HOW THE CHINA & IRAN ECONOMIC-SECURITY DEAL ENDANGERS INDIA'S STRATEGIC INTERESTS IN MIDDLE EAST

[Daniel808]

How the China-Iran economic and security deal endangers India’s strategic interests in the Middle East

• The deal, which throws Iran a vital lifeline and gives China access to Iran’s hydrocarbon reserves, imperils India’s strategic stake in the Chabahar port project

Neeta Lal
Published: 10:30am, 29 Jul, 2020

Chinese President Xi Jinping is welcomed to the presidential palace in Tehran by Iranian President Hassan Rowhani on January 23, 2016. The foundations for the China-Iran trade and military deal were laid during this visit. Photo: EPA

The announcement of a spectacular economic and security partnership deal between China and Iran – the foundation of which was laid during Chinese President Xi Jinping’s visit to Iran in 2016 – has set off alarm bells around the world, including in New Delhi and Washington.

An 18-page draft agreement spells out an outlay of Chinese investments worth US$400 billion into the Iranian economy over 25 years. Of this, US$280 billion will be funnelled into the oil and gas sector and the remaining US$120 billion into other core sectors including banking, telecommunications, ports and railways. In return, China will get a steady supply of Iranian oil at a heavily discounted rate for 25 years.

The deal serves both countries well. Iran’s sanctions-stifled economy, reeling under the US’ “maximum pressure” policy over its nuclear programme, is in desperate need of resuscitation. And the deal throws it a vital lifeline. For China, facing international opprobrium over its aggressive political and military manoeuvres – pushing further into the South China Sea to the alarm of littoral states, tightening control over Hong Kong, and taking on India in Ladakh in the high Himalayas – the deal with Iran is an opportunity to establish a firm foothold in the Middle East.

Iran’s vast military and hydrocarbon reserves will be a valuable asset to Beijing, in that they can help fuel its expansionist global projects. Both countries are also on the same page in their zeal to shake up a US-centric international order. Viewed in this light, the deal cocks a snook at Western – specifically American – economic and geopolitical might.

The Soroush oilfields in the Persian Gulf are one of the largest in Iran. The China-Iran oil deal offers Beijing a hefty discount on oil purchases. Photo: Reuters

For India though, the deal raises some critical concerns. Especially disquieting is the pact’s overarching military dimension, which calls for joint training and exercises, joint research and weapons development and intelligence sharing “to fight the lopsided battle with terrorism, drug and human trafficking and cross-border crimes”. In an already fraught region, hosting nuclear-armed neighbours (China and Pakistan), this development will be a challenge for Indian Prime Minister Narendra Modi’s government.


The Iran-China partnership also imperils India’s strategic stake in the Chabahar port project in the Sistan-Balochistan province on Iran’s southern coast which Delhi has been developing with Iran and Afghanistan under a trilateral agreement since 2019.

Hailed as “a strategic game-changer”, Chabahar’s location as a gateway to the Indian Ocean makes it an ideal and lucrative regional shipping hub. It also offers India a geopolitical vantage point from which to keep an eye on Pakistan’s Gwadar port. Located barely 90km away, Gwadar is being developed by Beijing as the pivot of its investment in rival Pakistan and a key juncture in its
Belt and Road Initiative
.
However, by tying up with Iran, China has gained an upper hand in influencing affairs in Chabahar too. Worse, the development comes on the back of emerging fissures in Iran-India bilateral relations. New Delhi’s tardy progress on Chabahar’s construction – due to US sanctions – is frustrating Iran.


Delhi has been unable to find a partner company to run its operations at the port as investors and port management companies are wary of operating in Iran, fearing US arm twisting. Uncertainty over Chabahar’s future has thus jeopardised India’s economic and geostrategic interests in the region.

Adding to the bilateral strain is Tehran’s disappointment over India’s decision to stop purchasing Iranian oil. Earlier, despite several rounds of economic sanctions placed on Iran by the US, India continued to buy oil from Tehran because it never followed unilateral sanctions. However, it reversed that decision in light of US President Donald Trump’s coercive tactics.


