Iran, China to Cement Cooperation
News number: 870507110215:56 | 2008-07-28Economy
http://english.farsnews.com/newstext.php?nn=8705071102

TEHRAN (FNA)- The attachments of the contract between Iran's Pars Oil and
Gas Company and China's CNOOC (China National Offshore Oil Corp.) to exploit
the North Pars gas field were finalized, Pars Oil and Gas Company's managing
director said.

"Along with our negotiations with SINOC Group, we are also negotiating with
some other domestic and foreign groups about the North Pars gas field
project," Ali Vakili explained according to MNA.

Iranian and Chinese companies hope to start to sell the gas from the North
Pars gas field in Asian and European markets soon.

Actually, China's rapid economic growth is proceeding in tandem with its
growing energy needs, which are placing enormous pressure on world energy
prices and fuelling a fierce global competition for energy resources.

China imports half of its oil from the Middle East and is interested in
promoting political stability in the region. Beijing rejects Washington's
policies that exacerbate insecurity.

At the end of 2004, China became Iran's top oil export market. Iran exports
about 300,000 barrels of oil to China, which makes it Beijing's
third-largest oil supplier, behind only Angola and Saudi Arabia, a press tv
commentary said.

China's oil giant Sinopec Group has signed a big gas deal worth 100 billion
dollars with Iran. Known as the "deal of century" by energy experts, Sinopec
is going to buy 250 million tons of natural gas in 30 years from Iran, and
will help Iran to develop its giant Yadavaran oilfield in exchange for
Tehran's commitment of exporting 150,000 oil barrels per day to China for 25
years at market prices.

China's economic initiatives in Iran go far beyond the energy field and
include a wide spectrum of areas, ranging from infrastructure construction
to trade and tourism. Beijing is helping Tehran to build dams, shipyards and
many other projects. More than 100 Chinese state companies are operating in
Iran to develop ports and airports in the major Iranian cities,
mine-development projects and oil and gas infrastructures.

Moreover, Beijing wants to increase the presence of its companies in the
Iranian market, which may be a good outlet for Chinese products. Trade
between the two nations is expected to hit a new record of 11 billion
dollars in 2008, compared with 9.5 billion in 2007.

Moreover, Beijing wants to reinforce its relationship with Tehran in order
to deepen its presence in Central Asia with the goal of reaching the
important energy resources of the Caspian Sea region.

This would help China lessen its dependence on maritime oil imports from the
Arab countries of the Persian Gulf, thus better securing an uninterrupted
flow of oil.

Therefore, Chinese and other Asian companies are increasing their investment
in Iran, a country that is a natural bridge between the Middle East and
Central and South Asia. As some European countries have decreased their
economic trade with Tehran in response to US pressure, China and other Asian
countries have stepped in to fill the void. China has already overtaken
Germany as Iran's second largest trading partner (the first being the UAE).

As the American journalist, Warren Strobel, wrote for McClatchy, "When
Western companies and banks move out of Iran, Chinese or other Asian firms
simply move in and take the business."

Strobel believes sanctions against Iran have produced a self-defeating
outcome for Western countries that will have negative far-reaching political
and economic consequences for them.

China and other Asian nations have long taken measures to counter US
hegemonic controls. A major tool is the Asian Energy Security Grid. This is
being pursued by China and Russia as an alternative to US-led Western
control of the world's energy resources.

Iran is an integral partner to the group, where Russia and China cooperate
to counter US threats to their sovereignty. Iran has also joined the
Shanghai Cooperation Organization (SCO) as an observer. This organization is
largely a Sino-Russian tool seeking to contain the US presence in Central
Asia.

Moreover, China, Iran and Russia maintain identical foreign policy positions
regarding Taiwan and Chechnya. Moscow and Tehran support Beijing's one-China
policy.

The recent promulgation by the Chinese Assembly of an anti-secession law,
aimed at making China's rejection of Taiwan's independence explicit, was
heartily praised in both Moscow and Tehran.

China knows that Iran is emerging as a new regional power and is playing a
leading role in the Middle East's diplomatic balance. Tehran's capabilities
in influencing the regional dynamics are much stronger than before. Iran has
played a key role in stabilizing Iraq and Lebanon.

Iranian President Mahmoud Ahmadinejad was invited to the last summit of the
Persian Gulf Cooperation Council (PGCC) held in Doha. The PGCC, a key
instrument of US regional strategy for three decades, had never before
invited Iran to its meetings.

Furthermore, in a period in which energy markets highlight the increasing
dependence of industrial powers on oil prices, Iran has an important
instrument of geopolitical pressure thanks to its status as a major oil
producer and its control of the Strait of Hormuz.

China supports Iran's right to the peaceful use of nuclear energy and has
called on all negotiating sides to show flexibility in order to reach a
deal.

Like Russia, the Chinese oppose any move that would lead to an escalation in
tensions and have pointed out that sanctions will not help reach an
agreement.

"We believe that sanctions, especially unilateral sanctions, are of no
help." Chinese Foreign Ministry spokesman Liu Jianchao has said.

With a permanent seat on the UN Security Council, China holds the power to
pass or veto possible new sanctions on Iran.

Some Chinese companies have been sanctioned by the US for selling Iran
dual-use chemicals that can have military use. Meanwhile, the US continues
to export military systems worth billions of dollars to Israel and is
currently the main exporter of weapons to the Middle East.

Beijing has condemned this US move and has rejected American attempts to
interfere in its relations with Tehran. Although Beijing and Washington are
not currently engaged in an open confrontation in the region, China's
increased presence in the region's energy certainly has the potential to
create Sino-US rivalry in the future. In the US, there is considerable
concern over a possible US-China collision over energy.

In December, 2005 Joseph Lieberman, a hardline senator who is known by his
pro-war statements, raised the specter of military conflict between the two
nations. "We are heading toward two-thirds reliance of each country on
foreign oil. Let's recognize this problem before it becomes an intense
competition which can actually lead to military conflict."

Jon Alterman of the Washington-based Center for Strategic and International
Studies, who has co-authored a new study on China's interests in the region
entitled "The Vital Triangle: China, the United States, and the Middle East"
thinks that "the tendency in the US is to see China as a threat or counter
to US interests.

The Chinese lose sleep at night thinking that their energy dependence relies
on the Middle East". Most experts point out that the clear erosion of
American influence in the region means that the US is no longer able to set
the agenda, or control events as it once did, which is a positive fact.

There is no doubt here that the cooperation between Iran and China will be
fundamental in order to counter Washington's unilateralism and global
hegemonic intentions.