Forged in secrecy, a commercial partnership between Iran and China could yield a shift of power that could potentially determine who will be the global power in this region and the world. Ominously, a deal between these two rogue powers that includes military personnel and ordnance elevates the importance of this topic exponentially.
In this article, a breakdown of these topics is extremely important and will illustrate a comprehensive view of the power China is gaining in its evergrowing movement toward World Domination.
Hat-tip to an anon researcher for bringing this information to my attention. Unfortunately, the “Mainstream Media” and/or those who want to control what we read have not reported on this. Hopefully, this article will break it down for them to understand.
The China – Iran agreements, which we will be going over, have gone beyond what the Chinese have done in the past to influence other countries under the banner of economic and infrastructure project development.
A partnership between China and Iran at this time has the potential to reshape trade and military dominance in the South China Sea, the Arabian Sea, the Gulf of Oman, and into the Persian Gulf.
Some may ask “How did China get such a hold on so many countries?”
In the following video report, Simone Gao presents the unscrupulous tactics and an overview of what the Chinese have been advancing.
The following image depicts the locations of Chinese influenced countries world-wide.
Over the past 10 years, China has been staying on point in its quest for Global Dominance.
From its inception in 2009, BRICS (Brazil, Russia, India, China, and So. Africa), effectively a financial instrument of Chinese Banking, was created to help the member countries in the group to advance their infrastructure. This deals in the infastructure field of roads, rail, seaports, and environmental projects.
These agreements have not turned out as well as many had thought. The deals were for projects of each other’s countries. In signing these agreements, BRICS would back loans of the respective countries’ banks to finance the projects.
In doing so, the agreements outline what will happen if the countries can’t service their debt. BRICS has the right to foreclose, so to speak, on the project. This gives China sovereign ownership of the infrastructure projects in the country indebted.
Now China has set a long term goal to gain more influence in the Middle East.
China and Iran have been holding secret meetings to expand China’s presence into Iran. The first plan was initiated in a report, Full text of Joint Statement on Comprehensive Strategic Partnership between the I.R. Iran, P.R. China. (link to statement)
The following articles layout the ultimate goals of the CCP (Chinese Communist Party) in Iran.
A landmark 25-year deal on economic and political cooperation between Iran and China has caused controversy and fierce debate in the Islamic Republic.
Following reports that the Iranian cabinet had given its approval to a draft of the plan last month, critics argued Tehran had agreed to a ‘colonial’ deal that would allow China to plunder the country’s natural resources and oil reserves.
Although Iran has not revealed the full details of the partnership, a report in September by the monthly magazine Petroleum Economist suggested that Iran is set to grant huge concessions to China, including significant discounts on oil and gas and the ability to delay payments for up to two years and to pay in soft currencies.
According to a senior source closely connected to Iran’s petroleum ministry, who spoke to Petroleum Economist (link inserted) in late August, China would also be granted first refusal on opportunities to become involved with any petrochemicals projects in Iran.
China will invest $280bn developing Iran’s oil, gas and petrochemicals sectors and another $120bn on upgrading the country’s transport and manufacturing infrastructure.
The source said the deal would also provide for up to 5,000 Chinese security personnel on the ground to protect Chinese projects.
There were also rumours in Iran’s media that Tehran had ceded Kish Island, which has free trade zone status, to Beijing.
Angry comments from Iranians lit up social media following news of the draft deal.
Some compared the plan to the Treaty of Turkmenchay, an infamous agreement between Iran and Russia signed in 1828, under which the Iranian monarchy handed a large part of its lands in the north to the Russian Empire.
Fierce debate over the proposed cooperation plan first began on 27 June, when former Iranian president Mahmoud Ahmadinejad attacked the deal.
According to an article published on the pro-Ahmadinejad website Dolat-e Bahar, the ex-president told the people of Gilan province: ‘We have heard that they are negotiating and want to sign a new 25-year agreement with a foreign country, and no one knows about it.’
Ahmadinejad called it a suspicious, secretive deal (link is to an Irania news article in Aribic) that the people of Iran would not approve.
Iranian opposition groups in the diaspora have also voiced concerns about the plan, expressing their resistance to it and describing it as being ‘colonial.’