Though Iran didn’t express its displeasure directly to India, it has made it clear in subtler ways. For example, India’s efforts to mobilise international support against Beijing for its recent transgressions in the Galwan Valley of Ladakh garnered no support from Iran.

The souring of the bilateral relationship is a loss to both. Civilisational ties form the bedrock of Iran and India’s friendship. The two are natural partners with convergences on several geostrategic and economic matters. Since the 1990s, they have also worked to promote bilateral trade, security, connectivity and people-to-people contacts. The signing of a comprehensive defence cooperation agreement added further ballast to ties.

The Sino-Iranian tango couldn’t have come at a worse time in India’s political sphere. The country is grappling with the double whammy of Covid-19 cases soaring to the third-highest in the world and a fraught economic environment, which might result in its economy contracting anywhere from 5 per cent to 10 per cent, the biggest reversal in four decades.

Given these dynamics, Delhi will be treading a fine line in balancing relations with Washington, Beijing and Tehran while striving to augment its political influence in the Middle East. Embracing one country at the cost of the other is not an option. A multilateral foreign policy approach is India’s best bet.

Even so, Delhi might want to wait for the results of the November US election to plan its next big move on Tehran. With Joe Biden as president, the Iran issue may take a back seat. However, if Trump is re-elected, an unenviable diplomatic tightrope act awaits Modi.

Neeta Lal is a Delhi-based editor and columnist

https://www.scmp.com/comment/opinio...n-economic-and-security-deal-endangers-indias

 

[Daniel808]

This article written by indian with all of their propaganda.


But this article, give us an insight of Indian view of China-Iran Strategic $400 Billion Economic & Security Deal

 

[Daniel808]

China, Iran deal eyes a future decoupled from US
Cooperation pact will put Iran firmly on China's Belt and Road Initiative and promises to change the region's strategic calculus
By KAVEH AFRASAIABIJULY 10, 2020

Chinese President Xi Jinping and Iranian President Hassan Rouhani in a file photo. Photo: Facebook


In recent weeks, Iran and China have been hammering out the details of a potentially momentous cooperation deal meant to span the next quarter-century and chart a future decoupled from the United States.

Under the terms of a draft viewed by Asia Times, China will invest tens of billions of US dollars in Iran as part of Beijing’s ambitious Road and Belt Initiative. The 25-year agreement includes economic, security, and military dimensions.

Such a deal is particularly important for Iran’s ailing energy sector, which is in dire need of substantial investment to refurbish an aging oil industry, which requires upwards of $150 billion for much-needed modernization of wells, refineries and other infrastructure.

The negotiations are ongoing, even as the Donald Trump administration continues to pin hope on Iran’s economic strangulation by a unilateral maximum pressure strategy and against the backdrop of growing US-China rivalry.

If approved by the Iranian parliament, the plan represents a major affront to the Trump administration’s relentless pursuit of Iran’s economic isolation in the international community. As expected, news of the China-Iran agreement has set off a chorus of condemnation in the West.

According to the UN report, the drone attack violated Iraq’s sovereignty and in turn has “institutionalized” Iranian hostility toward the US, making it nearly impossible for any Iranian official to engage in direct diplomacy with the Trump administration. That’s particularly true since Iran’s new parliament led by hardliners commenced its work.

Combination image shows US President Donald Trump and President Hassan Rouhani. Photo: AFP /Nicholas Kamm / Handout
President Hassan Rouhani’s moderate government is about to enter a lame-duck period prior to the presidential elections in 2021, making it less and less capable of any major foreign policy initiatives.

Some analysts in Iran contend that there is still a narrow window of opportunity for a new Tehran-Washington deal, prompted partly as a reaction to the amentioned Tehran-Beijing agreement.

