Iran and China have signed a 25-year agreement as the Islamic Republic continues to fight for decades to prove the resilience of its economy against US sanctions.
On Saturday, Iranian Foreign Minister Mohammad Javad Zarif and his visiting Chinese counterpart Wang Yi signed the agreement.
Details of the deal were not released and it was not clear how much it changed from the 18-page draft – as seen by last year’s Financial Times – which did not indicate any strategic change in Iran’s foreign policy.
The draft includes co-operation in promoting Iran’s role in China’s Belt and Road Initiative, from energy, petrochemicals and nuclear power to high-tech and military projects, as well as maritime projects. There is no information about Iran’s investment in China.
“This agreement is bound to enhance relations with China and change the nature of the business because Chinese companies will now invest with more confidence than in Iran,” said a business executive close to Iran’s hardline forces.
“A lot of light in different sectors, especially the energy sector, will become green for Chinese companies. It also shows in the United States that Iran is no longer tied to sanctions. ”
China enjoyed growing trade with Iran in the early 1990s, and partly because of US sanctions, it has become Iran’s most important trading partner, helping to end Germany’s 30-year dominance.
China has become a lifeline for Iran’s economy despite cuts in oil imports after Donald Trump pulled the United States out of a 2015 nuclear deal signed by Tehran with major powers, including China.
During the meeting with Zarif Wang, he called China a “friend in difficult times” and thanked Beijing for “taking steps in the face of unjust sanctions.”
Chinese products were supplied to Iranian markets, from machinery and spare parts to clothing, toys and stationery stores, despite strict restrictions under the Beadon administration.
A senior official told the Financial Times earlier this month that Iran’s oil exports to China had been rising “for some time” and that Washington had told Beijing it would enforce Trump-era sanctions.
During the Iranian year ending March 20, the country’s total trade volume was $ 73 billion, with China being the top partner, according to the customs administration.
Iran’s exports from China reached ৯ 8.9 billion and imports from China stood at $ 9.6 billion.
These figures do not include a substantial number of Chinese products exported from other destinations.
However, increasing the volume of trade in the multimillion-dollar project and the full implementation of any future agreement with China will depend on negotiations with the new administration in the United States and the lifting of sanctions, according to trade statistics.
Meanwhile, Iran’s business statistics say that China has not proved reliable in the big deal and they fear that history may repeat itself despite the new deal.
China National Petroleum Corporation signed an agreement in 2009 to develop the South Azadegan oil field after Japan withdrew its Inpex. Iran canceled the deal due to alleged poor performance and delays.
CNPCO signed a multibillion-dollar deal at South Pars Gasfield after a total of France threatened a total U.S. embargo, but later abandoned the project. For the same reason.
Saturday’s agreement marks the end of President Xi Jinping’s visit to Iran in 2010, following the implementation of the nuclear deal. He met with Supreme Leader Ayatollah Ali Khamenei, who praised the 25-year partnership as “more cooperation between independent states.”
The Iranian people, however, were shaken by the prospect of an agreement last year and took to social media to urge Hassan Rouhani’s government not to sign it, which was like selling the country to many. Analysts say signing documents on the Persian New Year’s holiday and refusing to divulge details could avoid public criticism.
The Chinese foreign minister has been on a week-long regional tour since Wednesday. He has toured Saudi Arabia, Turkey and Iran, from where he will continue to the United Arab Emirates, Oman and Bahrain.