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News > Iran

The China-Iran Deal to Undermine US Geopolitics and Sanctions

  • People wearing face mask walk beside Chitgar lake in Tehran, Iran, July 5, 2020.

    People wearing face mask walk beside Chitgar lake in Tehran, Iran, July 5, 2020. | Photo: Xinhua

Published 15 July 2020

Their partnership will encourage the use of digital currencies and further weaken the U.S. dollar.

China and Iran are negotiating an agreement that will allow the Persian nation to benefit from oil trade, defense and intelligence collaboration, and Chinese investments in telecommunications, airports, railways, subways, free trade zones, and ports.


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Although the agreement has not yet been formally sealed, it is expected to become a serious blow to the sanctions policy that the United States has imposed on both nations.

According to information revealed by the New York Times this week, the deal involves Chinese investments of about US$400 billion over the next 25 years.

"Both sides have clear incentives here. China secures a cheap supply of oil and deepens its strategic ties in the Middle East, while Iran... gains economic benefits and a large signal showing it is not as isolated as the U.S. claims," outlet El Economista commented.

The Iran-China Agreement makes up an additional step in consolidating the "Belt and Road Initiative", which seeks to build multimodal infrastructures aimed at facilitating trade between Asia and Europe.

The increase in economic ties between these regions will most likely also be accompanied by a greater diffusion of payment methods controlled by China.

“The partnership would also be a prime opportunity for Beijing to push the digital yuan or a digital yuan-compatible currency framework, weakening the U.S. dollar’s sanction power,” outlet the Spectator analyzed.

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