However, a source with knowledge of the details of the plan told MEE that many of the reports about the deal were ‘ridiculous.’
‘The draft cooperation document is by no means a contract, and it only includes a 25-year cooperation programme about which there have been some suggestions made since the Chinese president visited Iran four years ago, and its details should be discussed,’ they said.
‘Basically, this programme does not include any investment figures, nor does it say anything about the presence of Chinese troops in Iran, and the overtaking of Iranian military bases by them, nor anything about the transfer of some Iranian islands to China, etc.’
Iranian Foreign Minister Mohammad Javad Zarif has been tasked with holding talks with the Chinese side about the details of the cooperation plan to prepare it for final approval.
‘There is nothing to hide about the deal. Every stage has been transparent, and once it is finalised, the details will be made public,’ Zarif told lawmakers earlier this month as he was questioned over the deal.
‘The point that has to be taken into consideration in our foreign policy is the shift in global power.’
‘China will gobble up Iran’
As it often true with issues in Iran, which is prone to being easily socially polarised, people’s reactions to the announcement of the plan fell into two main categories.
Some welcomed closer relations with China as a positive development and as beneficial to Iran’s economic interests, while others saw the deal as similar to the Treaty of Turkmenchay (link inserted).
Reza Bagheri, an architecture student in Tehran, said: ‘They are selling off the country. China will gobble up Iran. They [the Chinese] will plunder everything.’
When asked for any reasons for his comments, he said that he had not seen the proposed agreement yet but he was sure it would become a black stain in Iran’s history.
In contrast, Fahimeh Abbasi, an IT expert working with a company in Tehran, saw nothing wrong with acquiring Chinese capital and technology through the agreement.
Abbasi told MEE: ‘In a balanced relationship based on national interests, Iran can benefit greatly, especially now that Europe and the United States have withdrawn from the Iranian market.’
China wary of US
China’s relations with Iran have been complicated in the last couple of years by the renewal of US sanctions against the Islamic Republic, and there are signs it does not want to antagonise Washington.
The US announced its withdrawal from the Joint Comprehensive Plan of Action (JCPOA), also known as the Iran nuclear deal, on 8 May 2018, and has instigated a ‘maximum pressure’ policy against Tehran.
Deputy Foreign Minister for Economic Affairs Gholamreza Ansari has pointed out that China is currently the only country that buys oil from Iran. However, statistics show Beijing has sharply reduced such purchases and that its trade relations with Tehran have declined dramatically in recent years.
Esfandyar Batmanghelidj, a business diplomacy expert and the founder of Bourse & Bazaar, which reports on the latest developments in Iran, told MEE: ‘While China remains Iran’s sole remaining oil customer, despite US sanctions, China-Iran bilateral trade has been impacted by the Trump administration’s ‘maximum pressure’ policy.
‘Chinese exports to Iran, which include important intermediate goods for Iran’s manufacturing sector, have fallen from around $1.4bn per month in the first half of 2018 to around half that level in the last few months.’
Lack of trust in government
Iran’s economic problems, such as the unprecedented decline in the value of its currency, have made life very difficult for the majority of Iranians and added to public distrust of the government.
Addressing the reasons behind the plethora of negative reactions to the Iran-China cooperation plan, Hamidreza Azizi, a political commentator and visiting fellow at the German Institute for International and Security Affairs, told MEE: ‘When it comes to analysing this issue, it cannot be said with certainty that the majority of the people trust the West and distrust the East.
‘The main problem is the lack of trust domestically, not internationally. At the moment, the public concern is that China will be given an unusual privilege if the terms of the deal are not clearly defined.’
Other commentators have argued the reasons behind the negative reactions to the plan are rooted in history.
Sharareh Abdolhosseinzadeh, who holds a PhD in political sociology, told MEE: ‘In the history books in Iran, people constantly read that the kings handed over parts of the country such as Samarkand, Bukhara, Nakhchivan and the Caucasus, etcetera, in exchange for a loan, or the protection of the country against enemies.
‘The Iranian negative opinion of foreign countries, be it Eastern or Western, due to their plundering of national resources and interests, can justify their irrational and unusual reactions.’
Despite all the current controversy over the China-Iran plan, the final implementation of the deal may take months or even years of negotiations over its details.
