The triple alliance of Moscow, Beijing and Tehran

Or why the Americans are so alarmed by the Iran-China strategic agreement and the prospect of Iran joining the Eurasian Economic Union
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print 18 2 2021

Suddenly, a wave of amazement began to build up in the US-controlled media about the leak of the contents of the upcoming Iran-China strategic agreement. According to the press, the authorities of the Islamic Republic of Iran are going to sell the country for $400 billion in complete bondage to China for the next quarter of a century. Moreover, Western publications especially emphasise that a significant military component has now been added to the purely economic content, which involves the deployment of PLA combat units in Iran.

In general, China is expanding its future Sphere of General Prosperity to the Middle East, and, more importantly, it is thereby infringing on Russian geopolitical interests. However, the Iranian authorities simply do not want to be sold. In this connection, Tehran makes curtsies in the direction of Moscow, as if inviting Russia to this dance as well. In general, as always, "everything is lost and we will all surely die”.

As usual, the hype did not rise entirely from scratch. Moreover, most of the facts mentioned are true or are something very close to it. Another thing is how cunningly it is served by the Americans and the world media controlled by them, and how the accents are placed. Therefore, we will start to understand, according to tradition, "from the stove".

The Iran-China cooperation program does exist. The press services of Iran and China reported that a certain roadmap for a comprehensive 25-year mutual strategic partnership was discussed by Iranian Foreign Minister Mohammad Javad Zarif and Chinese Foreign Minister Wang Li at a meeting in August 2019 in Beijing. But back then everything was presented only as work on the extension of the previous similar contract from 2016, so no one was particularly alarmed.

The New York Times tried to declare an alarm, allegedly "from its own sources” having obtained a "possible draft" of the document as of June 2020, allegedly serving as the basis for a new Iranian-Chinese diplomatic meeting also in Beijing. But, most likely, it played only as a channel for launching the information obtained by intelligence into official public circulation.

Whatever it was, the "draft" referred to the promise of China to invest $280 billion in the development of the oil and gas, petrochemical and oil-producing industries of Iran. And not for the sake of patronage, but for direct self-interest.

In general, with this money, Chinese companies receive a priority right to participate in any (new, stopped, unfinished or repurposed) oil and gas projects. Participation – in the sense of acquiring the maximum possible share of assets. Further, Iran guarantees China in advance, for the entire period of the agreement, i.e., for 25 years, an automatic and unconditional discount of 12% of the average moving price for 6 months for any volume purchased by China. Including everything that will be put up for sale in Iran at all. Plus, China gets an additional bonus in the form of another 8% discount to compensate for the risks.

This alone provides Beijing with the opportunity in the long term to receive at least 2 million barrels of oil per day at a price 20% "below the market". And taking into account the prospect of expanding production and, accordingly, Iran's export opportunities in the future, then up to 3.5 million barrels per day.

At first glance, this is not very much. China imports between 11 and 12 million barrels per day. But, firstly, "many a little makes a mickle", and secondly, this is not the whole list of pleasures. The agreement allows Beijing to settle the accounts with Tehran in so-called "soft currencies" (for example, in the currencies of African countries or post-Soviet states), which in itself promises additional savings of 10-12%. And China is allowed to delay payments for up to 2 years.

In general, according to the most conservative estimates, if signed, the agreement will give China the opportunity to receive about a quarter of the imported volume of oil and petroleum products at a price at least 32-35% lower than current quotations. But this is quite a worthy prize, even for a very complex and risky game.

However, the investments are not limited to the mentioned 280 billion. Another 120 billion is expected to be invested in the development of the Iranian infrastructure. In the broadest sense of the term. Ordinary roads. Rail transport. Expansion of existing ports and construction of new ones.

Plus the electrification of the main highway of Iran - the 900 km long route between Tehran and Mashhad. And also to build a Tehran-Qom-Isfahan high-speed train line and expand this upgraded network to the northwest through the city of Tabriz, which is integrated into the land part of the Chinese Belt and Road project and becomes the main logistics hub of its so-called "southern sector".

Tabriz, a powerful hub for a number of key oil and gas and petrochemical facilities, as well as the starting point for the Tabriz-Ankara gas pipeline, will be the fulcrum for the 2,300 km New Silk Road project, which connects Ürümqi (the capital of the western province of Xinjiang) and Tehran and connects Kazakhstan, Kyrgyzstan, Uzbekistan and Turkmenistan along the way, and then through Turkey to Europe.

Why China needs all this is clear. Taking advantage of the formed weakness of the United States, as a global hegemon, in the American-centred global world, Beijing is actively forming its own closed cluster, relying on which it can safely thrive, at least until the end of this century. It depends very little on trade relations with the United States, and ideally does not depend on them at all, turning foreign trade only into a pleasant, but not mandatory bonus to its "Regional Comprehensive Economic Partnership", signed in November 2020 on the basis of the ASEAN countries.

