China Defies Trump on Iran Big Time with $400 bn Belt-and-Road Investment and 5000 Red Army Troops
9 Sep 2019 – Iranian Foreign Minister Mohammad Javad Zarif was in Beijing recently for what turns out to have been the biggest triumph of his career. China has decided it has nothing further to fear from the Trump administration, and has decided to incorporate Iran into its One Belt, One Road plan with investments totaling some $400 billion.
I suspect Iran would rather have had this deal with Europe, but Trump breached the 2015 Iran nuclear deal and slapped severe sanctions on Tehran, and has been bullying big European firms into joining the financial blockade.
Iran had to seek its economic future with China, whether it likes it or not.
To guard the China-built oil and gas facilities, China will put 5,000 People’s Liberation Army troops into Iran. This troop presence in that country will be as big as the US military footprint in today’s Iraq or what the Pentagon plans for Afghanistan in 2020.
It is likely meant as a deterrent to US adventurism (visible in Iraq and Afghanistan), inasmuch as any major US military strike on or action against Iran would risk hitting Chinese army personnel and spiking tensions with a nuclear power.
China bought nearly a million barrels a day of petroleum from Iran last month, and probably more, since it buys Iranian oil and keeps it floating offshore as a reserve. It is only accounted for if it is actually offloaded at a port.
Under US severe sanctions, Iran’s exports had fallen to almost nothing last spring. The US Treasury Department went around strong-arming countries not to buy Iranian petroleum, threatening them and their corporations with sanctions if they used dollars in their Iran trade.
China is getting around these US sanctions in part by paying Iran in the soft currencies from Africa and Asia that Beijing has accumulated.
It may also pay in Chinese renminbi. Iran will give China a ten percent or so discount on all its petroleum products, and then will suffer another ten to fifteen percent loss on exchanging the soft currencies in friendly European banks.
So China is getting about a quarter to a third discount in toto. But since Iran was selling almost no oil last May, 70% of something is better than 100% of nothing.
Iran has suffered since 1979 with world opprobrium over its right wing, populist revolutionary government, and US and sometimes international sanctions have deterred the international oil and gas companies from developing Iranian fields. Iran still has no expertise in liquefied natural gas (LNG).
China plans to step in with large development projects of Iranian oil and gas , according to Global Construction Review. Iran will buy all its equipment in this sector from China, giving Beijing a monopoly. In addition, China will build new pipelines and roads, putting $120 bn. into transportation networks. One of the pipelines will take natural gas to Turkey, which is also defying the Trump severe sanctions on Iran. Beijing’s plan for Iran is similar to the Chinese Pakistan Economic Corridor, except it is ten times as ambitious (CPEC is a $50 bn. or so commitment).
Zarif said Iran is eager to be incorporated into its massive globe-straddling “One Belt, One Road” plan to connect Asia to Europe with new sea and road and rail and pipeline infrastructure. China is clearly obliging in a massive way. This plan is one of the great turning points in modern geopolitics. And it is the first such highly significant development since WW II to leave the United States completely on the sidelines.
Iranian FM Zarif: Iran wants to be a major stop in B&R:
Juan Ricardo Cole is the founder and chief editor of Informed Comment and Richard P. Mitchell Professor of History at the University of Michigan.
Tags: Asia and the Pacific, BRICS, Belt and Road, Capitalism, China, Cooperation, Development, Economics, Free Trade, Geopolitics, International Relations, Iran, MENA, Nonviolence, Solutions, Trump, USA, West, World
DISCLAIMER: The statements, views and opinions expressed in pieces republished here are solely those of the authors and do not necessarily represent those of TMS. In accordance with title 17 U.S.C. section 107, this material is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. TMS has no affiliation whatsoever with the originator of this article nor is TMS endorsed or sponsored by the originator. “GO TO ORIGINAL” links are provided as a convenience to our readers and allow for verification of authenticity. However, as originating pages are often updated by their originating host sites, the versions posted may not match the versions our readers view when clicking the “GO TO ORIGINAL” links. This site contains copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a ‘fair use’ of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond ‘fair use’, you must obtain permission from the copyright owner.
Click here to go to the current weekly digest or pick another article:
- The Politics of Cultural Despair
- The USA Has No Allies, Only Hostages
- Evo Morales’s Party’s Massive Victory Is a Rebuke to US Elites Who Hailed the Coup
- Dystopian Plagues and Fascist Politics in the Age of Trump: Finding Hope in the Darkness
- The U.S. Did Not Defeat Fascism in WWII, It Discretely Internationalized It
- Asking for the Impossible, and Recognizing the Fact
- The Japan Shinzo Abe Has Left Behind
- Pakistan and India’s Leaders Mark Freedom from British Colonialism: But Masses Look for Navigational Change
- The Heart of the Matter in the South China Sea
- Unite against Washington’s ‘Old-Fashioned Cold War Mentality’, Beijing Urges Asian Nations
- The Bolsonaro Thing
- India’s Hindu Right Are Willing to Bury Democracy
MIDDLE EAST & NORTH AFRICA:
- Forget About Jewish or Democratic. Is Israel Even an Actual Country?
- Trump Administration Imposes Crushing New Sanctions on Iran
- There Is Still Much to Be Learned about the Beirut Explosion
- 'It Affects Everything': Hawaii Residents Demand Transparency over Pearl Harbor Munitions Storage
- American Militarism Marches On: No Discussion or Media Coverage of Washington’s War against the World
- A Russia-China Military Alliance Would Be a Bulwark against America’s Global Imperialism. Is It Time for Washington to Panic?
- Goldman Sachs Fined $2.9 Billion over Role in 1MDB Corruption Case
- Global Billionaire Wealth Tops $10 Trillion as COVID-19 Deaths Mount
- JPMorgan Pays $920 Million Settlement over Illegal Trades
- Appropriator Financial Fabric, the Case of BlackRock
- Why Bitcoin Is Not a Socialist’s Ally – Reply to Ben Arc
- Global Economy: Oil vs COVID-19