An informed Iranian official told MEE: ‘This [draft] document contains nine clauses, each of which requires lengthy negotiations in order to become one or more treaties and agreements.
‘It also includes three basic, general and non-detailed aspects: comprehensive regional and international cooperation; defence and security cooperation, including the fight against terrorism and extremism; and comprehensive economic cooperation in the fields of energy, technology, infrastructure, transportation, etcetera.
Moreover, given China’s highly economy-oriented foreign policy, some commentators have argued it is hard to imagine that Beijing will agree to build strategic relations with a country like Iran, which is engaged in numerous tensions with its neighbours and major western powers.
China has already signed several agreements with Arab countries and has deepened its trade ties with the Middle East within the framework of its Belt and Road initiative, while it has made no significant progress in its ties with Tehran.
‘There is no doubt that the US’s aggressive foreign policy has led Beijing to develop more regional and international alliances than ever before, and to adopt a more active foreign policy, but at least economically speaking, China has broad ties with the West which cannot be sacrificed for the sake of Iran,’ said Azizi.
‘In other words, at both the societal and governmental levels, a meaningful development of relations with China is possible only if there is an overlapping strategy to improve ties with the West.’
‘Huge potential for growth’
Examining how China has treated Iran since the US administration adopted its ‘maximum pressure’ policy may shed some light on the issue.
Since 2018, China has purchased very little oil from Iran, trade relations between the two countries have fallen sharply, and Chinese companies are not present in the Iranian market for fear of the US sanctions.
Batmanghelidj told MEE: ‘Chinese firms, including state enterprises, are obviously wary of increasing their exposure to Iran at a time of significant tensions with the Trump administration.
‘The targeting of Huawei over its Iran operations has been a cautionary tale,’ he said, referring to the Chinese telecoms giant.
‘However, there is huge potential for growth in China-Iran trade, and at the time of a global economic slowdown, Iran may actually become a more attractive market for China.
‘There is no realistic scenario where China-Iran trade does not rebound in the medium-term.’ <source>
Iran’s foreign minister Mohammad Zarif paid a visit to his Chinese counterpart Wang Li at the end of August to present a road map for the China-Iran comprehensive strategic partnership, signed in 2016.
The updated agreement echoes many of the points contained in previous China-Iran accords, and already in the public domain. However, many of the key specifics of this new understanding will not be released to the public, despite representing a potentially material shift to the global balance of the oil and gas sector, according to a senior source closely connected to Iran’s petroleum ministry who spoke exclusively to Petroleum Economist in late August.
The central pillar of the new deal is that China will invest $280bn in developing Iran’s oil, gas, and petrochemical sectors. This amount may be front-loaded into the first five-year period of the deal but the understanding is that further amounts will be available in every subsequent five-year period, subject to both parties’ agreement.
There will be another $120bn investment in upgrading Iran’s transport and manufacturing infrastructure, which again can be front-loaded into the first five-year period and added to in each subsequent period should both parties agree.
Among other benefits, Chinese companies will be given the first refusal to bid on any new, stalled, or uncompleted oil and gas field developments. Chinese firms will also have the first refusal of opportunities to become involved with any petchems projects in Iran, including the provision of technology, systems, process ingredients, and personnel required to complete such projects.
‘This will include up to 5,000 Chinese security personnel on the ground in Iran to protect Chinese projects, and there will be additional personnel and material available to protect the eventual transit of oil, gas and petchems supply from Iran to China, where necessary, including through the Persian Gulf,’ says the Iranian source.
‘China will also be able to buy all oil, gas, and petchems products at a minimum guaranteed discount of 12pc to the six-month rolling mean price of comparable benchmark products, plus another 6pc to 8pc of that metric for risk-adjusted compensation.’
Under the terms of the new agreement, Petroleum Economist understands, China will be granted the right to delay payment for Iranian production up to two years. China will also be able to pay in soft currencies that it has accrued from doing business in Africa and the Former Soviet Union (FSU) states, in addition to using renminbi should the need arise—meaning that no US dollars will be involved in these commodity transaction payments from China to Iran.
