TEHRAN (Iran News) – There Is No Cheap Oil. Media attack and hype regarding Iran and China’s economic cooperation agreement by the domestic and foreign currents, and especially by those who western blood is boiling in their veins and have engaged a country with their imported delusion in their minds despite all rational reasons, assigns one to stand against these mischievous distortions which are seen among the news reports by disclosing the truth in order to make aware the dear and resistant people of this revolutionary country against these mischievous inductions. The first induction of doubt regarding this cooperation agreement of the Chinese investment and cooperation with Iranian companies, while it has only been signed in size of an 18-page outline MoU, is being tied to the oil sale which is totally wrong and skeptical. The issues of investment and oil sale are two totally different issues and they are apart.
China today needs to buy oil around 800,000 barrels per day and it does it based on the short term contracts and its payment is through different means. But when it comes to the investment, the issue becomes totally different. The truth is that today in the world there is tough competition over attracting more foreign investment and those countries are more successful that they prepare the domestic grounds for attracting more foreign investment.
Nearly one of the main factors in all countries, that they have improved their economies and industries to reach the industrialist countries in recent decades, has been the success in attracting foreign investment; from China and South Korea to Malaysia and Turkey and even in the Persian Gulf states. The U.S. and European governments have a large number of laws and regulations for easing the attraction of foreign investment. The interesting part is that all efforts of President Hassan Rouhani’s government, which created void and chimerical noise on the JCPOA document, were to pave the grounds for foreign investment from Western countries through anti-security and anti-Islamic threats; more interesting is that the most important goal of the U.S. for imposing economic sanctions against Iran was to hinder foreign investment in the Islamic Republic of Iran.
In this condition it is very strange that some people in the country in tune with enemies of the Islamic establishment interpret foreign investment as selling the country. In the issue of China’s investment there is essentially no issue under the title of oil trade wherein the issue of cheap oil has been raised.
China’s eager for investment abroad is not confined only to the Islamic Republic of Iran. The People’s Republic of China, according to the data published by the American Enterprise Institute, has invested over 2.1 trillions of dollars in different countries worldwide only in the past 15 years; from rich countries like Switzerland and the U.S. to the African countries like Congo. According to the data released by the Center for Strategic and International Studies (CSIS), in only 6 years (2013 to 2019, China has invested $62b in the railways sector in 34 countries.
The active economic presence of China has not meant expanding its political influence in those countries but the nature of these investments will be a haven for economic security. China’s investments in Africa has led to huge number of analysis in the media that even experts believe with these investments, the fourth industrial revolution would happen in Africa, and this is said while there are no enough infrastructures for materializing this development. For preparing infrastructure developmental plans for Africa, China and India have turned into macro policies in changing the structures of the agro, industrial and educational services.
The American business magazine Forbes in its different analysis says China is the biggest partner of Africa and its annual trade volume with Africa stands at $200b. Accordingly, over 100,000 Chinese companies are active in Africa. The most exports from Africa to China in 2019 were from Angola, South Africa and Republic of Congo. Africa accounts for 20 percent of China’s need of cotton. Africa possesses half of the world magnesium reserves which is used in the steel industry and Democratic Republic of the Congo by itself possesses half of this amount of magnesium reserves. China needs all of these resources.
The details of Iran-China 25-year document has not been yet revealed. American newspaper The New York Times in an article had claimed that China’s president had offered the proposal for the agreement some five years ago (2016). The draft of this agreement was signed on June 24, 2020 in Beijing. It is said the Chinese are to take $600b of their overseas forex reserves into Iran in the span of 25 years and they are to have the same amount of investment in Iran in cooperation with companies and organizations both in private or public sectors.
The required guarantee for taking capital gains could have been the sale of oil. Now if they want they can take their capital gains in cash otherwise they can buy oil instead of their cash or else, they will be free to invest their profits in expanding their investment in those sectors.
That Iran enjoys having ready infrastructure, independent land, skilful and educated workforce as a valuable guarantee as its oil, has sweetened investment for the Chinese. So inducing the idea of oil for investment of the type of selling cheap oil is a big lie which is used to ruin the agreement and to put the pressure on the public opinion.