The Comprehensive Strategic Partnership:
On March 27th 2021 China signed a 400$ billion contract with Iran, further developing their Comprehensive Strategic Partnership. The Partnership will provide Iran with Chinese investments in the energy, banking, telecommunications, infrastructure and technology sectors. Moreover, this will be the start of a new military partnership, composed of joint military training, weapon development, intelligence sharing. Giving China a foothold in the Middle East.
How will China benefit from it?
The deal is of great importance to China as it will provide economic safety and worldwide political influence. It is widely known that oil is the blood of the modern industry, but China has been suffering from its restriction for a long time. Compared to the US and Japan, whose oil stockpile can sustain for over 100 days without importation, China has not even reached the safety line for 90 days.
Additionally, China relies heavily on imported oil for more than 70% because the country does not have the necessary infrastructure and devices to extract its own oil.
By signing the contract with Iran, China can have a regular and stable oil supply to provide sufficient resources for further development. Moreover, this treaty also signifies a great progress for the Belt and Road. The oil will be traded in RMB rather than USD, challenging the US global hegemony.
A challenge for the USA
Moreover, the treaty will also increase China’s impact in political aspects globally. Though China has stated that the deal does not mean to defy any other countries or form any alliances. This contract still shows China’s ambition in playing more active roles in international issues. One article in the New York Times says this deal would create new flashpoints with the US and give Iran more power to go against America. Apart from it, Wall Street Journal writes, China Signs 25-year Deal with Iran in Challenge to the US. The concerns of the US are crystal clear to see from its media’s topic. However, we are yet to see whether China covers its real attempt behind the action or the US exaggerates China’s threat. However, what we can now know with absolute certainty is that China has expanded its sphere of influence to the Middle East.
How will Iran benefit from it?
In addition, Iran is going to benefit greatly from this pact. Iran has long been sanctioned by western countries, particularly the US. As one of the biggest oil producers in the world, Iran has a limited exporting amount due to the sanctions leading to a weak economy. Moreover, except for oil, Iran has little competitiveness. Therefore, Iran is in huge need of international help for different aspects of the country’s needs such as in building infrastructure or boosting the economy through exportation. This treaty will provide Iran with all of the mentioned above.
However, as Iran agrees to this pact, many questions emerge regarding the future problems Iran might face by having signed a treaty of this calibre with the Asian giant. Will the Iranies collaborate? Will the construction go fluently if Iranians do not consent to it? Will the Chinese Government be able to afford this massive investment?
Overall, the cooperation between China and Iran is mutually beneficial to its national security and people’s daily life. Meanwhile, their political power may also rise globally since they have more bargaining chips when facing the west. Nevertheless, the deal is only at its very first stages. However, we can now know that this pact will inflict a change in the international political order.