‘Given the exchange rates involved in converting these soft currencies into hard currencies that Iran can obtain from its friendly Western banks—including Europäisch-Iranische Handelsbank [in Germany], Oberbank [in Austria] and Halkbank [in Turkey]—China is looking at another 8-12pc discount [relative to the dollar price of the average benchmarks], which means a total discount of up to 32pc for China on all oil, gas, and petchems purchases,’ the source says.
Another positive factor for China is that its close involvement in the build-out of Iran’s manufacturing infrastructure will be entirely in line with its One Belt, One Road initiative. China intends to utilize the low-cost labor available in Iran to build factories, designed and overseen by large Chinese manufacturing companies, with identical specifications and operations to those in China, according to the Iranian source.
The resulting products will be able to enter Western markets via routes built or enhanced by China’s increasing involvement in Iran’s transport infrastructure. When the draft deal was presented in late August to Iran’s Supreme Leader Ali Khamenei by Iran’s vice president, Eshaq Jahangiri—and senior figures from the Economic and Finance Ministry, the Petroleum Ministry and the Islamic Revolutionary Guard Corps—he announced that Iran had signed a contract with China to implement a project to electrify the main 900km railway connecting Tehran to the north-eastern city of Mashhad. Jahangiri added that there are also plans to establish a Tehran-Qom-Isfahan high-speed train line and to extend this upgraded network up to the north-west through Tabriz.
Tabriz, home to several key oil, gas, and petchems sites, and the starting point for the Tabriz-Ankara gas pipeline will be a pivot point of the 2,300km New Silk Road that links Urumqi (the capital of China’s western Xinjiang Province) to Tehran, connecting Kazakhstan, Kyrgyzstan, Uzbekistan and Turkmenistan along the way, and then via Turkey into Europe, says the Iranian source.
The pipeline plan will require the co-operation of Russia, as it regards the FSU states as its backyard. And, because, until recently, Russia was weighing a similarly all-encompassing standalone deal with Iran. So, according to the source, the agreement includes a clause allowing at least one Russian company to have the option of being involved, also on discounted terms, alongside a Chinese operator.
Benefits for Iran
The Iranians expect three key positives from the 25-year deal, according to the source. The first flows from China being one of just five countries to hold permanent member status on the United Nations Security Council (UNSC). Russia, tangentially included in the new deal, also holds a seat, alongside the US, the UK, and France.
‘In order to circumvent any further ramping up of sanctions—and over time encourage the US to come back to the negotiating table—Iran now has two out of five UNSC votes on its side. The fact that [Iran foreign minister Mohammad] Zarif showed up unexpectedly at the G7 summit in August at the invitation of France may imply it has another permanent member on the side,’ he adds.
A second Iranian positive is that the deal will allow it to finally expedite increases in oil and gas production from three of its key fields. China has agreed to up the pace on its development of one of Iran’s flagship gas field project, Phase 11 of the giant South Pars gas field (SP11). China National Petroleum Corporation (CNPC), one of China’s ‘big three’ producers, added to its 30pc holding in the field when it took over Total’s 50.1pc stake, following the French major’s withdrawal in response to US sanctions. CNPC had since made little progress developing SP11—a 30pc+ discount to the global market price on potential condensate and LNG exports could change that.
China has also agreed to increase production from Iran’s West Karoun oil fields—including North Azadegan, operated by CNPC, and Yadavaran, operated by fellow ‘big three’ firm Sinopec—by an additional 500,000bl/d by the end of 2020. Iran hopes to increase projected recovery rates from these West Karoun fields, which it shares with neighbor Iraq, from a current 5pc of reserves in place to at least 25pc by the end of 2021 at the very latest. ‘For every percentage point increase, the recoverable reserves figure would increase by 670mn bl, or around $34bn in revenues even with oil at $50/bl,’ the Iranian source says.
A final Iranian benefit is that China has agreed to increase imports of Iranian oil, in defiance of a US decision not to extend China’s waiver on imports from Iran in May. China’s General Administration of Customs (GAC) figures released in late August show that, far from reducing its Iranian imports, China imported over 925,000bl/d from the country in July, up by 4.7pc month-on-month, from an already high base.
The actual figure is still higher, according to the Iranian source, with excess barrels being kept in floating storage in and around China; without having gone through customs they do not show up on customs data but are effectively part of China’s Strategic Petroleum Reserve.
This story is ongoing and we will be update as developments are disclosed.