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What Do We Know About the Iran-China Deal?

March 28, 2021
7 min read
A few hours before signing the “Comprehensive Strategic Partnership”, the Chinese Foreign Minister Wang Yi had met with President Hasan Rouhani
A few hours before signing the “Comprehensive Strategic Partnership”, the Chinese Foreign Minister Wang Yi had met with President Hasan Rouhani
Chinese Foreign Minister Wang Yi also met with Ali Larijani, former speaker of the Iranian parliament who had visited Beijing on February 20, 2019
Chinese Foreign Minister Wang Yi also met with Ali Larijani, former speaker of the Iranian parliament who had visited Beijing on February 20, 2019

On Saturday, March 27, the respective foreign ministers of Iran and China signed a 25-year agreement, known as the Comprehensive Strategic Partnership, in Tehran. A few hours earlier the Chinese Foreign Minister Wang Yi had met with President Hassan Rouhani.

Talk and speculation have swirled around such an agreement for a few years now. But officials of the Islamic Republic have refused to provide any transparent information about it, either denying media reports or making sweeping, opaque or elusive statements. The specifics – specifics such as the plan to lease the Persian Gulf island of Kish to China – have been few and far between.

The Long Queue to Deny One Report

Back in September 2019, various officials of the Islamic Republic, including the foreign minister, the government’s official spokesman, the president’s chief of staff and the foreign ministry’s spokesman, lined up to issue denials on “a report” published by the British journal Petroleum Economist. Naturally, they did so without naming it.

The article, penned by Simon Watkins and published on September 3, had put forward some details about the agreement. According to this article:

- China is to invest a total of $400 billion in Iran over the course of of 25 years, with most of the expenditure in the first five;

- Of this, $280 billion will be invested in oil, gas and petrochemicals and $120 billion in other sectors but specifically in transportation and building roads;

- In return, Iran will sell its oil, gas and petrochemical products to China at a heavy discount and they will be paid for in the Chinese currency of yuan after two years;

- Iran will give priority to Chinese companies in all sectors;

- Iran will allow China to station 5,000 of its security forces in Iran to protect its project.

The Persian Version

So far officials of the Islamic Republic have not disclosed so much as one sentence of the draft agreement or its details. But various Iranian media outlets including IranWire have gained access to something purporting to be the text.

On July 8, 2020, both IranWire and the website Ensaf News received an 18-page document entitled the “Final Draft of the Plan for Comprehensive Iran-China Cooperation”. It indicated a partnership between Iran and China in the areas of trade, security, military cooperation, tourism and international relations but also that huge concessions would be given by Iran to China, with the latter given priority in national infrastructure projects and digital services.

Of course, as Ensaf pointed out at the time, that draft text had yet to be approved by the cabinet and it was not known whether any changes had been made since then. Later a number of Western media outlets, including the New York Times, reported that they had gained access to a similar 18-page document.

Revelations and the Lease of Kish Island

In the past couple of years, at least three officials of the Islamic Republic have pointed to certain clauses in this secret agreement and criticized the secrecy around it.

On March 13, 2019, Hassan Norouzi, a member of the parliament, said that he had sent a written warning to President Rouhani about “leasing of Kish Island to the Chinese”. According to him, the government was in negotiations to lease Kish Island to China for 25 years.

On June 27, 2020, former President Mahmoud Ahmadinejad declared: “They are negotiating and want to sign a new 25-year agreement with a foreign country, and nobody knows anything about it. Do you own this country, that you want to give away what belongs to the people without their knowledge?”

Three weeks later on July 17, Mahmoud Ahmadi Bighash, an MP, said in an interview that the reports about leasing Kish Island to the Chinese were true. Immediately afterwards, however, the Iranian foreign ministry denied this claim and said that such “baseless” assertions would inflict great damage on the national interests of the Islamic Republic. Bighash was forced to retract his statement in a video.

A Chronology

It was around five years ago that the subject of a “25-year strategic relations” between Iran and China was first raised in public. During a visit to Tehran on January 23, 2016, Chinese President Xi Jinping met with the Supreme Leader Ayatollah Khamenei and both sides talked about a 25-year strategic relation. After that a series of other noteworthy events took place.

