07-14-2020, 09:47 PM
*** 15-Jul-20 World View -- China, Iran draft 25-year $400 billion trade and military agreement
This morning's key headlines from GenerationalDynamics.com
****
**** China, Iran draft 25-year $400 billion trade and military agreement
****
![[Image: g200714b.jpg]](http://Media.GenerationalDynamics.com/ww2010/g200714b.jpg)
A hearty laugh is shared in December by Iran's foreign minister Javad Zarif, left, and Miao Lu, secretary-general of Center for China & Globalization (AFP)
A leaked agreement being negotiated by China and Iran has little
chance of being implemented, but if it were, it would have
significance going back through centuries of Iran's history. China
would invest $400 billion over a 25 year period in infrastructure and
military projects in Iran, in return for discounts on Iranian oil.
The agreement is very much in the pattern of China's Belt and Road
(BRI) agreements with numerous countries, using "debt trap diplomacy."
The typical pattern is that China lends an enormous sum of money to a
country, and the country then uses that money to pay Chinese companies
for parts and services, and then pays salaries of thousands of Chinese
workers that will develop the projects. Once the target company fails
to make its debt repayments, China seizes control of the country's
strategic assets. China has used these secret agreements to acquire
and control ports and other strategic assets in Sri Lanka, Democratic
Republic of Congo (DRC), Ghana, Zambia, Kenya -- through its "debt
trap diplomacy." Several other countries, including Pakistan and the
Maldives, are at risk.
The draft agreement is secret, but the terms that are leaked look very
similar to BRI agreements with other countries. According to the NY
Times, which obtained the leaked agreement, it cites almost 100
projects, including airports, high-speed railways and subways. China
would develop free-trade zones in Maku, in northwestern Iran, and in
Abadan, where the Shatt al-Arab river flows into the Persian Gulf, and
on the gulf island Qeshm. The agreement also includes proposals for
China to build the infrastructure for a 5G telecommunications network,
to offer the new Chinese Global Positioning System, Beidou, and to
help Iran's government control the internet in the same way that China
does. China will have access to Iran's military airbases.
A secretive element relates to the military dimension of the
agreement, whereby China will have 5,000 members of its security
forces present on the ground in Iran. Once again, this is a typical
requirement. China lends money to Iran, Iran uses the money for
Chinese parts and services, and to pay the salary of Chinese workers,
the Chinese workers send the money back to their families in China.
So China gets the money back, and Iran still has to repay the loan, so
that Iran essentially has to repay the loan twice.
China will be investing nearly $400 billion in Iran’s oil, gas and
petrochemicals industries in the first five years of the agreement. In
return, China will get priority to bid on any new project in Iran that
is linked to these sectors. China will also get a 12 percent discount
and it can delay payments by up to two years. In addition, China will
essentially be able to pay in any currency it desires. In total, China
will receive discounts of nearly 32 percent.
****
**** Iran's history with the 'capitulatory system'
****
The "capitulatory system" of the Middle East was developed starting in
the 1500s during the rise of the Ottoman empire (Turkey). A
capitulation was an agreement between two countries to permit one
country to grant various concessions to another country. Under this
system, the French were granted by the Ottomans to establish trading
posts and consular missions in Syria and Egypt. Later, agreements
with England and other Europeans provided for imports of steel, led,
tin, gold and silver into Turkey.
In the 1800s, the capitulatory system reached Persia (Iran). After
Persia's humiliating military losses to the Russians and English,
Persia was forced to accept concessions as "reparations." Economic
concessions fell into three major categories: public utilities,
financial enterprises, and exploration for and exploitation of natural
resources. I described this capitulatory system in detail in my 2018
book, "World View: Iran's Struggle for Supremacy -- Tehran's Obsession
to Redraw the Map of the Middle East."
After decades of these concessions, where the Russians and English
took advantage of the Iranians, and the Iranian politicians and
clerics were enriched through corruption, there was a backlash. For
example, the tobacco concession granted a monopoly on both the
purchase and sale of tobacco within Persia to an English company for a
period of fifty years, and during this period Iran's rulers received
enormous kickbacks, while Iran's tobacco merchants suffered. Huge
anti-government protests led to the anti-government Tobacco Revolt
(1890-92).
