Right before the United States and Iran were going to hold indirect talks on April 6, the Chinese and Iranian foreign ministers signed a 25-year Comprehensive Strategic Cooperation Agreement (CSCA) in Tehran on March 27; as part of the agreement, China will provide Iran access to its BeiDou Navigation Satellite System (BDS) to enhance Iran’s combat capabilities.
This could be very concerning to the United States, according to China expert Gu Feng.
The CSCA includes three main aspects, namely, the Chinese Communist Party (CCP) will invest $400 billion in Iran for energy and infrastructure construction; oil and trade transactions between China and Iran will be settled in the Chinese yuan; Iran will install the CCP’s BDS for its missiles. Among the three items, the direct settlement in yuan and the BDS have caused the most concerns.
Settlement in Yuan Bypasses US Sanctions on Iran
Under U.S. sanctions against Iran, countries are prohibited from conducting oil transactions with Iran, and if the U.S. dollar is used in such transactions, the relevant banks will be subject to U.S. secondary sanctions. All financial ties with the United States will be severed, and all business and assets will be frozen.
In addition, the United States will pressure the Society for Worldwide Interbank Financial Telecommunication (SWIFT) to cut its telecommunication ties with Iran.
However, if the yuan is used to settle oil trade between the CCP and Iran, the CCP will enable Iran to get around the restrictions of using U.S. dollars, thus largely circumventing the U.S. sanctions.
Currently, South Korea is still holding $7 billion of Iranian oil money under U.S. sanctions over its nuclear program. This has put great pressure on Iran’s economy, to the point that Iran is even unable to buy the CCP virus vaccine.
From the CCPs perspective, China is the world’s largest importer of crude oil. If oil purchases must be settled in U.S. dollars, the CCP must pay huge fees in order to convert yuan into U.S. dollars.
According to statistics, China’s daily settlement volume through SWIFT is between $200 billion and $300 billion, and the handling fee alone costs the CCP $7.3 billion to $10.9 billion per year. Therefore, using yuan for settlement saves the CCP a lot of fees.
BDS Will Enhance Iran’s Combat Power and Become a Nightmare for the World
From the military point of view, an advanced navigation system is a starting point to ensure missiles hit their target accurately. It is believed that although Iran lacks an effective navigation system, it has never dared to use the U.S. or the EU navigation systems because the signal may be cut off in the event of a Western-led military conflict.
However, installation of the BDS on Iranian missiles will improve the targeting accuracy to a certain extent, and pose a threat to the U.S. aircraft carrier fleet in the Persian Gulf.
BDS is one of the four core providers of global satellite navigation systems recognized by the International Committee on Global Navigation Satellite Systems (ICG), established in 2005 under the umbrella of the United Nations. The other three suppliers are the U.S. Global Positioning System (GPS), the Russian Global Navigation System (GLONASS), and the European Union’s Global Satellite Navigation System Galileo.
Gu, a Chinese current affairs commentator, said that BDS could become a nightmare for the world.
He said that the BDS is developed with the purpose of getting rid of U.S. GPS military restrictions. The CCP took 26 years to build it, invested more than $12 billion, and launched 55 satellites to get BDS into operation.
The CCP is now actively promoting BDS via its “One Belt, One Road” initiative. Among the 137 signatory countries, more than 100 have the most frequent use of BDS, most of them in Southeast Asia and Africa.
More than 30 countries in the Middle East, Africa, and other regions also use BDS.
Gu said that BDS is a huge and complex aerospace project, and has 31 more satellites than the U.S. GPS system. The operation of its space and earth network involves the coordinated scheduling and monitoring management of dozens of systems and tens of thousands of pieces of equipment.
Through BDS, the CCP will be able to put in place a vast system that can monitor the entire globe.
Gu said, once Iran introduces BDS, the power of its missile force will multiply.
After Iran has BDS, the nightmare of the United States will begin, said Gu. With increased navigation accuracy, Iran can use ballistic missiles to strike U.S. aircraft carriers, and the situation in the Middle East is likely to change.
Iran has developed and equipped a number of ballistic missiles. As recently as January this year, it tested missiles of various ranges. The missiles are capable of carrying a 650 kg (1,400 pound) warhead and have a range of approximately 2,000 km (1,200 miles).
With a range of 1,200 miles, the missiles can hit most countries in the Middle East, as well as the U.S. military bases in Iraq, Saudi Arabia, and other places.
North Korea Received BDS Training From the CCP
South Korean media Donga.com reported back in 2014 that 19 experts from eight Asia-Pacific countries, including North Korea, had received training in China on the technology and applications of BDS.
The report said North Korea had learned satellite navigation technology in China and was likely to use it exclusively for military purposes, which was a further cause for concern in South Korea.
The report said, in the first half of 2014, North Korean drones used the most basic GPS technology when they took pictures of Cheong Wa Dae, the official residence of the President of South Korea, and Baengnyeong Island in South Korea.
Gu said North Korea is likely to use the satellite navigation technology it learned from the CCP for military purposes. This would be a nightmare for the world if the technology is used in long-range missiles or drones.
Changes in US Policy Toward Iran
In July 2015, the five permanent members of the United Nations, including the United States and China, signed the Joint Comprehensive Plan of Action (also known as the Iran nuclear deal or Iran deal).
In May 2018, former U.S. President Trump withdrew from the deal after announcing that it was “defective at its core.”
Trump said, “If we do nothing, we know exactly what will happen. In just a short period of time, the world’s leading state sponsor of terror will be on the cusp of acquiring the world’s most dangerous weapon.”
The Trump administration then imposed more than 1,600 sanctions on Iran, including an oil embargo and comprehensive economic sanctions.
On April 6, the new U.S. administration and Iran held indirect talks through European representatives in a “shuttle diplomacy” on the U.S. return to the Iran nuclear deal.
Although the United States, Iran, and Europe all called the talks “constructive,” the U.S. side said it did not expect an immediate breakthrough.
The Iranian side, on the other hand, has taken a hard-line stance in the talks.
U.S.-based current affairs commentator Li Yanming said to The Epoch Times that the CCP could have played a role in Iran’s tough stance.
He said the 25-year CSCA between the CCP and Iran is a major blow to the Biden administration.
“The public alliance between the CCP and Iran is a sign that the CCP will further contain U.S. military deployments in the Middle East through Iran, distracting U.S. control over the Indo-Pacific region and paving the way for its military expansion in the Taiwan Strait, the South China Sea, and the world,” Li said.
Views expressed in this article are the opinions of the author and do not necessarily reflect the views of The Epoch Times.