In the aftermath of the Trump administration’s withdrawal from the Iran nuclear deal (JCPOA) last year and the return of the sanctions regime, which forced European companies to leave the Iranian market, China seems to have come out of the situation as the biggest winner. In recent weeks, the Iranian Foreign Minister, Javad Zarif, has been talking about a Sino-Iranian ‘25-year Roadmap’, which seems to have come to initial materialisation in recent days.
Following the 2015 Iran nuclear deal, the two countries finalised a Comprehensive Strategic Partnership in 2016, which they have now updated and fleshed out in a significant fashion. The update includes a massive long-term investment by China in Iran, amounting to a total of $400bn, to be mostly, around $280bn, spent on the Iranian energy sector. Another $120bn is to be spent on the Iranian transport and manufacturing sectors. If executed according to this updated strategic plan, this investment will have a seismic impact on the global energy market. The investment in the transport sector will also reconfigure regional and by extension Eurasian geo-economics, as Iran will be even better positioned to be a link between China and Europe. Needless to say, this will make both countries more significant from a geopolitical perspective as well.
Iran is very content with the prospect of this massive investment given the fact that in the aftermath of the reintroduction of the sanctions, the Iranian economy, market, and currency have been under severe pressure. However, in return for this investment, Iran has made significant concessions including the following: ‘In return for making the capital available, Chinese companies will be given first refusal on oil and gas projects. For its part, Iran is hoping to improve its diplomatic and economic position, and to restart a number of energy projects that were stalled by the re-imposition of US sanctions last year, such as the giant South Pars gas field'
[China “pledges $400bn” to develop Iran’s energy, transport and manufacturing sectors].
M. Forough
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