In the political debate of that time, a merchant wrote:
<QUOTE>"By what laws does the government sell our national
rights to foreign racketeers? These rights, according to both the
principles of Islam and traditional laws of Iran, belong to the
people of our country. These rights are the means of our
livelihood. The government, however, barters the Moslem property
to the unbelievers. By what law? Have the people of Iran died
that the government is auctioning away their
inheritance?"<END QUOTE>
Today, the proposed Iran-China draft agreement is receiving sharp
criticism that sounds very similar to the above criticism of the 1890
tobacco concession. Some lawmakers are saying that it feeds China's
'colonialist greed." Former President Mahmood Ahmadinejad warned that
the Iran-China agreement was with "a foreign country" was being
discussed "away from the eyes of the Iranian nation." Reza Pahlavi,
the son of the last Shah of Iran, blasted the "shameful, 25-year
treaty with China that plunders our natural resources and places
foreign soldiers on our soil."
The Tobacco Revolt was a major event in Iranian history, with
implications far beyond the income of tobacco merchants. The tobacco
concession was revoked, but the anti-government protests continued.
In 1905 there were protests over the price of sugar and the sugar
merchants. This led to a massive civil war known as the
Constitutional Revolution, whose purpose was, among other things, to
demand adoption of a constitution that would guarantee that no leader
was above the law, and would control the powers of the Shah, and not
allow him to grant concessions to other countries without the approval
of the Majlis (parliament).
What's obvious here is that today's proposed Iran-China agreement is
stirring up emotions still remaining from the Tobacco Revolt and the
Constitutional Revolution, just as racial issues in America today stir
up emotions remaining from the American Civil War.
People are always asking me about "regime change" -- when will the
Iranian people rise up and finally replace the exceedingly corrupt
religious thugocracy running the country now. As we know from
Generational Dynamics, Iran is in a generational Awakening era, which
is the time in any country when a "velvet revolution" or non-violent
coup is most likely to occur.
So I believe that this agreement has almost no chance of being
implemented. But if Iran's loony leaders continue to push it, it
could be the trigger for the regime change that everyone claims to
want.
John Xenakis is author of: "World View: Iran's Struggle for Supremacy
-- Tehran's Obsession to Redraw the Map of the Middle East"
(Generational Theory Book Series, Book 1), September 2018, Paperback:
153 pages, over 100 source references, $7.00, https://www.amazon.com/World-View-Suprem...732738610/
****
**** Iran's Chabahar Port deal with India is at risk
****
In 2016, India and Iran signed a the "historic" Chabahar Port
agreement. Chabahar is on the coast of Iran near Pakistan. India has
agreed to invest $500 million to significantly increase the size of
this port. Using it, India will be able to bypass Pakistan in
shipping goods to Iran, and from there to Afghanistan, Central Asia or
Europe. When India took operational control of the port in 2018,
India agreed to invest in the 628 km Chabahar-Zahedan railroad linking
the port to the Trans-Iranian railway and to other cities in Iran,
connecting from there to Afghanistan, Central Asia, and Eastern
Europe. ( "18-Feb-18 World View -- Iran gives operational control of its Chabahar seaport to India"
)
On Tuesday, Iran announced that India would no longer be part of
the Chabahar-Zahedan railway project, and that Iran would go it
alone. The reason given is that India has delayed providing
funding for its share of the project, related to the American
sanctions on Iran.
However, it's widely suspected that India was dropped from the project
under pressure from China. Under the new China-Iran draft agreement,
China will assist Iran in "Chabahar’s duty free zone, an oil refinery
nearby, and possibly a larger role in Chabahar port as well,"
according to reports. The upcoming deal will facilitate Chinese
investments in "infrastructure, manufacturing and upgrading energy and
transport facilities, to refurbishing ports, refineries and other
installations." Furthermore, the agreement wi commit Iran to
supplying oil and gas to China for the whole duration.
