Over the past week, news of a long-term strategic pact between China and Iran has caused an uproar among the Iranian public and politicians alike, with both supporters and opponents voicing strong opinions on social media. Iran’s former president, Mahmoud Ahmadinejad, rang alarm bells when he warned of a public backlash totally rejecting the deal should the government fail to consult lawmakers before signing the agreement. In response, government officials were quick to denounce his proclamation as fake news, claiming that there is nothing secretive about the deal. On the contrary, Iran’s government has held the agreement up as a major diplomatic achievement for the country at a time of increasing international isolation.
China and Iran are reported to have quietly drafted a comprehensive military and trade partnership. The deal would make way for about $400 billion worth of Chinese investments into Iran’s key sectors, such as energy and infrastructure, over the next 25 years.
According to US officials, the agreement could also make way for Chinese military bases in Iran, fundamentally changing the region’s geopolitics.
ThePrint looks at the proposed deal, what led to it and its implications for the Middle East.
An 18-page draft of the proposed agreement was accessed and reported by the New York Times (NYT), and it talks about expanding Chinese presence in Iran’s “banking, telecommunications, ports, railways and dozens of other projects”. In return, Iran is to provide regular and “heavily discounted” supply of oil to China for 25 years.
In the strategic realm, the proposed draft talks about deepening military cooperation, with “joint training and exercises”, “joint research and weapons development”, and intelligence sharing.
This deepening military cooperation would be intended to fight the “the lopsided battle with terrorism, drug and human trafficking and cross-border crimes”.
The deal is reported to have been first proposed by Chinese President Xi Jinping during his 2016 visit to Tehran, and the proposed draft was approved by Iranian President Hassan Rouhani and Foreign Minister Mohammad Javad Zarif over the last couple of weeks.
The opening sentence of the proposed draft says: “Two ancient Asian cultures, two partners in the sectors of trade, economy, politics, culture and security with a similar outlook and many mutual bilateral and multilateral interests will consider one another strategic partners.”
There are nearly 100 projects cited in the document that would have Chinese investments, and are expected to be a part of Xi’s ambitious Belt and Road Initiative (BRI), which aims to extend China’s strategic influence across Eurasia.
These 100 projects include “airports, high-speed railways and subways”, effectively touching the lives of most Iranian citizens.
“China would (also) develop free-trade zones in Maku, in northwestern Iran; in Abadan, where the Shatt al-Arab river flows into the Persian Gulf, and on the gulf island Qeshm,” notes the NYT report.
The draft agreement also talks about China building infrastructure for 5G telecommunications network in Iran. This would see Chinese telecommunications giant Huawei — a company that has come under severe US sanctions and been banned by many countries across the world such as the United Kingdom and Australia — enter the Iranian market.
Chinese global positioning system BeiDou is also proposed to assist Iran’s cyber authorities in regulating what is shared in the country’s cyberspace, potentially paving the way for Iran to develop a China-like “great firewall”.
Isolation of Iran by the western countries, especially the US, has forced the Iranians to forge a new alliance of sorts with the Chinese who have economic might and are increasingly looking to expand their influence in the region forging a win-win alliance of sorts for the two countries. US withdrawal from the region has created an opportunity for its rivals Russia & China to make inroads in the region. Of the two major powers, China with its economic capacity has an upper hand. China has significantly increased its economic, political, and – to a lesser extent – security footprint in the Middle East in the past decade, becoming the biggest trade partner and external investor for many countries in the region. 
Chinese have made significant investments in Israel, Saudi Arabia and other countries and is now getting increasingly involved politically to secure its investments, the biggest example of this has to be Chinese involvement in Afghanistan post US forces withdrawal and subsequent deal with the Taliban, Beijing has been actively enhancing its contacts and possibly building robust relations with the Afghan government in Kabul and the Taliban, which are going to have an impact on the relations between its longstanding ally Pakistan and Afghanistan. China is underpinning its diplomacy with the prospects of greater trade and investment in the impoverished country. Deal with Iran is going to further give impetus to this arrangement as all the concerned countries share the boundaries. 
Having a foothold through its investments in Iran will provide a strategic advantage to the Chinese that may ultimately diminish the importance of Gwadar, the much-hyped port of the CPEC project in Pakistan but is currently running in heavy losses and faces threats due to Baloch insurgency in the Baluchistan region of Pakistan where it’s situated. 
Access to a port in the Persian Gulf will be of huge strategic importance for the Chinese as after building a strategic post in Djibouti having a post in Strait of Hormuz will be much significant and they could practically keep an eye on US base in Manama. Chinese have been building a series of ports in strategically important locations across the Indian Ocean Region (IOR). China has also stepped up military cooperation with Iran. The People’s Liberation Army Navy has visited and participated in military exercises at least three times, beginning in 2014. The question would be would Iran be providing access to a new location or will it give access to the Chinese in the Chabahar port region. In case it’s Chabahar, it does not bode well for India, as it will clearly hamstring their regional ambitions as well as access to Afghanistan, India has been using the port to circumvent Pakistan and establish a secure trade route.