou.
According to the Times, moving ahead with a broad investment program in Iran appears to signal Beijing’s growing impatience with the Trump administration after its abandonment of the nuclear agreement. "China has repeatedly called on the administration to preserve the deal, which it was a party to, and has sharply denounced the American use of unilateral sanctions,” it said.
Iranian governments, according to the paper, have traditionally looked west toward Europe for trade and investment partners. "Increasingly though, it has grown frustrated with European countries that have opposed Trump’s policy but quietly withdrawn from the kinds of deals that the nuclear agreement once promised.”
"Iran and China both view this deal as a strategic partnership in not just expanding their own interests but confronting the U.S.,” said Ali Gholizadeh, an Iranian energy researcher at the University of Science and Technology of China in Beijing. "It is the first of its kind for Iran keen on having a world power as an ally.”
A top economic adviser, Ali Aqa Muhammadi, appeared on national television recently to discuss the need for an economic lifeline. He said Iran needs to increase its oil production to at least 8.5 million barrels a day in order to remain a player in the energy market, and for that, it needs China.
China has also stepped up military cooperation with Iran. The People’s Liberation Army Navy has visited and participated in military exercises at least three times, beginning in 2014. The most recent was last December, when a Chinese missile destroyer, the Xining, joined a naval exercise with the Russian and Iranian navies in the Gulf of Oman.
China’s state-owned Xinhua news agency quoted the commander of Iran’s Navy, Rear Adm. Hussein Khanzadi, saying that the exercise showed "the era of American invasions in the region is over.”