Iranian-Chinese economic relations have grown steadily closer over the past four decades, with Beijing emerging as one of Tehran’s leading trade partners in recent years. Their economic relationship entered a new phase in the 1980s, when China started providing Iran with arms and technology during the Iran-Iraq War. But since then, trade extended to various other key economic sectors, consisting mainly of heavy machinery, electronics, consumer goods, and energy resources. Today, China is one of Iran’s most important destination markets and a leading source of imports: Chinese customs data shows that the trade volume with Iran in 2022 reached $15.795 billion, $1.035 billion higher than the figure recorded in 2021. China’s exports to Iran in this period grew by 14%, reaching $9.44 billion, as opposed to $8.258 billion in 2021. Although, in contrast, the value of Iran’s non-oil exports to China decreased by 2% in 2022, amounting to $6.355 billion, compared to $6.502 billion in 2021.

Bloomberg reports that despite U.S. sanctions, Iranian oil exports have significantly increased in recent years, to around 1 million barrels of oil per day and exceeded 1.5 million barrels in May, with a sizable percentage of this production going to China. The growth in Chinese demand comes down to a number of factors, including the Iranian oil’s favorable price, political considerations of building strategic global alliances in opposition to the U.S., and China’s critical need to safeguard its energy supplies. Beijing’s role as a vital consumer has facilitated a comeback for Iranian petroleum on the international market.

Yet despite this clear growth in trade, especially when it comes to Chinese exports to Iran and purchases of Iranian oil, the same cannot be said for China’s investments in the Iranian economy, which have remained anemic, particularly in the critical energy sector. This has raised related questions about the nature of the broader Chinese-Iranian relationship and whether or not it can truly be considered “strategic.” 

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Read the full article on the Middle East Institute website.