Using debt trap diplomacy, China has taken over Sri Lanka's Hambantota
port, and is expected soon to take over the Mombasa port in Kenya. In
each of those cases, there is a large enclave of thousands of Chinese
workers living near the ports. Under the new draft agreement, China
is already planning an enclave of 5,000 Chinese workers in Iran, and
may be planning to take over the Chabahar port, when the time is
right.
Sources:
Related Articles:
KEYS: Generational Dynamics, Iran, China, Javad Zarif, Miao Lu,
Belt and Road Initiative, BRI, capitulatory system,
Tobacco Revolt, Constitutional Revolution,
Mahmood Ahmadinejad, Reza Pahlavi,
India, Chabahar Port, Chabahar-Zahedan railway,
Sri Lanka, Hambantota port, Kenya, Mombasa port
Permanent web link to this article
Receive daily World View columns by e-mail
Contribute to Generational Dynamics via PayPal
John J. Xenakis
100 Memorial Drive Apt 8-13A
Cambridge, MA 02142
Phone: 617-864-0010
E-mail: john@GenerationalDynamics.com
Web site: http://www.GenerationalDynamics.com
Forum: http://www.gdxforum.com/forum
Subscribe to World View: http://generationaldynamics.com/subscribe
This morning's key headlines from GenerationalDynamics.com
- China, Iran draft 25-year $400 billion trade and military agreement
- Iran's history with the 'capitulatory system'
- Iran's Chabahar Port deal with India is at risk
****
**** China, Iran draft 25-year $400 billion trade and military agreement
****
A hearty laugh is shared in December by Iran's foreign minister Javad Zarif, left, and Miao Lu, secretary-general of Center for China & Globalization (AFP)
A leaked agreement being negotiated by China and Iran has little
chance of being implemented, but if it were, it would have
significance going back through centuries of Iran's history. China
would invest $400 billion over a 25 year period in infrastructure and
military projects in Iran, in return for discounts on Iranian oil.
The agreement is very much in the pattern of China's Belt and Road
(BRI) agreements with numerous countries, using "debt trap diplomacy."
The typical pattern is that China lends an enormous sum of money to a
country, and the country then uses that money to pay Chinese companies
for parts and services, and then pays salaries of thousands of Chinese
workers that will develop the projects. Once the target company fails
to make its debt repayments, China seizes control of the country's
strategic assets. China has used these secret agreements to acquire
and control ports and other strategic assets in Sri Lanka, Democratic
Republic of Congo (DRC), Ghana, Zambia, Kenya -- through its "debt
trap diplomacy." Several other countries, including Pakistan and the
Maldives, are at risk.
The draft agreement is secret, but the terms that are leaked look very
similar to BRI agreements with other countries. According to the NY
Times, which obtained the leaked agreement, it cites almost 100
projects, including airports, high-speed railways and subways. China
would develop free-trade zones in Maku, in northwestern Iran, and in
Abadan, where the Shatt al-Arab river flows into the Persian Gulf, and
on the gulf island Qeshm. The agreement also includes proposals for
China to build the infrastructure for a 5G telecommunications network,
to offer the new Chinese Global Positioning System, Beidou, and to
help Iran's government control the internet in the same way that China
does. China will have access to Iran's military airbases.
A secretive element relates to the military dimension of the
agreement, whereby China will have 5,000 members of its security
forces present on the ground in Iran. Once again, this is a typical
requirement. China lends money to Iran, Iran uses the money for
Chinese parts and services, and to pay the salary of Chinese workers,
the Chinese workers send the money back to their families in China.
So China gets the money back, and Iran still has to repay the loan, so
that Iran essentially has to repay the loan twice.
China will be investing nearly $400 billion in Iran’s oil, gas and
petrochemicals industries in the first five years of the agreement. In
return, China will get priority to bid on any new project in Iran that
is linked to these sectors. China will also get a 12 percent discount
and it can delay payments by up to two years. In addition, China will
essentially be able to pay in any currency it desires. In total, China
will receive discounts of nearly 32 percent.
