/ world today news/ China has agreed to invest $400 billion in the Iranian economy over 25 years in exchange for supplies of oil to Beijing at reduced prices, writes The New York Times. As the newspaper notes, although some experts assess the deal as one-sided, it will definitely increase China’s influence in the Middle East, as well as hit US efforts to isolate Iran.
China has agreed to invest $400 billion in Iran over 25 years in exchange for the steady supply of oil Beijing needs to fuel its economic growth. The basis for this deal was the major agreement on the economy and security, which the countries signed last Saturday, writes The New York Times.
A deal like this could both strengthen China’s influence in the Middle East and harm US efforts to isolate Iran. However, it is currently unclear to what extent this agreement can be implemented, given that the US and Iran have not yet resolved the dispute over Tehran’s nuclear program.
US President Joe Biden has proposed resuming talks with Iran on the 2015 nuclear deal that his predecessor Donald Trump pulled out of. American officials believe that Washington and Tehran can simultaneously take a number of steps that will lead to the fact that Iran will gradually return to complying with the terms of the agreement, while the United States will also gradually remove sanctions.
Iran, however, backed away from that approach, while China – one of the parties to the original deal – backed it, saying the United States should take the first step by lifting unilateral sanctions that are stifling Iran’s economy.
On Saturday, Iranian and Chinese foreign ministers Javad Zarif and Wang Yi signed an agreement during a ceremony at the foreign ministry in Tehran. The event was the culmination of Wang Yi’s two-day visit, which showed that China is looking for opportunities to play a more active role in this region, traditionally of strategic importance to the US.
“China firmly supports Iran in respecting its state sovereignty and national dignity“, said the head of the Chinese Foreign Ministry. According to him, the United States should immediately lift its sanctions against Iran, as well as give up a number of anti-Chinese measures.
While neither Iran nor China announced specific details of the new agreement before signing it, experts say the document has not undergone any noticeable changes from the 18-page draft that was leaked to The New York Times last year.
In particular, the document talks about $400 billion in Chinese investment that will target the needs of dozens of industries, including banking, telecommunications, infrastructure, healthcare and information technology.
The investment horizon is set at 25 years. In return, China would gain access to regular supplies of Iranian oil, which one Iranian official said would be at a significant discount. The draft agreement also contained clauses to deepen military cooperation, joint research and intelligence sharing.
The Iranian authorities tried to present this agreement with Beijing as a real breakthrough. However, some Iranian experts fear that Tehran has sacrificed too much with this agreement.
President Rouhani’s top adviser Hessamuddin Ashena called the deal “an example of successful diplomacy“, noting that Iran’s ability to “participates in coalitions rather than remaining isolated” is a sign of his power.
However, in Iran, China’s growing influence is quite controversial.
When Xi Jinping proposed a strategic agreement to Tehran in 2016, negotiations on this issue were initially quite slow. At the time, Iran had just concluded a nuclear deal with the US and other countries, which meant economic sanctions were eased. The improved business climate has caused European companies to flock to Iran, bringing with them investments and proposals for partnerships in the oil and gas sector.
But all hopes for fruitful cooperation were dashed after Trump pulled out of the deal and imposed new sanctions that the Europeans feared could hit them. Such changes in the political landscape forced Iran to look east.
According to critics of the deal, the negotiations on the new deal between Iran and China are clearly lacking in transparency. Moreover, a number of experts are confident that this deal is a waste of Iranian resources and that it itself looks like the one-sided agreements that China has made with countries like Sri Lanka.
Supporters of the deal say Iran must act pragmatically and recognize China’s growing economic influence.
„As part of our strategic alliances, we have kept all our eggs in the West’s basket for too long and this has not produced the desired results” said Ali Shariati, an economic analyst and former member of the Iranian Chamber of Commerce. “Now, if we change our policy and turn our eyes to the East, things won’t be so bad.“
Translation: ES
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