Ali Larijani, the then-speaker of the parliament, visited Beijing on February 20, 2019 and met with the Chinese president. Then in a follow-ip meeting with a Chinese official in Tehran on July 30, 2019, Larijani said that in his visit to Beijing Xi Jinping had emphasized the need to draft a 25-year cooperation plan. He added that Iran had drafted the agreement “from its own viewpoint and we must negotiate with the Chinese side to arrive at a joint strategic document.

Apparently Iran submitted its draft of the agreement to Beijing a month later in August 2019 and in March 2020, the Chinese government sent its final comments back to Tehran. Rouhani’s administration approved the document on June 21, 2020 and the foreign ministers of the two countries have now signed it in Tehran.

Throughout all this time no official of the Islamic Republic has provided any information about this agreement to the Iranian public save for denials and generalizations. Foreign Minister Mohammad Javad Zarif even agreed to write a piece about the agreement for the Chinese, but Iranians never received any similar explanation. About a year and a half ago, as he was heading to China, Zarif’s article for the Chinese journal Global Times was published before he arrived in Beijing.

“Today, China has become an indispensable economic partner of Iran and the two countries are strategic partners on many fronts,” wrote Zarif. “But in order to overcome the emerging challenges which have impeded the ability of many nations to achieve sustainable development, it is imperative for both China and Iran to strengthen their ties more than in the past...We believe that common problems need common solutions thus requiring greater cooperation, coordination and close communication... Any successful strategic partnership demands a strong foundation of economic relations that benefits both parties.”

The secrecy was so complete that it fell to the Iranian news agency Tasnim to report in October 2020 that the five-year pre-agreement period between China and Iran had practically started, and a $10 billion agreement, signed by five Iranian banks and the Chinese investment management giant CITIC Trust, had been part of this deal.

In the summer of 2020, Mohammad Hossein Malaek, a former Iranian ambassador to China, said that the idea of a 25-year strategic cooperation had first been brought up during the 2016 visit of the Chinese President Xi Jinping to Tehran. But, he added, “because at the time the government had signed the nuclear treaty and had other alternatives such as Europe, this proposal got nowhere.” Aaccording to Malaek, when Donald Trump was sworn in as president , Iran found the proposal attractive and Zarif told the Chinese about it during his visit to Beijing.

Just a Piece on China’s Chessboard?

Observes and analysts fall into two camps when it comes to Iran and China’s respective motives for arriving at this “strategic partnership”. The first camp emphasizes Ayatollah Khamenei’s much-vaunted strategy of “looking east” and his personal efforts to get closer to China and Russia. The second downplays the purposes of the Iranian regime and emphasizes that this is all part of China’s strategy to create its desired new world order within the framework of the “Belt and Road” initiative, a global infrastructure development strategy adopted by the Chinese government in 2013 to invest in about 78 countries and international organizations and in so doing, establish its economic, political and military hegemony over these countries.

In recent years supporters of the second view have emphasized that what counts when it comes to this agreement and similar ones is China, and not Iran. “This isn’t about Iran; it’s about China,” wrote Robert D. Kaplan in June 2019 in the New York Times. “Iran is at the very center of 21st-century geopolitics. It dominates Central Asian trade routes and sits at the hydrocarbon nexus of the Indian Ocean, with a coastline of over 1,500 miles stretching from Iraq to Pakistan. Iran is the key to China’s plans, just as China’s plans are key to Eurasia’s destiny.”

In recent years many analysts have warned that China is seeking to build a new colonial empire, pointing out that not only are the agreements between China and other countries opaque, but most of these countries cannot meet their obligations under these agreements and this puts Beijing in a stronger position to enforce its will in the future.

Related coverage:

Exclusive: Iran Agrees to be China's Client State for the Next 25 Years

Former President Ahmadinejad Warns About Iran's Long-Term Agreement with China

Khamenei Buys into China’s “New Silk Road” Plan

Ancient Ties, the “Eastern Strategy” and Other Essentials of the Iran-China Connection



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