****
**** Iran's history with the 'capitulatory system'
****
The "capitulatory system" of the Middle East was developed starting in
the 1500s during the rise of the Ottoman empire (Turkey). A
capitulation was an agreement between two countries to permit one
country to grant various concessions to another country. Under this
system, the French were granted by the Ottomans to establish trading
posts and consular missions in Syria and Egypt. Later, agreements
with England and other Europeans provided for imports of steel, led,
tin, gold and silver into Turkey.
In the 1800s, the capitulatory system reached Persia (Iran). After
Persia's humiliating military losses to the Russians and English,
Persia was forced to accept concessions as "reparations." Economic
concessions fell into three major categories: public utilities,
financial enterprises, and exploration for and exploitation of natural
resources. I described this capitulatory system in detail in my 2018
book, "World View: Iran's Struggle for Supremacy -- Tehran's Obsession
to Redraw the Map of the Middle East."
After decades of these concessions, where the Russians and English
took advantage of the Iranians, and the Iranian politicians and
clerics were enriched through corruption, there was a backlash. For
example, the tobacco concession granted a monopoly on both the
purchase and sale of tobacco within Persia to an English company for a
period of fifty years, and during this period Iran's rulers received
enormous kickbacks, while Iran's tobacco merchants suffered. Huge
anti-government protests led to the anti-government Tobacco Revolt
(1890-92).
In the political debate of that time, a merchant wrote:
<QUOTE>"By what laws does the government sell our national
rights to foreign racketeers? These rights, according to both the
principles of Islam and traditional laws of Iran, belong to the
people of our country. These rights are the means of our
livelihood. The government, however, barters the Moslem property
to the unbelievers. By what law? Have the people of Iran died
that the government is auctioning away their
inheritance?"<END QUOTE>
Today, the proposed Iran-China draft agreement is receiving sharp
criticism that sounds very similar to the above criticism of the 1890
tobacco concession. Some lawmakers are saying that it feeds China's
'colonialist greed." Former President Mahmood Ahmadinejad warned that
the Iran-China agreement was with "a foreign country" was being
discussed "away from the eyes of the Iranian nation." Reza Pahlavi,
the son of the last Shah of Iran, blasted the "shameful, 25-year
treaty with China that plunders our natural resources and places
foreign soldiers on our soil."
The Tobacco Revolt was a major event in Iranian history, with
implications far beyond the income of tobacco merchants. The tobacco
concession was revoked, but the anti-government protests continued.
In 1905 there were protests over the price of sugar and the sugar
merchants. This led to a massive civil war known as the
Constitutional Revolution, whose purpose was, among other things, to
demand adoption of a constitution that would guarantee that no leader
was above the law, and would control the powers of the Shah, and not
allow him to grant concessions to other countries without the approval
of the Majlis (parliament).
What's obvious here is that today's proposed Iran-China agreement is
stirring up emotions still remaining from the Tobacco Revolt and the
Constitutional Revolution, just as racial issues in America today stir
up emotions remaining from the American Civil War.
People are always asking me about "regime change" -- when will the
Iranian people rise up and finally replace the exceedingly corrupt
religious thugocracy running the country now. As we know from
Generational Dynamics, Iran is in a generational Awakening era, which
is the time in any country when a "velvet revolution" or non-violent
coup is most likely to occur.
So I believe that this agreement has almost no chance of being
implemented. But if Iran's loony leaders continue to push it, it
could be the trigger for the regime change that everyone claims to
want.
