The “secret” Iran-China 25 year deal: Documents and sources

By SETH J. FRANTZMAN

Since early July 2020 there has been increased interest in a China-Iran agreement that could be part of a wider 25-year strategic deal. This has become a controversy within Iranian media. Here is a look at some of the sources and notes on the wider alleged deal.

Tasnim identified this issue onJuly 3 in a series of articles. Radio Farda also began to cover it.

July 8 saw headlines about the “selling of islands.” The Iranian Foreign Ministry rejected these rumors.

On July 11 the Iran-China issue got more headlines;

On July 12 there were more articles. According to Tasnim News Agency , Mahmoud Vaezi, Head of the Office of the President, tonight (Saturday, July 12), while appearing on the One TV program, spoke about our 25-year contract with China. Read the story here.

The details of the agreement have also been floating around on social media.

The narrative presented by the regime is that this has been in the works for a while. Zarif traveled to China in August 2019 and discussed a “25-year roadmap for Iran–China strategic relations.” Others have rejected assertions that Iran is being “colonized” by China. Opposition has come from Ahmadinejad and others.

The message from Zarif and others is that there is nothing secret in these discussions.

Abbas Mousavi, spokesman for the Ministry of Foreign Affairs of the Islamic Republic of Iran, reacted tonight (Tuesday July 7) to the continuation of espionage against the comprehensive document of cooperation between Iran and China.

“The Iran-China Comprehensive Partnership Program is a clear roadmap and a principled guide for relations between the two important countries in the world to come,” he wrote in a tweet. “Where China, as the world’s leading economic power in the near future, and Iran, as the great power of the West Asian region, can withstand the pressure of bullies with complementary relationships independent of traditional and Western-dominated powers, while sharing common interests.”

My articles on Iran-China discussions

July 3: Iran media discuss 25 year deal between Iran and China

By SETH J. FRANTZMAN

In the last several days Iranian media have highlighted the possibility of a 25 memorandum or agreement with China that would see Iran benefit from China’s robust and strong economy and help increase the partnership between the two countries. Iran and China already have warm relations and China is likely keen to knit Iran into its various economic plans, such as the Belt and Road Initiative. Iran has been ready for participation in these initiatives and sought to turn to Turkey, Russia, India and China due to US sanctions.

News of this agreement has been raised before. In early June Al-Manar and Tehran Times both reported it in English and pointed to it as part of the current government of Hassan Rouhani’s initiative. This “road map” for the next 25 years of  China ties was mentioned by government spokesman Ali Rabiei on June 23. Full details of the plan were supposed to be published at some point. Iran Foreign Ministry spokesman Abbas Mousavi was supposed to present more details.

The “25 year agreement” was raised by former President Mahmoud Ahmadinejad during a political visit to Gilan province when he alleged there was a secret agreement. He argued against recognizing this contract. Radio Farda indicates that site since June 27 there have been more rumors. A pro-government conservative website in Farsi has mentioned that Iran is seeking this 25-year deal and Foreign Minister Javad Zarif has been tasked by President Hassan Rouhani with working it out. Ahmadinejad has tried to make it appear as if something is being hidden from the public. Meanwhile the deal was described as a pact between the “Lion and the Dragon,” by another newspaper. Apparently Iran is the lion in this relationship.

What is really going on? Tasnim news has put the Iran-China ties headline on its homepage. It argues that Iran and China have been in discussion for many years about closely working together. It also notes a trip by Zarif last year and a tweet he wrote in August 2019 where he mentioned a “25 year road map.” Tasnim’s point is that this is not a “secret” agreement the way the former president presented it, but rather a well known track of diplomacy. The question the article raises is how much investment is on the table. It notes that figures between $120 billion and $400 billion have been mentioned, with one article noting a $260 billion investment in Iran’s oil and gas sector.

Tasnim’s article hints at a larger nationalist concern in Iran. During the Cold War Iran sought a third way between the West and the Soviet Union. This was “neither east nor west.” But the article notes that Iran has sought to shift towards an “eastern strategy.” This does not mean “exploitation” as in the earlier eras of western colonialism, but mutual interests. The point the article makes is that Iran does not want to be subjugated economically by China. Ahmadinejad is well known as a champion of the working class and a personally modest man who was not known for a lavish lifestyle, perhaps in contrast to some of those in the current Iranian leadership accused of corruption, or those like Zarif who seem to enjoy being abroad more than being in Iran. Tasnim accuses Rouhani of kissing up to the West and now apparently weakening Iran in its relationships with the East.

