The US is fuming with China over a possible $400 billion deal with Iran. China and Iran are negotiating a 25-year pact which would get China a substantial discount on the Iranian oil. In return, Beijing will invest a whopping $400 billion in the Islamic nation over a period of 25 years.
Amid the ongoing Covid-19 pandemic coupled with severe US sanctions, Iran is seeing a looming economic crisis which has led to a destruction of the livelihood of millions of Iranian people.
China’s billion-dollar deal is a breather for Iran’s economy which is hard hit by Trump “maximum pressure” campaign against the Islamic nation. Tehran has been hit hard by these sanctions reimposed following Washington’s withdrawal from the 2015 nuclear deal in 2018.
Iranian crude exports have been severely curtailed by the US sanctions, as has much of the country’s foreign trade. “Every road is closed to Iran,” said Fereydoun Majlesi, a former diplomat and a columnist for several Iranian newspapers on diplomacy. “The only path open is China. Whatever it is, until sanctions are lifted, this deal is the best option.”
The deal is yet to be approved the Majles, Iran’s parliament. It is expected to expand economic development in a variety of fields, including banking and infrastructure, such as telecommunications and transport.
In return of this investment, Beijing is going to receive Iranian oil at a sharply reduced price for the next quarter-century. This would potentially help Iran roll out its 5G network through China’s global positioning system.
The deal also incorporates military cooperation between Iran and China including weapons development, combined training and intelligence sharing in order to combat “the lopsided battle with terrorism, drug and human trafficking and cross-border crimes”.
Unlike most of the countries, China has sensed the American weakness during the reeling recession amid the Covid-19 pandemic and is ready to defy the US by withstanding Trump’s penalties amid the US-China trade war.
Tehran and Beijing’s show of strength against their common foe, the US has evoked a bitter reaction. The expansion of military assistance, training and intelligence-sharing has alarmed Washington.
China and the US continue to tangle in the internationally disputed waters of the South China Sea while the US warships often challenge Iranian forces in the Persian Gulf. “The United States will continue to impose costs on Chinese companies that aid Iran, the world’s largest state sponsor of terrorism,” a US 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,” she added.
“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 which is keen on having a world power as an ally.”
Beijing’s indifference to regime transgression against the Iranian people and to keep the regime afloat has shattered Washington’s dream of any potential influence that it dreamt of through its maximum pressure campaign. After trying to cut off all of the options available to the regime, it is hardly a surprise if Tehran is willing to accept the way out offered by the Chinese.