Given Iran’s post-revolutionary position of “superpower equidistance,” the agreement with China reflects a “new look East” approach by Tehran while under Washington’s pressure. At the same time, it serves the opposite logic of a “new look West” for the sake of navigating the treacherous currents of a new cold war in favor of equilibrium.

That assumes, of course, that Washington is willing to ease its persistent sanctions and threats. That remains to be seen. Meanwhile, the recent spate of suspicious fires and sabotage at the Natanz nuclear facility and Parchin military complex will embolden Iran’s hardliners, who see no ground for optimism of a possible US policy shift.

They see China’s steadfast defense of Iran at the UN Security Council as a testament to Beijing’s reliability. Iranian hardliners are also cognizant of their country’s ability to serve China’s BRI, not only for the 80 million-strong Iranian market but the larger Eurasian landmass encompassing some 4.6 billion people.

Kaveh L. Afrasiabi is an Iranian-American political scientist and author or co-author of several books on Iranian foreign policy

https://asiatimes.com/2020/07/china-iran-deal-eyes-a-future-decoupled-from-us/


From Iranian point of view

 

[Daniel808]

China Signs Series Of Deals To Develop Supergiant Oilfield In Iran

By Simon Watkins - Jul 27, 2020, 6:00 PM CDT

Two key questions logically arise from last week’s announcement from Iran’s Petroleum Ministry that it has awarded a US$1.3 billion development deal to more than double oil production at the supergiant South Azadegan oilfield, the second such oil project signed this month, the other being a US$300 million development contract for Yaran. The first question is, given the fact that Iran is technically bankrupt, how can it afford such projects? The second is, given the swingeing U.S. sanctions still in place – including against the main tanker fleets of the National Iranian Tanker Company and the Islamic Republic of Iran Shipping Line – where is any of this increased oil supply meant to go? The answer to both questions is the same – China – and precisely what is going on is analysed below. Firstly, Iran’s finances are arguably the worst they have ever been, due to the U.S.’s re-imposition of sanctions in 2018, following its unilateral withdrawal from the Joint Comprehensive Plan of Action in May of that year. Using a comparison benchmark of November 2019, as of a week ago, Iran’s GDP growth is minus 22 percent, unemployment is around 37 per cent, inflation is over 65 per cent, and the rial has depreciated at least 65 percent to date over that period against a basket of core global currencies. Iran is also currently running a budget deficit of 80 per cent, and a trade balance of negative US$6.5 billion.

With little prospect of the U.S. lifting its sanctions against Iran any time soon, and any country that uses the U.S. dollar significantly in the trade transactions of itself or its corporations having little choice but to abide by these sanctions, it can well be argued that Iran had little choice but to go with where the money is, which is China. Consequently, as uncovered by OilPrice.com, Iran last year signed a 25-year deal with China that publically just reiterated the key elements of a very vague co-operation deal that was agreed in 2016 but privately included a collection of highly-specific deals across many business sectors, most notably including oil and gas.


Aside from the new military element added in recently – also uncovered by OilPrice.com - the oil and gas industry part of the 25-year deal means that in exchange for at least US$400 billion from China, Chinese companies will be given the first option to bid on any new – or uncompleted – oil, gas, and petrochemicals projects in Iran. China will also be able to buy any and all oil, gas, and petchems products at a minimum guaranteed discount of 12 per cent to the six-month rolling mean average price of comparable benchmark products, plus another 6 to 8 percent of that metric for risk-adjusted compensation. Additionally, China will be able to pay in soft currencies accrued from doing business in Africa and Former Soviet Union states. Given the exchange rates involved, China is looking at another 8 to 12 percent discount, which means a total discount of around 32 per cent for China on all oil, gas, and petchems purchases.

With this deal now exposed, the two countries are constrained in being able to just roll-out the pieces of deal with impunity. Aside from the public reaction on the ground in Iran, Tehran is concerned about an even harsher backlash from the U.S., either more sanctions, or less tangential measures. China, meanwhile, is not only in the midst of the ongoing Trade War with the U.S. but is also having to deal with the fallout of a range of corollary issues now springing up from Washington. Most recently these include the U.S.’s sanctioning of China over its alleged human rights violations against Muslim minorities in Xinjiang and the extension of U.S. sanctions against China’s flagship technology company, Huawei, over cyber-espionage and technology theft concerns.

