Iran-China Trade Up, But Trends Are With Beijing As Raisi Looks To Xi For Fast Tracking 25 Year Cooperation Investment Agreement

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By Chris Devonshire-Ellis

Iran’s non-oil trade turnover with China amounted to US$25.3 billion, during the first 10 months of the current Iranian year (March 21, 2022 through to January 20, 2023), according to Rouhollah Latifi, a member of the Iranian international and foreign trade committee. That equates to the Iran-China non-oil monthly trade sector value at US$2.53 billion. It also means that China ranks first in Iran’s non-oil trade.

Iran Exports To China

Latifi stated that Iran exported non-oil products worth US$12.8 billion to China over the period, an increase of 10% compared to the same period in the last Iranian fiscal year. These included mining minerals, petroleum products, construction materials, bitumen, steel products, and similar related items to China during this time.

China Exports To Iran

Iran’s imports from China amounted to US$12.7 over the same period, an almost perfect balance of trade. However, the Chinese exports to Iran are increasing at a faster rate – up 33%.  Iran mainly imported industrial oils, pharmaceuticals, equipment, electronics, steel products, car spare parts, and related products from China.

Iran Global Trade

In terms of global non-oil trade, Iran exported more than 103 million tons of non-oil products worth US$45.3 billion within the first 10 months of the current Iranian year. This represents an increase of 2.9% in value and 17% in volume compared to the previous Iranian year.

Meanwhile, Iran imported 31 million tons of goods worth US$48.5 billion within the first 10 months of the current Iranian year, an increase of 16.8% in value, but a decrease of 6% in volume.

China-Iran 25 Year Cooperation Agreement

These figures are pertinent right now as the Iranian President, Ebrahim Raisi is visiting Beijing and holding trade and investment meetings with Chinese President Xi Jinping and other senior officials from Tuesday (February 14). Iran is said to be dissatisfied with the immediate results of the much-lauded China-Iran 25 year Cooperation Agreement signed off in mid-2021.  China has agreed to inject US$300-US$400 billion by foreign direct investment into the Iranian oil, gas and petrochemical industries, yet progress has been slow.

In fact, Chinese SOEs will have been keen to get involved with developing some of the INSTC corridor infrastructure, of which Iran is an integral part. But the threat of secondary sanctions, payment problems, and civil unrest have all taken a toll. Raisi may well prefer to deal with the sanctions and SWIFT issues by bartering oil – Iran holds some of the world’s largest deposits of proven oil and natural gas reserves, ranking as the world’s third-largest oil and second-largest natural gas reserve holder as of 2021. Iran currently accounts for 24% of oil reserves in the Middle East and 12% in the world. China will be looking for discounts it can also use to obtain further price reductions from Moscow.

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