China and Iran have reportedly entered into an economic and security agreement. According to its terms, the agreement would see China invest around US$400 billion ($553 billion) in Iran over the next 25 years. If that level of investment does actually take place, it would under cut the Trump Administration’s policy of “maximum pressure” on Iran in order to isolate the ruling theocracy. China’s investments would be in Iran’s seaport, railways, telecommunications and financial sectors. The eighteen-page agreement also specifies [in Farsi] security co-operation between the two countries, including joint military exercises, intelligence sharing and weapons development to fight ‘the lopsided battle with terrorism, drug and human trafficking and cross-border crimes’. Iran would give China, in return, a discounted supply of oil over the period of the agreement.
It was likely the Iranian theocrats who leaked some of the terms of the agreement in order to demonstrate to ordinary citizens that, despite the economic ravages that they suffered because of the US sanctions that were imposed, in turn, because of the ayatollahs’ intransigence, Tehran was able to find a way out of that economic morass. While that move is unlikely to absolve the ayatollahs in the perception of many Iranians for their sheer ineptitude, Tehran has indeed bought itself some time. The more pressing question now is, at what cost?
Read the article by Lindsay Hughes, Senior Research Analyst, Indo-Pacific Research Programme in Future Directions International.