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The New Arab Staff

China and Iran proceed with $400 billion deal despite US opposition

Iranian Foreign Minister Javad Zarif speaks with Chinese counterpart Wang Yi [Getty]

Date of publication: 14 July, 2020

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Beijing and Tehran are likely to go ahead with a far-reaching, 25 year deal despite staunch US opposition.
Iran and China are set to make an unprecedented deal that will pave the way for major investment from Beijing into sectors of the Iranian economy, a move strongly opposed by the United States.

Iran Foreign Minister Mohammed Javad Zarif said during a parliamentary session last week that his government is "with confidence and conviction" in negotiations with China over a 25-year strategic partnership that could involve some $400 billion in Chinese investment.

Details of the accord surfaced in an 18-page leaked document online, The Washington Post reported.

Such a pact could change the nature of the relationship between Iran and China, bringing the two countries closer.

Beijing and Washington have been locked in a trade war, whilst the latter has reimposed crippling sanctions on Iran after the Trump administration broke from the 2015 nuclear deal.

The pact between the two countries would bring them close together politically and economically.

It would increase intelligence-sharing and security cooperation, including missions in Syria and Iraq.

Iran would also see Chinese investment in Iranian railroads, ports and telecommunications, as well as providing China with discounted Iranian oil supply for the next 25 years.

US sanctions

Earlier this month, US Secretary of State Mike Pompeo urged the United Nations Security Council (UNSC) to extend an arms embargo on Iran before it expires in October, signalling an increasingly hostile relations between the two countries.

Secretary of State Mike Pompeo circulated a draft resolution to the 15-member council that would indefinitely extend the arms embargo on Tehran.

Russia and China - who both frequently back Iran against the US at the UN - have already expressed their opposition to the resolution and will likely veto an extension of the arms ban.

"Don't just take it from the United States, listen to countries in the region. From Israel to the Gulf, countries in the Middle East - who are most exposed to Iran's predations - are speaking with one voice: Extend the arms embargo," Pompeo told a virtual Security Council meeting.

Washington has steadily ramped up pressure on Iran over its civilian nuclear power developments, which the US and Israel allege is cover for a weapons programme.

Speaking of US' intention to extend the arms embargo, Russia's UN Ambassador Vassily Nebenzia called the policy "a maximum suffocation policy".

With the sanctions in place, China could prove vital to Iran’s failing economy.

"At a time when the United States is reeling from recession and the coronavirus, and increasingly isolated internationally, Beijing senses American weakness," wrote reporters Farnaz Fassihi and Steven Lee Myers.

"The draft agreement with Iran shows that unlike most countries, China feels it is in a position to defy the United States, powerful enough to withstand American penalties, as it has in the trade war waged by President Trump."

The deal, whilst in the works, is not guaranteed.

When asked about it by reporters last week, Chinese Foreign Ministry spokesman Zhao Lijian offered a customarily anodyne response.

"China and Iran enjoy traditional friendship, and the two sides have been in communication on the development of bilateral relations," he said.

"We stand ready to work with Iran to steadily advance practical cooperation."

In Iran, officials worry that such a deal was being forged in secret.

Last month former president Mahmoud Ahmadinejad in a speech warned that the pact was being discussed "away from the eyes of the Iranian nation", a claim Foreign Minister Javad Zarif denied.

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