China is expected to invest billions of dollars in Iranian energy projects, and in return it will receive 25-year Iranian oil supply

China and Iran are expected to sign the Economic-Security Partnership Agreement, in light of the US sanctions on Iran and the trade dispute between China and the US. 

According to a report in The New York Times, China is investing billions of dollars in the Iranian energy industry and other industries affected by the US sanctions. According to the draft agreement, the Chinese will also invest in banking, telecommunications, ports, railways and dozens of other projects in exchange for discounted and regular oil supply for 25 years. The military side of the agreement includes cooperation in the development of weapons, intelligence co-operation and joint military maneuvers.

Photo: Reuters

The agreement - first proposed by China's leader Xi Jinping to visit Iran in 2016 - was approved by President Hassan Rouhani's government in June - Iran's foreign minister Mohammed Jawad Zarif said last week. However, it has not yet been submitted for approval by Iran's parliament.

Another concern arising from the agreement is that China will provide Iran with state-of-the-art weapons systems and thus upgrade the country's military capabilities, especially in the airspace. Iran holds a fleet of aging fighter jets alongside its manufactured models that are mainly imitations of old-fashioned aircraft developed in its allies. Chinese money will allow Iran to equip new fighter jets made in China or to purchase advanced technologies for its jets. 

The renewed US sanctions on Iran, including the threat of cutting off access to the international banking system for every company doing business in Iran, have succeeded in stifling the Iranian economy by smuggling trade and foreign investment.