TEHERAN/BEIJING (NYTIMES) - Iran and China have quietly drafted a sweeping economic and security partnership that would clear the way for billions of dollars of Chinese investments in energy and other sectors, undercutting the Trump administration's efforts to isolate the Iranian government because of its nuclear and military ambitions.

The partnership, detailed in an 18-page proposed agreement obtained by The New York Times, would vastly expand Chinese presence in banking, telecommunications, ports, railways and dozens of other projects.

In exchange, China would receive a regular - and, according to an Iranian official and an oil trader, heavily discounted - supply of Iranian oil over the next 25 years.

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".

The partnership - first proposed by China's leader Xi Jinping during a visit to Iran in 2016 - was approved by President Hassan Rouhani's Cabinet in June, Iran's foreign minister Mohammad Javad Zarif, said last week.

Iranian officials have publicly stated that there is a pending agreement with China, and one Iranian official, as well as several people who have discussed it with the Iranian government, confirmed that it is the document obtained by The Times, which is labelled "final version" and dated June 2020.

It has not yet been submitted to Iran's parliament for approval or made public, stoking suspicions in Iran about how much the government is preparing to give away to China.

In Beijing, officials have not disclosed the terms of the agreement, and it is not clear whether Mr Xi's government has signed off or, if it has, when it might announce it.

If put into effect as detailed, the partnership would create new and potentially dangerous flashpoints in the deteriorating relationship between China and the US.

It represents a major blow to the Trump administration's aggressive policy toward Iran since abandoning the nuclear deal reached in 2015 by then President Barack Obama and the leaders of six other nations after two years of gruelling negotiations.

Renewed US sanctions, including the threat to cut off access to the international banking system for any company that does business in Iran, have succeeded in suffocating the Iranian economy by scaring away badly needed foreign trade and investment.

But Teheran's desperation has pushed it into the arms of China, which has the technology and appetite for oil that Iran needs. Iran has been one of the world's largest oil producers, but its exports, Teheran's largest source of revenue, have plunged since the Trump administration began imposing sanctions in 2018; China gets about 75 per cent of its oil from abroad and is the world's largest importer, at more than 10 million barrels a day last year.

At a time when the US is reeling from recession and the coronavirus, and increasingly isolated internationally, Beijing senses American weakness.

The draft agreement with Iran shows that unlike most countries, China feels it is in a position to defy the US, powerful enough to withstand American penalties, as it has in the trade war waged by President Donald Trump.

"Two ancient Asian cultures, two partners in the sectors of trade, economy, politics, culture and security with a similar outlook and many mutual bilateral and multilateral interests will consider one another strategic partners," the document says in its opening sentence.

The Chinese investments in Iran, which two people who have been briefed on the deal said would total US$400 billion (S$556 billion) over 25 years, could trigger still more punitive actions against Chinese companies, which have already been targeted by the administration in recent months.

"The United States will continue to impose costs on Chinese companies that aid Iran, the world's largest state sponsor of terrorism," a State Department spokesman wrote in response to questions about the draft agreement.

"By allowing or encouraging Chinese companies to conduct sanctionable activities with the Iranian regime, the Chinese government is undermining its own stated goal of promoting stability and peace."

The expansion of military assistance, training and intelligence-sharing will also be viewed with alarm in Washington. US warships already tangle regularly with Iranian forces in the crowded waters of the Persian Gulf and challenge China's internationally disputed claim to much of the South China Sea, and the Pentagon's national security strategy has declared China an adversary.

Moving ahead with a broad investment programme in Iran 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 US use of unilateral sanctions.

Iran has traditionally looked west towards Europe for trade and investment partners. Increasingly though, it has grown frustrated with European countries that have opposed Mr Trump's policy but have quietly withdrawn from the kinds of deals that the nuclear agreement once promised.

"Iran and China both view this deal as a strategic partnership in not just expanding their own interests but confronting the US," said Mr Ali Gholizadeh, an Iranian energy researcher at the University of Science and Technology of China in Beijing. "It is the first of its kind for Iran keen on having a world power as an ally."

The proposed partnership has nonetheless stoked a fierce debate within Iran. Mr Zarif, the foreign minister, who travelled to Beijing last October to negotiate the agreement, faced hostile questioning about it in parliament last week.

The document was provided to The Times by someone familiar with its drafting with the intention of showing the scope of the projects under consideration.

Mr Zarif said the agreement would be submitted to parliament for final approval. It has the support of Iran's supreme leader Ayatollah Ali Khamenei, two Iranian officials said.

But critics across the political spectrum in Iran have raised concerns that the government is secretly "selling off" the country to China in a moment of economic weakness and international isolation. In a speech in late June, a former president, Mr Mahmoud Ahmadinejad, called it a suspicious secret deal that the people of Iran would never approve.

The critics have cited previous Chinese investment projects that have left countries in Africa and Asia indebted and ultimately beholden to the authorities in Beijing. A particular concern has been the proposed port facilities in Iran, including two along the coast of the Sea of Oman.

One at Jask, just outside of the Strait of Hormuz, the entrance to the Persian Gulf, would give the Chinese a strategic vantage point on the waters through which much of the world's oil transits. The passage is of critical strategic importance to the US, whose Navy's 5th Fleet is headquartered in Bahrain, in the Gulf.