John Xenakis is author of: "World View: Iran's Struggle for Supremacy
-- Tehran's Obsession to Redraw the Map of the Middle East"
(Generational Theory Book Series, Book 1), September 2018, Paperback:
153 pages, over 100 source references, $7.00, https://www.amazon.com/World-View-Suprem...732738610/
****
**** Iran's Chabahar Port deal with India is at risk
****
In 2016, India and Iran signed a the "historic" Chabahar Port
agreement. Chabahar is on the coast of Iran near Pakistan. India has
agreed to invest $500 million to significantly increase the size of
this port. Using it, India will be able to bypass Pakistan in
shipping goods to Iran, and from there to Afghanistan, Central Asia or
Europe. When India took operational control of the port in 2018,
India agreed to invest in the 628 km Chabahar-Zahedan railroad linking
the port to the Trans-Iranian railway and to other cities in Iran,
connecting from there to Afghanistan, Central Asia, and Eastern
Europe. ( "18-Feb-18 World View -- Iran gives operational control of its Chabahar seaport to India"
)
On Tuesday, Iran announced that India would no longer be part of
the Chabahar-Zahedan railway project, and that Iran would go it
alone. The reason given is that India has delayed providing
funding for its share of the project, related to the American
sanctions on Iran.
However, it's widely suspected that India was dropped from the project
under pressure from China. Under the new China-Iran draft agreement,
China will assist Iran in "Chabahar’s duty free zone, an oil refinery
nearby, and possibly a larger role in Chabahar port as well,"
according to reports. The upcoming deal will facilitate Chinese
investments in "infrastructure, manufacturing and upgrading energy and
transport facilities, to refurbishing ports, refineries and other
installations." Furthermore, the agreement wi commit Iran to
supplying oil and gas to China for the whole duration.
Using debt trap diplomacy, China has taken over Sri Lanka's Hambantota
port, and is expected soon to take over the Mombasa port in Kenya. In
each of those cases, there is a large enclave of thousands of Chinese
workers living near the ports. Under the new draft agreement, China
is already planning an enclave of 5,000 Chinese workers in Iran, and
may be planning to take over the Chabahar port, when the time is
right.
Sources:
- Defying U.S., China and Iran Near Trade and Military Partnership (NY Times, 11-Jul-2020)
- Explainer: Anger Among Iranians Over Long-Term Deal With China (RFERL, 13-Jul-2020)
- Unlikely Iranian bedfellows foster secret 25-year deal with China (Debka, 14-Jul-2020)
- China-Iran deal envisions massive investments from Beijing (Axios, 14-Jul-2020)
- Iran is negotiating 25-year strategic accord with China, Zarif says (Middle East Eye, 5-Jul-2020)
- Proposed China-Iran deal is bad news for Israel (Jerusalem Post, 14-Jul-2020)
- The China-Iran strategic partnership, and how it can change geopolitics in the Middle East (The Print, India, 14-Jul-2020)
- India shunted out of key Iran railway project, plot set to thicken as China's shadow looms in the background (IndiaTimes, 14-Jul-2020)
- Analysis | China making deep inroads into Iran (The Hindu, 14-Jul-2020)
- Iranian regime betrays its principles with China deal (Arab News, 12-Jul-2020)
Related Articles:
- Iran gives operational control of its Chabahar seaport to India (18-Feb-2018)
- Iran-India sign 'historic' Chabahar port deal to counter Pakistan-China (25-May-2016)
- India's Open Magazine: The West gets constantly surprised by Iran (14-Feb-2019)
- China signs nuclear deals with Saudi Arabia and Iran (23-Jan-2016)
- China 'betrays' Iran, as internal problems in both countries mount (05-Apr-2008)
KEYS: Generational Dynamics, Iran, China, Javad Zarif, Miao Lu,
Belt and Road Initiative, BRI, capitulatory system,
Tobacco Revolt, Constitutional Revolution,
Mahmood Ahmadinejad, Reza Pahlavi,
India, Chabahar Port, Chabahar-Zahedan railway,
Sri Lanka, Hambantota port, Kenya, Mombasa port
Permanent web link to this article
Receive daily World View columns by e-mail
Contribute to Generational Dynamics via PayPal
John J. Xenakis
100 Memorial Drive Apt 8-13A
Cambridge, MA 02142
Phone: 617-864-0010
E-mail: john@GenerationalDynamics.com
Web site: http://www.GenerationalDynamics.com
Forum: http://www.gdxforum.com/forum
Subscribe to World View: http://generationaldynamics.com/subscribe