“It’s one thing for China to ignore all sanctions that the U.S. has imposed on importing Iranian oil and gas, but it’s quite another thing for it to blatantly put its major state companies on the ground in Iran right now, when tensions are so high,” a senior oil and gas industry source who works closely with Iran’s Petroleum Ministry told OilPrice.com last week. “The working template for such deals to go ahead with Chinese companies without attracting too much attention from either the Iranian public or the U.S. State Department is for Iran to begin by making a field development award to a plausible-sounding Iranian development firm [in South Azadegan’s case the US$1.3 billion contract was awarded to Iran’s Petropars, and in Yaran’s case the US$300 million contract was given to Iran’s Persia Oil and Gas Industry Development Co.],” the source said.



“Then the Iranian firm quietly awards a series of very dull-sounding ‘contract-only’ projects to a number of firms virtually no one has heard of – but all controlled by the big Chinese firms - and China is back in business as the de facto developer,” he added. “Exactly the same method has been used by China recently to expand into Iraq’s Majnoon field and into its West Qurna-1 field,” he underlined. In precisely this context, China National Petroleum Corporation (CNPC) subsidiary, China Petroleum Engineering & Construction Corp (CPECC), was awarded a US$121 million engineering contract late last year for West-Qurna-1. Just before that, China’s Hilong Oil Service & Engineering Company was awarded a US$54 million to drill 80 wells in Majnoon (although China also financed the US$255 million contract awarded to the Iraq Drilling Company at the same time). Crucially, Majnoon is Iraq’s side of the reservoir it shares with Iran, where it is called Azadegan (South and North).

In line with this strategy, then, various Chinese companies have been awarded 11 ‘contract-only’ projects in a number of operational areas of Iran’s South Azadegan oil field development, the Iran source exclusively told OilPrice.com. These include contracts for drilling-only, field maintenance-only, engineering-only, construction-only, and technology-only, among others. A further pointer to what is really going on with South Azadegan is that Petropars was also the partner to CNPC in the stalled Phase 11 project of the supergiant South Pars non-associated natural gas field.

“When [France’s] Total dropped out of Phase 11, CNPC was persuaded to add Total’s stake [50.1 percent] to its own stake [30 percent] by Iran’s additional promise that it [CNPC or another Chinese firm] would also get the first rights to take the major foreign rights to develop the South Azadegan field,” he said. “In Phase 11’s case, Petropars was the main Iranian representative company, with a 19.9 per cent stake and in South Azadegan it is now supposedly the principal developer,” he added. “In reality, it doesn’t make any difference what name is on the publicly-available contract, China is just going ahead with what has already been agreed,” he underlined.

With an estimated 27 billion barrels of oil in place in South Azadegan, the new deal is designed to increase its production from the current 140,000 barrels per day (bpd) to 320,000 bpd over 30 months, according to the Petroleum Ministry. As part of the 25-year deal, any and all part of this output can be required by Beijing to go to China, although the understanding is that Iran can take sufficient output from its oil and gas fields for its own power needs (and to maintain the energy supply deal to Iraq until such time as the U.S. ends the waiver for that). To do this, Iran and China have a very long-established number of methods to not make it too obvious to the U.S.

By far the most effective method remains the ‘rebranding’ of Iranian to Iraqi oil simply by switching the stickers on the sides of the tanker trucks moving oil across the extremely long and porous border between the two countries, and then sending it on to any destination that Iraq oil can go (which is anywhere in the world). Another is disabling (literally just flicking a switch) on the ‘automatic identification system’ on ships that are carrying Iranian oil, as is just lying about destinations in shipping documentation, changing the names of tankers whilst at sea, changing the country of a ship’s registration, and doing ship-to-ship transfers nearer to China (just outside Malaysia is a favourite).

