China One Step Ahead in Economy

These days fever of news on Iran-China 25-Year Strategic Agreement has gripped the local and world media outlets and its supporters and opponents have written articles and expressed their opinions on it.

IRAN NEWS POLITICAL DESK

Earlier in my articles, I had mentioned that the U.S.-China trade relation is getting colder any moment and some have interpreted this chill in ties as trade war and even some others have gone further and have interpreted it as a military war and this has led to several analyses on China’s debts from the U.S.

Some believe that Donald Trump’s propaganda is a ground for freezing China’s accounts in American banks and Washington has plans for China’s assets which are estimated at over $3 trillion, and some, by considering this approach, believe China has no way but to withdraw its assets from the U.S. gradually.

In the past, director of the State Administration of Foreign Exchange (SAFE) had announced that China does not need these reserves and there is no serious need to new investment due to sustainable development but nowadays some news has been circulated in the media that China has taken a bold action in its economy and it is going to minimize its dependence on the U.S. dollar. This unexpected and sudden decision that China will not use the U.S. dollar in its mercantile exchange and instead it will use its national currency yuan as the base for trade was something more than a simple shock which shook the markets.

The result of this historic decision means that the U.S. dollar is unusable in China trade and most probably the U.S. dollar in the short time will strongly fall against China’s yuan because demand for yuan for purchasing Chinese goods will rise. Undoubtedly, this decision is going to have its impact on the global markets.

The range of effect of this decision made BBC World in its program discuss the issue and analyze its probable effects on the world economy. According to what political and economic analysts have said this is an economic war which can lead the world to a destructive war of the World War II type, and if the U.S. acts stupidly against China’s decision, one cannot forsake it. Amid the media analyses it was predicted that China with huge amount of gross domestic product (GDP), which is even more than the U.S., will take the lead of the world economy but it has not been predicted when this leadership is to happen. It seems the Chinese have laid the ground for revealing its measures for challenge with the U.S.

Recently some part of Iran’s accord with China for a 25-year cooperation whose drafting is in the works has been covered and highlighted by the American media. The American newspaper New York Times in an article “Defying U.S., China and Iran Near Trade and Military Partnership” described Iran-China 25-Year Agreement as an act to undercut the Trump administration’s anti-Iran efforts and it has tried to provoke Washington against the agreement.

The newspaper in some part of its article says, “The comprehensive Iran-China cooperation document appears to signal Beijing’s growing impatience with the Trump administration after its abandonment of the nuclear agreement. China has repeatedly called on the administration to preserve the deal, which it was a party to, and has sharply denounced the American use of unilateral sanctions.”

The daily continues, “The document also describes deepening military cooperation, potentially giving China a foothold in a region that has been a strategic preoccupation of the United States for decades. It calls for joint training and exercises, joint research and weapons development and intelligence sharing — all to fight “the lopsided battle with terrorism, drug and human trafficking and cross-border crimes.”

Expansion of Iran’s relation with any country in any part of the world irritates the Americans who consider the world as their kingdom of their power and hegemony and due to this approach, their sensitivity towards China’s relation with Iran is much more because the world public opinion considers this relation at its any level as a confrontation with the U.S.

For example, Ali Gholizadeh, an Iranian energy researcher at the University of Science and Technology of China in Beijing, says, “Iran and China both view this deal as a strategic partnership in not just expanding their own interests but confronting the U.S.”

Most analysts in the world’s important and influential media believe that raising the issue of the 25-year agreement has even endangered totally the foundation of the U.S. sanctions. So China’s decision to ditch dollar in its stock trade will increase the U.S. anger and it will be a strategic beginning for China to lead the global economy.

 By: Hamid Reza Naghashian