The national flags of China and Iran fly in Tiananmen Square during Iranian President Ebrahim Raisi's visit to Beijing, China, February 14, 2023

Concerns Grow In Iran As Data Shows It's China's 38th Trade Partner

Friday, 03/01/2024

The recent revelation that Iran ranks as China’s 38th trading partner has once again cast doubt on the efficacy and depth of the much-touted economic ties between the two countries.

While the Iranian regime heavily relies on Beijing as its primary oil customer, the actual data on bilateral economic relations appears less promising for the sanctions-stricken country.

China's foreign trade statistics for 2023 reveal that Beijing's largest trade volume is with the European Union, reaching $783 billion last year. Following the EU are major economies such as the US ($664 billion), Japan ($318 billion), South Korea, and others.

This overall picture will most probably not appeal to the Iranian regime sympathizers who have frequently lauded Tehran-Beijing ties as a sign of Iran’s foreign policy success; they have to be very patient to get to Iran’s name on the list.

Iran's placement as China's 38th trading partner, with trade volume not exceeding $32 billion, falls significantly behind several neighboring and regional rivals. Saudi Arabia, for instance, boasts a trade volume with China of $107 billion, followed by the UAE, Iraq, Turkey, and Oman.

Next in the region are the UAE ($95 billion), Iraq ($50 billion), Turkey ($43 billion) and Oman ($35 billion). Qatar, Kuwait, Pakistan and Egypt are the only regional countries whose volume of trade with China is less than Iran’s.

Iran Economist news website covered China’s foreign trade data in 2023 and Iran’s meager share in it, ironically calling it “the new achievement” of the Iranian government.

Iranian President Ebrahim Raisi stands next to Chinese President Xi Jinping during a welcoming ceremony in Beijing, China, February 14, 2023.

Faraz Daily, an online newspaper, warned that decline in trade with China is just a symptom which reflects a much enormous problem: Iran’s decline share of the world trade. According to the newspaper, Iran’s share of world trade has alarmingly decreased to %0.24 in 2022.

Esfandyar Batmanghelidj, economist and the founder of the Bourse & Bazaar Foundation, a think-tank focusing on economic diplomacy in the Middle East and Central Asia, remarked on X that “Chinese exports to Iran have fallen significantly since their 2014 peak” while Beijing’s trade with Moscow has grown.

Many observers contend that China has over the past years considered Iran as an instrument through which it can boost its leverage in the region. According to Amin Saikal, emeritus professor of Middle Eastern, Central Asian and Islamic Studies at the Australian National University, “in befriending Iran and Afghan theocracies, China has positioned itself to be able to extend its influence across West Asia, given Tehran’s formidable proxy presence in Iraq, Syria and Lebanon.”

Despite this, Iranian officials have made numerous concessions to China, including granting contracts for infrastructure projects in Tehran, a move criticized by Ahmad Khorram, former Roads and Transportation Minister, as detrimental to local expertise.

Earlier this month, Tehran’s municipality announced that China will soon start building housing units in the capital. Mayor Alireza Zakani said several contracts have been signed with Chinese companies to revamp the capital’s infrastructure, including construction and transportation projects, at the expense of local businesses amidst a crippling economic crisis.

Rejecting the deal as an insult to the local expertise, Ahmad Khorram, former Roads and Transportation Minister, warned that “we have given China privileges that are unprecedented in our country.” According to the former minister, Tehran provides Beijing with all these privileges to guarantee its support in the UN Security Council.

Both China and Russia have collaborated with the US over banning Iran’s nuclear program and were the first countries to back the Security Council’s resolutions against Iran, he stressed.

More News