According to reports from Iran, Iran and China have agreed to develop a 25 year roadmap for a strategic partnership, which was first proposed in the 1990s. The relationship between Iran and China has strategic significance because the West refuses to cooperate with Iran under pressure from the United States, and its efforts to contain China's economic and political rise automatically push Iran and China to form various alliances.
Iran's oil and energy exports are sanctioned by the United States
Since the Islamic Revolution in 1979, American companies have been prohibited from trading with Iran, while European companies have withdrawn due to the threat of sanctions imposed on the United States. This helps Chinese companies enter and fill the gap. As a result, Iran and China have established a unique partnership that is almost impossible or difficult to achieve compared to any other country. Iran claims that despite attempts by the United States to reduce its exports of oil and natural gas energy to zero, China remains Iran's major oil customer. The oil money is stored in Chinese banks, and the assets are used to fund projects carried out in the Islamic Republic of Iran.
Iran's oil is now a major client
Currently, there are no US or European banks handling transactions related to Iran, making China an ideal trading partner for Iran. Iran is regaining its glorious significance of connecting Asia with Europe and Africa through land routes in ancient times. And Iran's railway sector has attracted all railway engineering and rolling stock companies. The withdrawal of investment by the United States and Western countries has made competition in the Iranian business sector less intense for China. The large-scale transportation project constructed by China in Iran is worth 1.5 billion US dollars, including the electrification of a 926 kilometer railway line from Tehran, the capital of Iran, to Mashhad. Iran also plans to establish the Tehran Qom Isfahan high-speed railway line and expand the upgraded railway network to the northwest through Tabriz.
This railway is part of the 2300km long "New Silk Road", which will connect Urumqi in China's resource rich Xinjiang Province to Tehran, Kazakhstan, Kyrgyzstan, Uzbekistan and Turkmenistan along the way, and extend to Europe through Türkiye.
China insists on supporting Iran
Meanwhile, Tabriz in Iran is home to many important oil, gas, petrochemical, and other industrial bases, and the starting point of Tabriz Ankara will be a key point on this route. Iranian President Hassan Rouhani stated that the plan paves the way for China to participate in Iran's infrastructure construction projects. He called it an opportunity to attract investment in the fields of industry, tourism, information technology, and communication.
Iran and China have signed a new 25 year agreement, first signed in 2016, which expects China to invest $400 billion in resource rich Middle Eastern countries. The core of the new agreement is that China will invest 280 billion US dollars to develop Iran's oil, gas, and petrochemical sectors. Iran stated that China will invest an additional 120 billion US dollars to upgrade Iran's transportation and manufacturing infrastructure, which can be advanced to a five-year period. If both parties agree, investment funds can be increased in each subsequent period
The railway connecting Iran and Central Asian countries has been opened to traffic
China's close participation in the construction of Iran's manufacturing infrastructure will fully comply with its huge "the Belt and Road" initiative. Iranian oil economists say that the main advantage of these transactions comes from facts, which makes it difficult for the United States or other adversaries to further sanction Iran.
According to Iranian sources, "In order to avoid further escalation of sanctions and encourage the United States to return to the negotiating table over time, Iran now holds two fifths of the support votes in the United Nations Security Council." There are reports that China and Russia are currently working to curb the United States' plan to expand the Iran arms embargo at the United Nations Security Council, which will be lifted in October. Iran claims that according to international law, cooperation between China and Iran is legal and should be "respected".