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China, Iran Approach Major Accord Amid Deteriorating US-China Relations

Si Yang

   WASHINGTON - Beijing is reported to be in the final stages of approving
   a $400 billion economic and security deal with Tehran, which some
   analysts say could give China a vast and secure source of energy and a
   strategic foothold in the Gulf.

   Iran's foreign ministry has confirmed that the potential agreement
   includes significant infrastructure investments and closer cooperation
   on defense and intelligence sharing. It's also rumored to include
   discounts for Iranian oil.

   The deal is the latest step in Beijing's attempt to expand from a
   regional hegemony to a world power via its Belt and Road Initiative.

   China-Iran deal

   There are no concrete details of the deal available yet, but reports
   about what is under discussion indicate massive investment. China is
   reportedly considering investing $280 billion in developing Iran's oil,
   gas, and petrochemical sectors; and another $120 billion in upgrading
   Tehran's manufacturing infrastructure.

   The deal's scope was further illustrated when Iran's Foreign Minister
   Mohammad Javad Zarif told parliament on July 5 that the country has
   been negotiating a 25-year accord with China "with confidence and
   conviction."

   A report by the [1]Petroleum Economist suggests that the deal
   represents a potential shift to the global balance of oil and gas
   sector, as Iran has promised China guaranteed discounts on its oil and
   gas, and the right to delay payment for Iranian production up to two
   years.

   China is Iran's top trading partner and a key market for Iranian crude
   oil exports, severely impacted by U.S. sanctions.

References

   1. https://www.petroleum-economist.com/articles/politics-economics/middle-east/2019/china-and-iran-flesh-out-strategic-partnership

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