Part of: GS Mains II – International Relations
- Iran and China are taking their partnership to a new level through a $400-billion long-term agreement.
- Both the countries are in an advanced stage of finalising the agreement that would allow China to expand its presence in banking, telecommunications, ports, railways and several other sectors in the Islamic Republic in return for heavily discounted oil for 25 years.
- The above agreement if finalized could be an economic lifeline for sanctions-hit Iran and China could enhance its strategic influence in a region where the U.S. has built a strong presence since the Second World War.
- The agreement could also attract punitive measures from the U.S. against China.
- Both countries are at odds with the U.S.
- While China is a huge energy market and is abundant with surplus cash, Iran is a sanctions-hit, cash-strapped energy exporter.
- Iran has a very crucial place in China’s Belt and Road Initiative (BRI).
- China and Iran would launch joint training exercises, joint research and weapons development and intelligence sharing.
- China will also offer its GPS to Iran, build infrastructure for 5G rollout and develop free trade zones.