By Sune Engel Rasmussen and Aresu Eqbali
Iran and China are seeking to cement a wide-ranging partnership
that would deflect U.S. economic pressure and ease Tehran's global
An initial draft of the Iran-China deal, which still requires
Iranian parliamentary approval, would pave the way for Chinese
investments in Iranian free-trade zones and for joint projects in
other countries, such as Syria and Iraq. It would expand
cooperation between the two countries in defense and counter
terrorism. And it says that under a 25-year partnership, China
would import "sustainable" levels of Iranian oil, but offered no
The government has denied that an 18-page draft agreement
circulating online is authentic but announced years ago plans to
enter into an agreement along the lines drawn up in the draft. An
Iranian official has also confirmed that a draft exists, which
China is considering.
Even nascent talks between Iran and China for a partnership of
such scope and duration is an indication of growing concern that
each has about the U.S. Both Beijing and Tehran are engulfed in
acrimonious relationships with Washington. China is engaged with
the U.S. in a trade war, while Iran's economy is struggling under a
raft of U.S. sanctions.
The deal, say analysts, aims to show that both countries have
alternatives to the West, even if many of the projects mentioned
never come to fruition.
"It's an expression of intent," said Dina Esfandiary, a fellow
with The Century Foundation and co-author of a book on Iran's
relations with China and Russia. "It's a useful PR message
China has so far resisted U.S. attempts to cut its consumption
of the Mideast country's crude-oil supply to zero. Sales to China
still account for the majority of oil that Iran exports.
Asked about the 25-year cooperation agreement, China's foreign
ministry spokesman Zhao Lijian last week didn't confirm the deal
but said: "China and Iran enjoy traditional friendship and the two
sides have been in communication on the development of bilateral
relations. We stand ready to work with Iran to steadily advance
For Iran, developing closer ties with China is also a way to irk
Europe. Tehran has repeatedly expressed its impatience with
European countries over the lack of economic returns promised from
an international nuclear deal, which restricted Iran's nuclear
enrichment program in return for easing of sanctions.
The Trump administration left the accord in 2018 before imposing
sanctions and threatening other countries not to deal with Iran.
European parties to the deal sought to coax Iran to abide by its
commitments in the accord by establishing a special trade
mechanism, but it has so far conducted limited transactions.
"Iran's policy of looking East never went away," Ms. Esfandiary
said. "But maybe the Iranians wouldn't have pursued it so much if
European business was flowing into the country."
Former President Mahmoud Ahmadinejad was among the first to take
the current debate over the expansive partnership public when, in
late June, he accused the government of "secretly signing a deal"
An Iranian foreign ministry spokesman didn't immediately respond
to a request for a comment about the draft deal.
The president's chief of staff said Saturday said negotiations
for the deal would stretch into next year due to the coronavirus
pandemic that spread from China and hit Iran hard. A deputy foreign
minister, Reza Zabib, also confirmed to the Iranian Shargh daily
that a draft existed, which China was expected to respond to before
talks could take place.
The deal also envisions the Chinese construction of a railroad
in Iran, and gives Beijing preferential access to port facilities
in the Persian Gulf by undertaking mutual industrial projects in
several ports on Iran's southern coastline.
China already has a longstanding commercial relationship with
Iran that extends beyond oil sales. China is Iran's biggest
commercial partner, even as bilateral trade dropped by about
one-third in 2019, to about $23 billion, according to China's
General Administration of Customs.
Chinese President Xi Jinping in 2016 pledged to boost bilateral
trade between the two countries to $600 billion within a decade,
but trade levels are still far short of that level.
U.S. sanctions have also complicated ties between the two
countries. In the face of mounting tensions between Beijing and
Washington, China National Petroleum Corp. last year pulled out of
a $5 billion natural-gas project in Iran, due to difficulties in
finding banking channels to transfer funds to Iran.
The U.S. also last year sanctioned a Chinese company, Zhuhai
Zhenrong, for transporting Iranian crude. The U.S. has pledged to
punish other countries for undertaking similar moves.
Chinese investment in Iran has sparked criticism that the
Iranian government is selling off parts of the country to Beijing.
Although Iran's relationship with China dates back decades, it has
become increasingly controversial -- and anti-Chinese sentiment has
been on the rise since the start of the coronavirus pandemic.
Iran has seen a surge in coronavirus cases as the country has
lifted lockdown restrictions. On Sunday it reported 2,186 new
infections and 194 deaths, raising the total toll from Covid-19 to
257,303 cases, which includes 12,829 fatalities.
Iranian officials trace the origins of the country's coronavirus
outbreak to a number of Chinese-backed infrastructure projects
built by scores of workers and technicians from China, and to
businessmen traveling between the two countries.
After a health ministry spokesman earlier this year described
Chinese coronavirus statistics as a "joke," Iranian officials
sought to repair relations by thanking China for its efforts in
combating the virus in Iran.
China and Iran first announced the intent to form the 25-year
partnership in 2016, but the renewed emphasis on negotiations now
shows how Tehran is anxious to capitalize on Beijing's heightened
tensions with the U.S., said Esfandyar Batmanghelidj, founder of
Bourse and Bazaar, an Iran-focused business publication.
"Iran has some leverage here," Mr. Batmanghelidj said. "Iran is
using the moment of increased China-U.S. tensions to put pressure
on Beijing to finally agree on a long-term framework for bilateral
Write to Sune Engel Rasmussen at firstname.lastname@example.org
(END) Dow Jones Newswires
July 12, 2020 15:56 ET (19:56 GMT)
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