In contrast Iran’s Fars News seems to favor the agreement and notes that Iran and China have increased relations and cultural exchange in recent years. This second report notes that Iran and China have not reached a strategic level of partnership with China and compares Iran-China relations with China-Pakistan relations. The article notes that Iran-China relations will anger the US and it appear to think this is a good idea. This is also important for Iran in the UN Security Council. Iran wants China’s support to end an arms embargo.

The overall details about this plan appear to be more about internal politics than just about China. It hinges on issues of national importance and what level of new ties Iran and China may create.

July 8; Iran denies it will give China rights to islands for new trade deal

By SETH J. FRANTZMAN

A rumor campaign in Iran, apparently being pushed by populist and nationalist voices, has asserted a secret deal by the regime foresees a roadmap agreement with China that would give China rights to some islands. Iran Foreign Ministry spokesman Abbas Mousavi had to deny reports that there are islands at the center of a comprehensive program between Iran and China.

Mousavi’s comments were reported on Tasnim and Fars News in Iran. He argued that China will be the world’s leading economic power in the new future and that it is time for Iran to link with this great power in western Asia. It was time to leave behind the western-dominated powers. This is a theme that pro-Iran voices, such as Hezbollah’s Hassan Nasrallah, also said yesterday.

But there are those in Iran, apparently including former president Mahmoud Ahmadinejad, who oppose these agreements. Therefore the foreign ministry said “there is no news of the transfer of Iranian islands, now the presence of the military or other illusions.” He called these rumors an old “trick.”

There are many small islands off the coast of Iran, some of which are strategic and important for navigation of the Persian Gulf. Iran also has a free trade zone on Kish island, and Iran has a deal with India about its Chabahar port, where there is also a free trade industrial area.

In December last year China, Iran and Russia held a joint naval drill. China and Iran are moving closer together over other interests, such as the Belt and Road Initiative. China’s main interest is not in Iran’s regional strategy, but in economic work across the Middle East, regardless of ideology. Iran needs a way around sanctions. Mousavi says Iran and China have been working together for decades and that it is natural to have close ties. Yet in Iran there are rumors of a secret document related to a 25-year deal and these rumors have led to speculation about granting China concessions or rights. Inevitably someone has pushed forward rumors about islands and other details. It’s not the first time islands came to the forefront of Middle East controversy. There were controversies over islands in a deal between Egypt and Saudi Arabia in 2017. The UAE has been accused of muscling in to Yemen’s Socotra island, exploiting chaos in Yemen to do so. Turkey has sought to takeover Sudan’s Suakin island as well in a deal going back to 2017 as well.

July 11: Kish island rumors

Iran’s Kish island free trade operators reject rumors of island being sold to China

By SETH J. FRANTZMAN

The managing director of the Kish Free Zone Organization,which manages part of an island that offers free trade opportunities in southern Iran, rejected claims that the islands status would be up for sale to China as part of an Iran-China deal. The comments made on Saturday to Iran’s Fars News seek to reduce concerns across Iran that a secret deal with China is in the works among officials within President Hassan Rouhani’s administration.

Iran, suffering US sanctions and economic challenges, has been reaching out to China. Iranian nationalist far-right politicians, including those around former President Mahmoud Ahmadinejad have fed rumors that Iran may give away “islands” as part of the deal. “This is not true and it is false,” said Gholam-Hossein Mozaffari, the managing director of the Kish Free Zone.” Iran’s media has blamed “monarchists” abroad for spreading the rumors. But clearly the Iranian media takes the rumors sufficiently seriously as to spend days and numerous articles debunking them. It’s far fetched that islands could be handed over, but China could gain some concessions or trade rights.

Iran already has deals with India in Chabahar port where India wants to invest. This means Iran is open to deals that help it improve infrastructure and that might mean some unique opportunities for China. China has helped develop other ports across Asia and Africa, so it has experience and it has a way of doing business that often involves some management or concessions. Why Iranian media is so focused on the China issue is unclear. Tasnim News has devoted numerous front page stories to the China deal and yet much of the deal remains uncertain and clouded in rumors and stories. It appears the real issue may be about who will take credit for it and what role the IRGC or others could play in its wake, such as regarding investment and a piece of the deal.