But the reason why the Iranian authorities agree to seemingly enslaving conditions is not so obvious. At first glance, it seems to many that the Iranian leadership is directly selling the country to the Chinese "for ridiculous money". However, we should not forget the position of the Islamic Republic of Iran in economic and political terms.

In 2004, Iran generated up to 5.1% of the world's oil production, earning from this from $25 to $30 billion a year, which only directly formed 18.7% of its GDP, and taking into account economic multipliers gave 60% of all state revenues and formed up to 80% of the total annual value of exports and foreign exchange earnings, with which the country could generally build its long-term development, since Iran simply has no other sources of economic growth.

US sanctions have cut off more than 80% of the cash flow, not only severely slowing down the development of the Iranian economy, but also creating a threat to the geopolitical existence of the country as a whole.

This old and repeatedly tested scheme is to stimulate the growth of internal discontent in an undesirable state through a drop in the standard of living of its population, so that the crowds of protesters themselves then demolish their own government. And in the resulting turmoil, it became possible to bring to power "more correct guys who understand well who is the feeding hand, and with whom it should not be possible not only to be friends with, but even to walk through the desert alone”.

The Iranian authorities have learned to live under sanctions, but they still understand two long-term threats. In a world where trade is tied only to the United States and the American-controlled Europe, things don’t look good for them. In all senses, including regionally.

It is clearly visible how the Gulf Monarchies are successfully forming a new geopolitical alliance with Israel, which needs a strong Iran in the Middle East about as much as skis are needed in a Finnish sauna.

Moreover, Tel Aviv leaves Tehran with only two choices: either surrender to the mercy of the victor, renouncing any independence even within the Persian Gulf, becoming a disenfranchised, not even American, but Israeli satellite, or to die completely geopolitically. The Israeli leadership is determined to even directly bomb Iran, if it deems it possible. Moreover, the Israeli Air Force has already multiplied the Iranian nuclear centres by zero several times.

To continue to live in its own way, the Iranian establishment needs money, and a lot of it, but there is nowhere to take it, except from the sale of oil. Russia, no matter what anyone thinks about it, is not able to offer investments of this scale. And there is absolutely no need for us to buy Iranian oil in such volumes. There will be nowhere to put it. Russia has enough of its own.

So it turns out that for all the short-term economic disadvantages, a strategic agreement with Beijing is the only option for the long-term survival of the Iranian state.

Against this background, even a 32% discount on oil prices for China is quite an acceptable price. In addition, for it, Iran still gets the status of an important logistics hub, connecting not only the Middle East, but also the Central Asian region with China and the huge Regional Comprehensive Economic Partnership market. And this already opens up the prospect of developing other sectors of our own economy that are not connected with the "oil and gas needle".

I agree that the situation looks cynical, but big politics is always the art of the possible, where you have to play only with the cards that you have, and not with those that you want in your dreams.

However, the case is not limited to the above. There are several other important factors that affect what is happening in the most direct way.

Iranian Parliament Speaker Mohammad Bagher Ghalibaf said that his country has held the necessary negotiations and is preparing for permanent membership in the Eurasian Economic Union (EAEU). For what?

There are at least two reasons. Actually - three, but the third will be discussed later.

Firstly, the Iranian authorities are not at all happy with the price they are now likely to have to pay for preserving the prospects for the continued existence of their state. The inevitability is inevitable, but the risk is too great to end up in the eternal satellites in a very second, if not third, role at all. Moreover, with a difficult-to-lift heap of debts, the repayment of which will be dependent on the creditor, who is also the buyer of the country's main export product.

Therefore, they need someone who can counterbalance the Chinese dominance to a tangible extent. If not in the economy, then at least in international politics. There is exactly one option for such an ally in the current geopolitical scenario – Russia and membership in the EEU.

Secondly, the Western media is strongly deceitful, rattling all the bells on the topic of Iran's absorption by China. If this version had been justified, Beijing and Tehran would not have discussed a separate, strictly bilateral agreement, but would have worked out the option of Iran's joining the Regional Comprehensive Economic Partnership, which is much easier for a number of reasons. And the most important thing in the public sphere looks more than decent and acceptable to the authorities of the Islamic Republic.

However, China is following the path of a bilateral agreement. What for? The answer is quite obvious, and it is very strange that the alarmists do not notice it. Like Pakistan, which is already firmly attached to Beijing, China assigns Iran the role of the second outer layer of the future Chinese space of general prosperity.

If the ASEAN members are firmly and completely tied to the Chinese economy, then the outer circle should serve as an element for linking the Regional Comprehensive Economic Partnership with other global political and economic entities. This is like a buffer belt, which is connected to the same EEU. This gives Iran the opportunity to interact not only with China, but also with Russia, and China - to continue to reformat at least Central Asia into the same buffer.

