TEHERAN/BEIJING • 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 United States’ efforts to isolate Teheran for 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 Iran.
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 cooperation, potentially giving China a foothold in a region that has been a strategic US preoccupation for decades.
It also calls for joint training and exercises, joint research and weapons development as well as intelligence sharing to fight “the lopsided battle with terrorism, drug and human trafficking and cross-border crimes”.
The partnership – first proposed by China’s leader Xi Jinping in 2016 – was approved by President Hassan Rouhani’s Cabinet last month, Iran’s Foreign Minister Mohammad Javad Zarif, said.
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 would be a major blow to the Trump administration’s aggressive policy on Iran since it abandoned 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 Teheran’s desperation has pushed it into the arms of China, which has the technology and appetite for oil that Iran needs.
Iran has been one of the world’s largest oil producers, while China is the world’s largest importer. At a time when the US is reeling from recession and the coronavirus, and increasingly isolated internationally, Beijing senses American weakness.
The draft agreement shows that unlike most countries, China feels it is in a position to defy the US and powerful enough to withstand American penalties.
The Chinese investments in Iran, which two people who have been briefed on the deal said would total US$400 billion (S$556 billion) over 25 years, could trigger still more punitive actions against Chinese firms, which have already been targeted by the US in recent months.
“The United States will continue to impose costs on Chinese companies that aid Iran, the world’s largest state sponsor of terrorism,” a State Department spokesman wrote in response to questions about the draft agreement.