What is Iran saying about their agreement with China? - analysis
Attendees wave flags as Iranian Americans from across California converge in Los Angeles to participate in the California Convention for a Free Iran and to express support for nationwide protests in Iran from Los Angeles, California, U.S., January 11, 2020.
(photo credit: REUTERS/ PATRICK T. FALLON)
“This agreement is somewhat ambiguous, and on the other hand, in some cases, Iran has had bitter experiences in dealing with other countries. It has pros and cons.”
Iran is celebrating a new agreement with China. But what is inside the new 25-year plan? According to Fars News in Iran the agreement has been prepared within the framework of a plan for a long-term period of 25 years, and in this document, the parties have agreed on a roadmap and horizon of comprehensive relations in order to achieve a comprehensive strategic partnership and its practical promotion. “The document should be considered a political, strategic, economic and cultural program that pursues comprehensive aspects of relations in the long run,” the paper says.
“This agreement is somewhat ambiguous, and on the other hand, in some cases, Iran has had bitter experiences in dealing with other countries. It has pros and cons.” An agreement with a country that is the world's second largest economy and, according to the International Monetary Fund, the world's largest economy in the future, is never without merit, but considerations must be taken, the report states.
The agreement is a roadmap. “At the same time, the countries must be far-sighted so that in the future, these agreements do not lead to Iran's dependence on China, because according to the predictions, this country is moving towards the world power with great speed. The influence of such a country is not allowed in an Islamic country,” Fars says, based on a report from a local University.
What will happen is that there will be technology transfer. Chinese auto companies are one area where Iran could use support. “If Iran wants to make progress in the field of technology transfer, technology transfer should not wait for the other side, but before they enter long-term plans, and ground that it will be ready.” Iran also foresees industrial free trade zones. “As stated in the memorandum: Chinese investors are encouraged to invest in the free zones of Iran, especially Qeshm, Mako and Arvand. The truth is that these areas were created to attract foreign investors, but the infrastructure that exists in our free zones, unfortunately, has not been able to actively attract even domestic investment, which is a showcase for foreign investors.”
What is expected from Chinese companies? “Official statistics released by the UN Development and Trade Summit in 2016 show that Iran's free zones attracted an average of $3 billion and $250 million annually in foreign investment between 2010 and 2016. That means only two and a half percent of total foreign investment in the country.”
There will be a “new Silk Road (Great East-West Transit Corridor).” Iran wants better transportation and connection to transportation corridors. “At present, one of the country's main problems in this regard is the agreement with a country that strongly seeks to expand such infrastructure in the world (probably a 25-year Iran-China memorandum in the same direction), Iran's membership in the SCO and the presence of countries on the path between Iran and China, the allocation of loans by the Asian Infrastructure Development Bank, can help Iran build a strong and sustainable infrastructure,” Fars says.
“One of the most successful examples of corridors is the China-Mongolia-Russia economic corridor, or so-called. Since Mongolia is a landlocked country with Russia closest to it, most of their dealings were with Russia. China annexed Mongolia with the Belt and Road Initiative, paving the way for Chinese and Mongol traders. Mongolia currently has more relations with China than Russia,” the report says.
Iran seeks a strategy now in the wake of the agreement. “A country that does not have the scientific infrastructure and technology to acquire knowledge cannot have the effective interactions with the contracting party.”
Iran is also pleased to see reports in Bloomberg and elsewhere about the importance of the deal. Iranian President Hassan Rouhani expressed hope that in 2021 the trade deficit between the two countries will be compensated for last year, noting: "We are interested in China continuing to be a major trading partner with Iran and to have more cooperation in the field of joint ventures." Regarding Tehran-Beijing bilateral cooperation, the Chinese Foreign Minister said in the meeting: "China has always attached great importance to this issue and has tried to make this issue a priority in its relations with Iran, despite some issues….China has always opposed the US extravagance and unilateral sanctions and has shown its opposition in the international arena," he said, adding that "maximum pressure is an illegal and inhumane act,” according to Tansim news.
Tasnim also reports that this 25-year document is officially registered as the "Iran-China Comprehensive Cooperation Program" and covers the political, security, defense, cultural, agricultural, economic, scientific, tourism, oil and energy, telecommunications infrastructure and communication technology, trade, health and other details. “Some clauses refer to the facilitation of investment and finance, and some clauses refer to mutual political support in international forums. In the military and defense fields, issues such as training, transfer of defense technologies, counter-terrorism and joint exercises have been discussed. One of the most important points of this document is the agreement on trade in national currencies,” the report notes.
The document also repeatedly mentions China's grand plan called "One Belt-One Road" (a plan along the Silk Road) and that Iran can benefit from the economic benefits and lending fund of this plan while actively participating in it. China will be a regular importer of oil from Iran, and Iran must address China's concerns about the return on its investment. “The promotion of banking, financial and insurance cooperation and the opening of branches of Iranian banks and the establishment of a joint bank of Iran and China, especially the creation of national messengers between the two countries instead of Swift have been discussed,” the Tasnim report notes.
Next will come support for railway construction and also movement of fossil fuels. Beaches will be developed and 5th generation internet services. Clean energy will be increased and also “helping to develop the peaceful nuclear industry of our country and investing in providing metro and subway lines in major cities and the new cities of Iran are among the important parts of the document,” the report notes. Talks began more than five years ago and the signing of the "Comprehensive Cooperation Program between the Islamic Republic of Iran and the People's Republic of China", which took place on April 27, in Tehran, should be considered a step towards advancing the "Look East" strategy, which in addition to economic, political and security benefits The Islamic Republic of Iran has side effects that can help Tehran even in confrontation or interaction with the West, Tasnim asserts. “The 25-year Iran-China Cooperation Document, and efforts to extend long-term Iran-Russia cooperation, could be effective steps in advancing East-facing policy, but it should be noted that East-facing is not limited to China and Russia.” Today Iran is looking east, the Iranian media argues. “In other words, countries that Washington does not see or define in its circle of friends can be on the Eastern Front.” This new front will aid Iran, the Iranian pro-regime media believe.