Thus, Beijing unofficially suggests that Russia divide Central Asia, the Caucasus, Transcaucasia, and part of the Middle East "into two". But not rigidly, with a visible border, "from these and there it is only mine, from these and further here it is yours", but gently, mixing mutual penetration and mutual influence "in the buffer zone", but protecting it from the penetration of third forces.

At the same time, both Moscow and Beijing see Iran not only as a trading partner or a source of profit for themselves, but also as an unofficial "main overseer in the Middle East", able to counterbalance Israel, and even in the long term significantly move its influence in the region.

And this role suits Tehran quite well, because it will definitely not be able to ensure not only its regional interests, but even its own national security, relying only on its internal forces.

Iran, for its protection, clearly needs direct military-technical and even military assistance. But it cannot enter into a military alliance with anyone. For an obvious reason. It will only weaken the allies, thereby greatly reducing their desire to actively defend it.

But if they will invest their money in Iran, especially such a huge amount, if Iran turns out to be the cornerstone in the future construction of geopolitical influence in three regions at once, the situation turns out to be completely different. Moreover, this applies equally to both China, which, for its $400 billion, will inflict punishment on anyone, and Russia, which is no less determined in protecting its own future and which also internally agrees, figuratively speaking, to cover Iran with "a part of the shadow of the Russian nuclear umbrella".

This is precisely what forms the third factor mentioned above, which has turned out to be the main source of great hysteria in the Western media today.

If up to and including 2019, the 25-year strategic agreement between Iran and China contained only the economic part, then after the meeting in the summer of 2020, a purely military section appeared in the document, proposed, as sources say, by Iran's Supreme leader Ali Khamenei and the supreme command of the Islamic Revolutionary Guard Corps, as well as the leadership of Iranian intelligence.

As follows from the draft published by the NYT (which, of course, is not the ultimate truth, but rather strongly corresponds to the current reality, which allows us to consider it sufficiently reliable), the document assumes the active development of military cooperation immediately in a trilateral format.

It is supposed to agree on unlimited access to the Iranian air bases by Chinese and Russian air Force aircraft. For this purpose, in particular, it is planned to build "specialised dual-use facilities" (read – military air bases) near the existing airports in the cities of Hamedan, Bandar Abbas, Chabahar and Abadan, where a certain number of “modified versions of Russian Tu-22M3 long-range bombers in China, as well as Su-34 and Su-57 fighter-bombers” can be permanently located.

Chinese and Russian warships will be provided with the possibility of permanent basing in the key Iranian ports of Chabahar, Bandar-e-Bushehr and Bandar Abbas.

Separately, the deployment of a powerful electronic warfare group in Iran is being discussed, capable of carrying out early warning, protection (including jamming the enemy) and even attacks (suppression of enemy electronics in neighbouring territories, including the neutralisation of command, control, communications, computers, surveillance and intelligence of NATO C4ISR).

Well, and, of course, they talk about the creation of a powerful air defence system based on the S-400 and other successful Russian innovations - how not to mention them?

If we assume that the parties come to an understanding, then Iran will turn into a sufficiently powerful fortress, impenetrable for the Israeli Air Force and difficult to break even for a mass raid by US cruise missiles.

Plus, the Iranian authorities, if one may say so, are significantly freeing their hands in terms of projecting their Iranian "soft power" into Syria and Iraq, where the Iranians are now quite well established, as more familiar "friends" in the region than the good, but still distant "Russians", and where it is quite difficult for China to move.

Moreover, the Iranian "Shiite Crescent" plan receives not only logistical support, but also serious material resources to extend it to Lebanon and even Egypt. And this, shall we say, is the direct border of Israel.

And in terms of deterring the "Turkish initiatives" to restore the "Great Turan", such an Iran will also be more than useful. What is also important is that it will correspond to his own state interests, and this is a very strong motive, much stronger than money.

Such is a tangle is the result.

This construction has a single weak point – a specific feature of the worldview and behaviour of the Iranian elite. It is very fond of silence and secrecy.

If you remember, the Americans once already disrupted the Russian-Iranian agreement on the use of some Iranian air bases by the Russian Aerospace Forces as an airfield for jump-starting operations in Syria in 2019. The agreement has not yet been signed, there were only negotiations, and the resulting hype in the Western press led to their abrupt curtailment by the Iranian side.

Now the US is trying to put pressure on the same callus. Especially insisting that the military part, they say, is the direct occupation of Iran by China, and the economic one means that the government is treacherously trying to sell all Iranians to China in bulk.

However, Washington can be understood here. Its relationship with China is already seriously burning. And then there is such a clear increase in its power and the expansion of the zone of absolute influence, which simultaneously forms a direct threat to the logistics highway through the Suez and greatly reduces the regional potential of India, from which the United States, sleeping and watching, makes a worthy counterbalance to Chinese expansion in the world. So they strike where they can reach.

However, the attempts of London and Washington are unlikely to fundamentally change anything in the big geopolitical game between Moscow and Beijing, which is going around the formation of a new global geopolitical configuration of the world by 2046-2050.

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