China-Iran Strategic agreement

China is all set to implement a strategic agreement with Iran, in a bid to strengthen economic and political cooperation between both the countries.In a meeting, China also reaffirmed its opposition to USA’s sanctions on Iran.Announcement for implementing “China-Iran Strategic agreement” was made at a meeting in east China’s Wuxi on January 14, 2022.

China-Iran Strategic agreement

• During the meeting, foreign ministers agreed to step up cooperation in energy, production capacity, infrastructure, science & technology, and medical & health care.
• Bilateral relations will also be expanded to sectors like agriculture, fisheries, third party market, cybersecurity, people-to-people as well as cultural exchanges in film, education, and personnel training.
• They have also agreed to make “adequate arrangements” for setting agreement in motion.

$400 billion agreement

• ‌‌China and Iran signed a $400 billion agreement on March 27, 2021 by then Iranian Foreign Minister Javad Zarif and Wang.
• The agreement includes Economic & Cultural interaction between both the countries.
• It also opens up ways for Iran’s participation in Belt and Road initiative which is an infrastructure project running from East Asia to Europe.
• The project was launched with the aim of expanding China’s economic and political influence.

Background

• The agreement was signed in 2016 when Chinese leader Xi Jinping visited Iran, after a nuclear deal was signed between Iran and world powers.
• However, when US withdrew from the deal in May 2019 and put sanctions on Iran, Iran-China agreement was also put on hold.

China–Iran relations

• Official relations between China and Iran were started in 1937. Both the civilizations have had a history of cultural, economic and political exchanges along the Silk Road since 200 BC.
• ‘Presently, China and Iran have developed a friendly strategic and economic partnership.
• Both the countries singed a 25-year cooperation agreement in March 2021, for strengthening the relations.
• The relation also includes “political, strategic and economic” components.

Economic relations

• China considers Iran as permanent partner for its exports and a source of its growing energy demand. Chinese state-run company, Zhuhai Zhenrong Corporation, signed a 25-year contract for importing 110 million metric tons of Liquefied Natural Gas (LNG) from Iran, in March 2004.
• China has been crude oil sink of Iran, since the JCPOA was signed.
• 64% of an export total of $16.9 billion with China was crude oil, in 2017.