As Iran’s Foreign Minister, Mohammad Zarif, highlighted (in December 2018 at the Doha Forum): “If there is an art that we have perfected in Iran, [that] we can teach it to others for a price, it is the art of evading sanctions.” In this vein, incidentally, despite widespread reports of how hard Iran’s oil production and exports have been hit by U.S. sanctions – that were targeted to reduce them to zero – the Islamic Republic is right now producing at least 2.2 million bpd and exporting 0.5-1 million bpd of that (albeit at dramatically reduced prices), according to Iranian oil and gas industry sources.

By Simon Watkins for Oilprice.com

https://oilprice.com/Energy/Crude-O...s-To-Develop-Supergiant-Oilfield-In-Iran.html

 

[Daniel808]

So, The China & Iran Economic-Security Project already begun

Congrats for both countries

 

[OldenWisdom...قول بزرگ]

Pakistan needed the role of a third actor to bring Iran closer... perhaps as a mediator? Or a referee... Either way China has played that role to "coerce" the two together... was this the opening Pakistan sought? Anyhow, Turkiye perhaps wanted the same as well... but, Pakistani character is that of a stronger Sunni partisan and Iran the Scion of Shi'ites... it is as if both will have to embrace each other in a guarded approach. Saudis at this point are neither here nor there, they have cut themselves down to the benefit of very few and this has become very apparent at this point.

How do you upend national character?

 

[Daniel808]

South Azadegan Supergiant Oilfield

 

[Daniel808]

https://twitter.com/x/status/1288797901154648065

https://twitter.com/x/status/1288773160322637824

 

[bolo]

So, The China & Iran Economic-Security Project already begun

Congrats for both countries

By November China will be able to sell cruise missiles to Iran. Iran will be using Beidou NAV instead of GPS.

 

[Daniel808]

By November China will be able to sell cruise missiles to Iran. Iran will be using Beidou NAV instead of GPS.

Yes, with Beidou Global Navigation System (BDS) going Online right now, and lifting of UN sanction to Iran in Nov.

They definetly can purchase DF-21D or even DF-26 ASBM to make Anti-Denial Access across Persian Gulf and Strait of Hormuz for american carriers.

Or maybe, a Joint Production of J-10CE AESA 4.5+ Gen Fighter complete with 300 Km Range PL-15E AAM Package and WS-10 TVC Engine.

Will be a Huge Up-lifting Capability of Iranian Air Forces after decades of no modernization

 

[Enigma SIG]

I love how China is playing this. Knowing Pakistan's concern on our western border this might be a good initiative so that Pakistan can focus on our eastern flank. Keep India under pressure. No doubt China wants BRI to succeed and CPEC secured from the western front will make all the difference.

 

[Daniel808]

I love how China is playing this. Knowing Pakistan's concern on our western border this might be a good initiative so that Pakistan can focus on our eastern flank. Keep India under pressure. No doubt China wants BRI to succeed and CPEC secured from the western front will make all the difference.

Indeed my friend, the Security of Pakistan western flank is one of the Consideration Chinese make a Deal with our Iranian friend

Anyway Chinese is good at playing their cards in Middle east, and again Indian is on the losing side.

Their Chabahar dream and interest in Middle east finally Destroyed by the Chinese

 

[Feng Leng]

I don't think China will sell the DF-21D or DF-26. But we have lots of DF-16s MaRV in the 500 km range. Those would be great for Iran's needs.

 

[Enigma SIG]

I don't think China will sell the DF-21D or DF-26. But we have lots of DF-16s MaRV in the 500 km range. Those would be great for Iran's needs.

Curious though, are arms sales part of this security deal? Is China selling them aircraft/tanks/ships?

 

[Feng Leng]

Curious though, are arms sales part of this security deal? Is China selling them aircraft/tanks/ships?

Time will tell. The potential areas of cooperation are endless. The sky is the limit.