The partnership clears the way for billions of dollars of Chinese investment in energy banking, telecommunications, ports, railways and dozens of other infrastructure projects in return for a regular and heavily discounted supply of Iranian oil for the next 25 years.
We stand ready to work with Iran to steadily advance practical co-operation
The pact also covers military co-operation and gives China a foothold in the volatile Middle East as well as joint training and exercises, joint research and weapons development and intelligence sharing.
Chinese foreign ministry spokesman Zhao Lijian said: “China and Iran enjoy traditional friendship, and the two sides have been in communication on the development of bilateral relations.
“We stand ready to work with Iran to steadily advance practical co-operation.”
China and Iran are on the verge of signing a defence pact
The expansion of military assistance, training and intelligence-sharing will set alarm bells ringing across Washington.
Security analysts fear the partnership will create dangerous flashpoints between China and the US as relations continue to deteriorate.
US warships already tangle regularly with Iranian forces in the crowded waters of the Persian Gulf and challenge China’s internationally disputed claim to much of the South China Sea, and the Pentagon’s national security strategy has declared China an adversary.
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The deal gives China a foothold in the Middle East
The partnership was first proposed by Chinese President Xi Jinping during a visit to Iran in 2016 and has now been approved by President Hassan Rouhani’s cabinet.
It is also a major blow to Donald Trump’s aggressive policy toward Iran since it abandoned the nuclear deal reached in 2015 by President Barack Obama and the leaders of six other nations including Britain, France and Germany.
Iran is one of the world’s largest oil producers but its lucrative exports have plunged since Washington’s reimposed sanctions started to bite in 2018.
The defence deal has set alarm bells are ringing in Washington
China has a massive appetite for oil and guzzled more than 10 million barrels a day last year with 75 percent being imported from abroad.
And with the US reeling from recession, the coronavirus pandemic, political uncertainty and increasingly isolated international position, Beijing senses weakness in Washington.
Analysts said the draft agreement shows China feels it is in a position to defy the US and remains powerful enough to withstand American penalties.
Ali Gholizadeh, an Iranian energy researcher at the University of Science and Technology of China in Beijing, said: “Iran and China both view this deal as a strategic partnership in not just expanding their own interests but confronting the US.
“It is the first of its kind for Iran keen on having a world power as an ally.”
A US State Department spokeswoman said: “The United States will continue to impose costs on Chinese companies that aid Iran, the world’s largest state sponsor of terrorism.
“By allowing or encouraging Chinese companies to conduct sanctionable activities with the Iranian regime, the Chinese government is undermining its own stated goal of promoting stability and peace.”
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Largest militaries in the world
Iranian supporters of the strategic partnership say the deal with China could provide a lifeline to a strife-torn nation of limited economic options and a free-falling currency.
Former diplomat Fereydoun Majlesi said: “Every road is closed to Iran.
“The only path open is China. Whatever it is, until sanctions are lifted, this deal is the best option.”
But critics fear Tehran is secretly “selling off” the country to China in a moment of economic weakness and international isolation.