THE Petroleum Economist of Sept 3 reported that China has agreed to
invest up to $290 billion in the development of Iran's oil, gas and petroleum
sectors, and another $120bn in its transport and manufacturing infrastructure.
This is a calculated kick aimed at America's strategic objectives.
to the report, China will have the first right of refusal on all projects in
Iran and a 12 per cent guaranteed discount on energy imports from there. China
will provide the "technology, systems, process ingredients and personnel
required to complete such projects" including "up to 5,000 Chinese security
personnel on the ground to protect Chinese projectsâ€¦."
agreement to so massively finance Iran's development is an extension of its
Belt and Road Initiative. It is also an 'in your face' response to America's
aggressive trade, technology and military moves against China over the last
year. It will prick the balloon of the US strategy of 'maximum pressure' against Iran designed to bring the latter to its knees economically and oblige
it to accept additional constraints on its nuclear and missile programs (beyond
the JCPOA) and curb its politico-military ambitions in the Middle East. In
entering this agreement, China has announced that it is not intimidated by the "secondary sanctions" which the US has threatened to impose on companies and
countries which continue economic relations with Iran in defiance of America's
unilateral sanctions against Iran.
can import virtually all of Iran's oil and gas production. This could increase
Iran's oil exports manifold from 200,000 barrels per day at present to its full
capacity over 4-5 million bpd. China's energy giants - CNPC, CNOC, Sinopec - can rapidly expand Iran's oil and gas production from existing and new fields.
Iran will not need other markets, such as India which has halted oil imports
from Iran in compliance with US sanctions.
considerable part of Iran's gas could be exported via the existing
Turkmenistan-China gas pipeline and new oil pipelines can be constructed on the
same route. This will significantly diminish the threat of a US/Western
maritime energy blockade against China or Iran. Further, China's reliance on US-friendly
energy suppliers in the Gulf (Saudi Arabia, UAE) and East Asia (Indonesia,
Brunei) will be dramatically reduced since it could meet all or most of its
requirements from Iran and Russia.
transport infrastructure which China plans to build in Iran, including
high-speed rail on several routes, will provide Beijing with additional avenues
for its trade - overland trade through Iran and Turkey to and from Europe and
maritime trade through Iranian ports (including, ironically, the hitherto Indian-sponsored
port of Chahbahar) to the Middle East, Africa and beyond.
economic partnership with China will supplement its current close security ties
with Russia and alter Middle East power equations. China will acquire
considerable influence over Tehran's nuclear and security policies, adding to
its leverage with the West including the US. On the other hand, Iran's
reinforced 'strategic' partnership with China will considerably enhance its
capacity to promote its policy objectives in Yemen, Iraq, Syria, Lebanon and
Afghanistan. Iran may also feel sufficiently emboldened to retaliate robustly
to Israel's frequent strikes on its military assets and militia affiliates in
Syria, Lebanon and Iraq.
Yemen, Iran is now playing a more open role to promote a political settlement
which accommodates the Houthis. The Arab coalition has been weakened by an
unsuccessful military campaign, internal differences and US and Western
criticism of the human cost of the conflict.
Syria, President Bashar al-Assad has clearly won the civil war against the
Western Gulf coalition with the support of Russia and Iran. Once its economy is
stabilised, Iran could play an even more robust role not only in Syria but also
Iraq and Lebanon.
and China may also enhance their influence in Afghanistan. Donald Trump has
declared that the agreement with the Taliban is 'dead' - at least for now. The
most significant provision of this agreement was not the withdrawal of 5,000
American soldiers but the Taliban's acceptance of the continued presence of
8,600 US 'counterterrorism' forces. These troops would prolong US capacity for
force projection within and across Afghanistan's borders. Now, it is possible
that the Afghan Taliban, perhaps at Iran's instance, may no longer accept the
rump US presence in a revived deal.
Iran partnership would supplement and reinforce its long-standing strategic
participation with Pakistan. Obviously, Beijing wants strategic relationships
with both. However, the Iranian partnership offers China another strategic 'window' besides CPEC and insurance against possible US or Indian disruption of
the China-Pakistan corridor. Moreover, over time, the Sino-Iran economic
partnership could add a security and military dimension.Western pundits often
speak of a Chinese naval base in Gwadar. In fact, it could well appear in
is running out for India to make a strategic choice between an 'Asian Order',
combining China, Russia, Iran, Pakistan, Turkey and Central Asia under the SCO
and the BRI, or an alliance with the US and participation in its 'Indo-Pacific' strategy. So far, India has had the best of both worlds. It is building an
alliance with the US to emerge as China's Asian 'equal' and establish its
domination over South Asia and the Indian ocean. Yet, India pleads for US 'strategic altruism' to enable it to preserve its traditional arms supply
relationship with Russia and its growing trade and investment cooperation with
China. As the Sino-US global confrontation intensifies, the strategic space for
India, and others, to manoeuvre between the two global powers will become
progressively narrow. China's forthright support to Pakistan on occupied
Kashmir is an early indication of the emerging alignments.
far, despite Trump's hostile trade tariffs, technology restrictions and
military pugnacity, China has kept open the option of reverting to a 'win-win' cooperative relationship with the US. But, a firm consensus seems to have
emerged in Washington that China is America's primary rival and threat to its century
of global dominance and that China's further rise can and must be stopped by a 'whole-of-government' strategy of comprehensive containment and confrontation.
China appears to have picked up the gauntlet. A titanic clash is in the offing
across the world.
The writer is a former Pakistan ambassador to the UN.